Reforming Retail

Are Merchants Getting Dumber Or Is POS Getting More Complicated? Customer Support Data Invites Questions

Very few resellers track metrics in any meaningful fashion. That’s because most resellers – and legacy POS providers for that matter – are actually former merchants, and merchants don’t run their businesses objectively. When we do find resellers that track metrics we look closely because there are often implicit learnings in the information.

What follows comes from a very sophisticated reseller who has worked in the highest levels of finance. He and his team track every metric imaginable so they can both improve customer service and drive down their own business operating costs. It’s almost like data can be used intelligently… what a novel concept for brick and mortar, eh?

First the graphic.

What are we looking at?

This is the number of support calls per customer over time. As you can tell by the dotted line, there’s a pretty strong correlation that the number of calls is increasing. Some background before we get into the analysis.

  1. Customer contracts per technician have remained flat, meaning that the reseller is not understaffed
  2. The reseller is not a payments bro: they qualify merchants and ensure the right product goes to the right merchant (they carry multiple POS offerings)
  3. The majority of support comes when a merchant gets a new system (let’s call it the first 90 days). Over time time new customers account for a smaller percentage of the portfolio

What could cause such an increase, then?

Our first thought is that merchants are getting dumber. Idiocracy, a movie meant to be a satirical commentary, turns out to be turning true. Scientists are looking at bad diets, the rise of entitlement programs (i.e. welfare), and the ubiquity of technology – why learn the product of 5 and 7 if you can just punch it into Google? It’s possible the people with the fastest erosion of IQ just happen to be flocking to brick and mortar because they’re not getting jobs at Google and Amazon. The economic growth over the past couple of years has definitely spurred a lot of first-time business owners to open new businesses.  A great example is the vaping industry – lots of new stores run by people with no retail experience.

Our second thought is that POS technology is getting harder to use. Maybe POS companies aren’t investing enough time into perfecting their core products because they’re chase bolt-ons and every conceivable way to monetize the merchant. While 80/20 isn’t close to good enough for core features, these POS companies might be stopping at like 60/40 as they get distracted with dollar signs elsewhere. Micros and NCR have caught flack on review sites for their lackluster tools like MyMicros and Aloha Pulse for years, and now even newer cloud POS companies are finding the same grief as they seek to expand ARPU (revenue per user).

Payments companies make this worse: Heartland reps know their Cash Register Express software can’t compete against Clover and Square on sex appeal, so they position it as an affordable, yet “robust” software. It has 100x the features, but that only confuses the simple merchant.

Another thought is that the rapid change in POS business models – and general confusion that comes with such sea changes – is responsible for the uptick. Merchants are confused as to what vendor owns what, and when they’re bombarded with “Free POS” offers they might be double checking what their existing POS can and can’t do.

All of these are only plausible theories, however. What should be examined is if software like Boomtown can minimize these support issues and make resellers more profitable.

2 comments

  • Not hard to guess it’s the POS — just showing off its brittle underpinnings that manifest as problems with availability, reliability, security, underneath a generally horrible UI. More digging will likely show that feature updates over time increased problems. It’s software that is rotting from the inside out.

    For reference, our own L1+L2+L3 support tickets across brands in total are approaching an order of magnitude LOWER than these numbers.

    So it *is* possible to make a reliable, available, secure enterprise POS that is easy to use and has few support incidents. But whatever that reseller is supporting looks like a dumpster fire. Run.

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