As POS systems have advanced, you may feel overwhelmed by all of the bells and whistles they offer. But, ultimately, today’s models are making life much easier for the operator—streamlining online (and even old-fashioned call-in) ordering, simplifying loyalty programs and menu management, promising top-notch security for customer information, and enhancing mobile possibilities for customers who increasingly expect to order on the go. PMQ talked with operators and experts in the field to find out how the new generations of POS systems are working smarter and harder for you—and your customers.
Made to Order
Online ordering has been called “the future” for a while, but let’s face it—the future has now arrived. According to Duessa Holscher, marketing director at Granbury Restaurant Solutions in Grapevine, Texas, POS systems now integrate with various online ordering providers, making it easier to manage your online menu with direct POS updates (especially important if your menu items or coupons change regularly). The result? More efficient ordering for the operator and the customer.
“A strong integration allows consumers to process a credit card online but still gives the restaurant owner control over the final sale amount, including the ability to add a tip or a coupon after the transaction reaches the restaurant,” Holscher says. “Some systems also integrate other features such as expected delivery times, so if the store changes this information on the fly, the online system can be automatically updated to reflect the latest information. All of this communication between the two systems helps to keep the consumer informed and makes orders as accurate as possible.”
In fact, online ordering now integrates fully into the POS system and the app of a pizzeria. “In the past, online and app ordering took place on two separate systems, and subsequent reporting and printing were therefore also run on separate systems,” explains Lisa Falzone, CEO of San Francisco-based Revel Systems. “But cloud-based POS systems can easily make everything happen on one system.”
At Aurelio’s Pizza (aureliospizza.com), based in Chicago with 45 locations in six states, a fully integrated POS has upped the ante. “A pizzeria used to be able to collect data on a customer such as name, address, phone number and order history,” says Kirk Mauriello, director of franchising for Aurelio’s. “Now, POS companies can build platforms to work with other business systems. The POS terminals can handle credit card payment, a rewards card or coupons. It all works together, saving steps and helping reduce the margin for error.”
According to Alan Hayman, president of Hayman Consulting Group in Potomac, Maryland, POS systems also benefit the customer, thanks to improved user interface for ordering and a simple format that allows for complete customization (i.e., inputting instructions such as ‘extra sauce’ or ‘no onions’). And Michael Stuhlman, director of sales and operations for Breakaway Restaurant Solutions in Arlington, Texas, points out that companies are continually updating systems to make them more user-friendly—from introducing mobile versions of the ordering platform that don’t require a standalone app to more social media integration.
—Mike Reinecker, PDQ POS
POS systems even make things simpler for “old-school” customers who prefer to call in their orders. Caller ID is now standard; the POS at Aurelio’s, for example, recalls a customer’s past orders and can apply the same order specifications with the click of a button—ideal for saving time in a business where ordering the same items repeatedly is common (while also “helping the customer feel like we know them,” Mauriello adds).
But, Holscher notes, POS systems can provide even more information about a call-in customer. Employees can see if that customer is a member of the restaurant’s loyalty program or is calling back on an open order and can respond appropriately. Some systems also offer an optional e-mail confirmation for phone orders, giving customers confidence that the order is correct (while collecting valuable email information for future marketing).
All of this translates to a smooth experience for customers. “They want the benefit of the store connecting their order history, loyalty programs and even gift cards to an order that’s called in, without them having to remind the operator,” Hayman says. “Meanwhile, for the operator, advanced mapping tools on a POS can not only identify a delivery area, they can also differentiate parts of a territory and upcharge for certain delivery orders or limit certain areas where delivery is not available based on the time of day. With the right system, those decisions are made by the POS—not the order taker.”
Loyalty programs are major marketing tools for pizzerias, and POS systems are making their management simpler while streamlining enrollment: Simply type a phone number into the system—no physical cards required. “The key is to get people signed up quickly and be able to use multiple identifiers (bar code, cell number, home number, email, etc.) as the link. The client can get a tag to take with him in no time and go to the website to add more information at a later date,” says Hayman. “The incentive for operators is also to be able to get rid of plastic altogether—cards are expensive, and people are tired of having so many.”
Accordingly, Hayman believes the future of loyalty cards lies in smartphone-based solutions and POS developers offering apps as an extension of loyalty and gift card programs. Customer data would be stored “in the cloud,” not at the store level, making the process easier, especially for operators with multiple locations.
Tim Freida, VP of sales for Microworks POS Solutions in Webster, New York, agrees that POS systems now offer seamless integration of loyalty services via all ordering formats—mobile, Web, desktop or in-store—so customers can accumulate loyalty points in one holding account that’s saved in the cloud. “In-store, an employee can ask for the customer’s cell number and automatically send an invitation to sign up for loyalty via text message, while online orderers can opt in for email and SMS text messaging,” Freida says. They can also receive text messages with updates on the status of their orders. An Internet portal allows the customer to track his loyalty account, and multiple stores’ data can be sent to the operator so that loyalty customers who have opted in to email/text updates can be sent marketing blasts.
“Most of the new loyalty programs have gone cardless, and in many cases they integrate with the pizzeria’s POS system,” Liguori says. “Our program is as simple as getting the customer’s mobile number into the system. Upon signing up, our customer receives a text to continue the registration process, and the more info they input (email address, birthday, etc.), the more credits they receive toward earning a free meal.”
Meanwhile, many credit card processing companies have created loyalty programs that work simply by registering a credit card with the restaurant. “In this case, all the customer has to do is use the same credit card for each visit, and he receives credit for the meal,” Liguori says. “Also, POS systems have moved away from the traditional ‘pole display’ to customer display screens. At my Winter Park location, if the cashier doesn’t ask the customer to be part of our loyalty program, a display screen shows an invitation graphic to join.” This graphic can be changed to post reminders about Facebook, upselling desserts or other items, catering or any other message that Liguori wants to communicate to the customer.
Today’s POS systems integrate loyalty programs to keep track of customer purchases—and then can be programmed to send customized offers based on the customer’s purchase history, says Mauriello. Hence, POS is increasingly being used to generate targeted promotions. “First-time customers, loyalty program members, and special targeted groups like teachers, military personnel and college students can be verified instantly and directly marketed to with discounts and special offers, without the worry of customer abuse and fraud,” notes Jake Weatherly, CEO of SheerID in Eugene, Oregon. “For example, teachers who come in to eat with their family can be instantly verified as teachers and then sent specific marketing messages about hosting school fundraisers.”
With a well-designed rewards program, a restaurant owner can take a hands-off or hands-on approach to electronic marketing sent to customers, from “set it and forget it” email campaigns (birthday, anniversary and holiday emails) to more targeted campaigns (Tuesday Wing Night), according to Mike Reinecker, director of sales for PDQ POS in Newtown, Pennsylvania. “Detailed rewards reports allow savvy owners the ability to track every dollar spent and every point redeemed to identify the most effective campaigns that are increasing sales,” he notes. “When online ordering is integrated into rewards and loyalty programs, it becomes a marketing boon for business owners. Trends can be identified, and valuable data can be extracted, providing excellent deals for the consumer and continued sales growth for pizzerias.”
And for those customers who require immediate payback, more retailers are now offering instant rewards in the form of POS-generated coupon offers, according to O.B. Rawls, leader of merchant accounts for TASQ and leasing sales at Atlanta-based First Data. “At the time of purchase, the consumer not only receives a receipt, but also a reward, details of which are either printed at the end of the receipt or on a separate coupon,” he says. “At their most sophisticated level, these programs deliver highly effective personalized offers; for example, if a customer has just bought a pizza, the operator’s data system can recognize that today is his birthday and immediately generate a customized coupon offer: ‘Happy birthday! As a token of our appreciation, please accept 10% off your next purchase.’”
POS systems are famous for improving operations and customer service, but they can also help you save money. Eyenalyze, a new software that attaches to a POS system, further streamlines the process by working with both POS systems and foodservice providers to offer plate costing and daily gross profits. The program pulls food cost data directly from your suppliers, along with labor and overhead costs, and provides a simple report that helps you determine your profitability on a daily, weekly or monthly basis. The approach is designed to save legwork on the operator’s part.
Based on a subscription model, the software currently works with only a handful of POS systems and suppliers, but the company is looking to branch out to more in the future. “Franchises have the means, methods and money to create interfaces with POS and see how they’re doing on a daily basis, but independents often don’t,” observes Jeff Detweiler, co-founder of Eyenalyze, which is located in Conway, Arkansas. “We’re creating a culture for vendors to send information electronically, creating a ‘digital back office.’ Paperless is passé—now it’s all about digital.”
When protecting customers’ credit card information, you can never be too careful, and POS systems today are ready to meet that challenge. “There are many levels of security to consider,” Holscher says. “Not only must your POS software be certified as PA-DSS compliant, you also have to make sure your hardware and computers are configured correctly and your network is securely managed on an ongoing basis. We recommend encrypted credit card swipe devices and complete tokenization of all credit card data—which means that the swipe itself will encrypt the card data and send that information to the processor, who is the only one that has the key to unencrypt it.” This reduces any chance of credit card data being compromised on the way from the swipe to the POS system or while in the POS system itself, because the POS will never have the card number. Similar secure pin-pad devices allow you to type credit card numbers for phone orders and immediately encrypt them, Holscher adds.
Mauriello notes that any POS system should be PCI- compliant and integrate credit card processing, as opposed to entering an order on a POS station and then running a credit card through a standalone terminal. “A PCI-compliant POS system sends out the credit card information over a secure Internet connection to the credit card processing company, and then it receives back a token (encrypted number) transaction, so no credit card number data is stored in the POS system,” he says.
However, just because a device is considered “compliant,” Rawls warns, that doesn’t mean all vulnerabilities have been removed. “While encryption and tokenization solutions are necessary to protect payment data in transit and in storage, EMV (which stands for EuroPay, MasterCard and Visa, the three companies that devised the standard) provides authentication when used with a PIN and also provides additional transaction- and card-level validation,” he says. “Operators should look for a layered approach to payment security to help protect sensitive data.”
Falzone also recommends secure EMV technology, which takes a POS system beyond the scope of PCI compliance, and advises operators to check their equipment—by April 2014, POS systems running on Windows XP will no longer be PCI-compliant.
Finally, don’t ignore the necessary upkeep on keeping customers’ information secure. Haynam recommends the following:
• Protect password access to systems—stealing passwords is the No. 1 way that hackers gain access.
• Make sure your POS vendors are on the approved lists (i.e., PA-DSS, Visa, etc.).
• Keep your software up-to-date, as vendors upgrade their systems for security issues.
• Keep your systems under a software support plan.
Following these steps will help ensure that your POS system—no matter how many bells and whistles it has— takes care of the real bottom line: your customers.