We sell software to hair salons. It’s a good marketplace for us. We enjoy working with salon owners and their people. They know about good customer service – they have to it’s such a personal business. We have been talking with some of our hair salon clients and they think we need to use sex to sell our software. What we have today is a great computer program for hair salons but it looks like a computer program. They want it sexed up so it looks like a fashion item. This, we are told, will make the computer system more useful. We have accepted the challenge and are off to the cosmetic surgeon to turn our software into something beautiful and, maybe, even erotic. Erotic hair salon software … now that’s an idea.
Our annual software support fees start at $595 and go up to $1,590 depending on the software modules purchased. This is for 24/7 telephone based software support coverage, email support, direct online help from software, software updates (usually three a year), user meetings, group training sessions, weekly email bulletin and newsletter. One of our competitors charges, on average (from what we have been told) twice and some times three times what we charge. While they can charge what they like, their fees impact us since in the small business marketplace users don’t expect there to be a big difference between the charges between software companies. We invariably get tainted by their brush.
Software support fees come down to what is fair to the software company and fair to the user. It is important that all users are charged and treated equally. It is also important that continued access to the software is not tied to support payment.
I’d like to see software companies required to publish their support fees in their literature, as part of the sign up contract and on their website. Such transparency would stop the games being played by some today which cost their weaker clients too much money. We happily publish or support fees.
My post of a few days ago noting that we are being pursued by two Indian software companies to outsource development has resulted in more contact from more Indians. They want to know why I would not retrenching my development team in Australia and replacing them with Indians. Their contact is as frustrating as the call which comes just as you sit down to dinner in the evening from someone selling cheap phone calls or insurance.
I blogged here a few weeks ago about our concerns over the mobile phone towers on our building following the news about the health problems of some employees of RMIT where phone towers are located. We have received a 10 page report prepared by EMC Technologies based on their measurements at our office last month. Radiation measured at 750 times below the recommendations specified in the ARPANSA standard for occupational exposure. We have been told that this standard has a fifty-fold safety margin. Magnetic field levels were recorded at 312 times below the limits specified by NHMRC for Occupational exposure.
It interests me that the RMIT story disappeared as fast as it exploded on TV and in newspapers. We reacted by paying to have our workplace checked out. I expect many other businesses would have reacted the same way. But what of the RMIT employees and the building itself? There’s not been much published since. While we know more because of the experts we brought in, I would like to see follow up stories on the RMIT folks and the mobile phone tower situation more specifically. There is a risk, no doubt about that. But from what I understand, it’s not so much the people underneath but those on the other side of the street.
We try and educate our small business customers that a good loyalty program is much more than giving fake discounts off petrol or points which are hard to access. A good loyalty program is one which delivers genuine value to the consumer and which rewards the business with a measurable increase in sales. Smart small business operators, particularly those in regular traffic businesses like newsagents, chemists, card shops, gift shops and supermarkets can build a program which stays wholly within the business.
In our own retail shop, where we experiment with everything we put into our point of sale software, we run a loyalty program which resets every eight weeks. Customers get the card and have eight weeks to achieve the goal and the prize. I’d venture to say that this program is among the most successful loyalty programs in Australia.
Our software is built around similar principles – providing users the ability to drive sales in the store rather than pushing them outside to get some cents off inflated petrol prices. We use points and other rewards to help business owners to reward customers. So prefer to send a cheque – we can handle that too.
Like anything, a good loyalty program takes work. Good software is the first step. The business benefits from tight management and active promotion in all interactions with the customers.
Smart small businesses can compare their offering to Coles’ FlyBys and those from other big businesses and clearly demonstrate to customers that small is not only beautiful – it is also more valuable.
No sooner had I blogged about a new software support role in our Brisbane office and two Indian companies made contact suggesting I move the positions offshore. Besides that I would not do a Qantas and shift Australian jobs offshore, their pitch was completely impractical given that this is a field position. Not happy with that response, one of the Indian companies suggested I consider closing down my software development team here and contracting the work to them for a quarter of what it costs today. It was a hard sell – telling me that my company will fall behind unless I move development to India and cut development costs.
When I received the usual telemarketing call from Mumbai or some other Indian city Friday night at home I at first thought one of the companies had tracked me to my home for another crack.
It is unacceptable to me that companies like Qantas, banks and insurance companies move jobs offshore. No share price boost is worth the social and economic damage in our country. We ought to be more parochial.
We lost sales in the mid 1990s to a competitor because they promised a bill payment solution to newsagents. Their pitch was that they had built a multi million dollar data centre for processing bill payment direct from within their software. While we said we did not expect it to come off, we were naive in not challenging their claim harder. They won some good business on the back of the strategy. Their pitch, as recounted to me, was that newsagents could make more money on transactions through them. For a year they surged ahead. It never eventuated. From what I can tell the project was never anything more than a sales pitch. I was reminded of it this week when a newsagent made the switch to us. We had a laugh about how the multi million dollar that data centre was going to make newsagents rich only made the competitor rich.
Every claim made by sales people to get you to buy their system ought to be documented. Promises about future projects ought to have a value which is refunded if their pitch does not eventuate.
We are finding that we take on considerable baggage when we replace a generic (non industry specific) POS system with ours in the newsagency, bike retailer, hair salon or jeweller market. We specialise in these four markets and know that a generic system is unlikely to suit long term yet local computer shops (especially) grab any sale they can without understanding industry specific needs. A year or two down the track, after losing too much time trying to bend the software to industry specific needs, the small business gives up. The challenge for us is to get them to believe that as a specialist software company in their market we understand their needs, that they can trust us. Often they think that all software companies are as bad as their last experience. Had they come to us or one our expert competitors first it is less likely there would be baggage. Instead, we are effectively on trial as they expect our software to fail just as the generic POS package did. While it will never happen, I wish that those selling generic POS software could be made to pay for their bad advice.
We are planning to advertise a position soon to be available in our Queensland office but before I spend $165 on a SEEK ad, I thought I’d post the details here:
POINT OF SALE SYSTEM INSTALLATION AND TRAINING.
This is not your typical computer support role.
We’re a 25 year old Australian software company. We develop and support point of sale and back office software for newsagents, jewellers, bike retailers and hair salons.
We are seeking someone with good IT and communication skills to join our support team in QLD. 80% of the work involves on site time installing systems and training clients on how to use the technology in house for greater effect. The rest of the time would be at our office in Mt Gravatt, QLD.
We’d like you to have a good understanding of business and enjoy working with small business owners and their employees. Strong IT skills are also essential. However, our work is not at the pointy end of technology involving the latest and greatest IT tools. Our clients are small businesses and as such require cost effective business focused tools more so than the latest gadgets.
We offer a career path through our help desk, installation and on to management within the company.
Please find out about us and apply with a letter pitching why you are worth considering. If you just send a resume we will discard your application.
We use this application approach to separate people who understand requirements and communicate well.
Exceptional written and oral English communication skills are essential.
Tower Systems is an equal opportunity employer.
Please do not post this advertisement or the position details elsewhere.
No agents or consultants – we only hire direct.
Applicants must be Australian citizens or permanent residents with excellent English skills.
If you have applied for this position in the last three months please do not apply again.
We use email for customer newsletters and other important communication. It’s cost effective, efficient and green. While we occasionally send a snail mail newsletter, this is rare. This week one client complained that he was not aware he had to do a certain thing because he had not received an email. He uses email for personal matters but not business. Business communication should be in writing he said. I was taken aback. He demanded that we post him copies of all emails we send. When I reminded him that we had not increased our support fees in four years and that to do this we would need to revisit this he was not happy.
One way we have been able to maintain our software support fees at 2002 cost to our clients is by use of email and our website as a key means of communication. By establishing these operational rules we have been able to maintain good service levels without increasing our operational costs.
When he asked in the customer is always right I said than in this instance no – especially if the customer enjoys not being hit with annual cost increases.
I met a supplier to a national supermarket chain last week and, the next day, an employee of the same chain. Both told the same story but from different perspectives. The supplier is under constant pressure on price and terms – so much so that the supermarket chain is barely break even. He needs them to maintain production volume and therefore reasonable costs to enable margin from his small business customers. The employee is under constant pressure on hours. He is paid for 40 hours and is expected to work an extra 5 or 10 every week without pay. The threat is that it is only this extra work which is noticed at review time.
If I look at the prices charged by this chain for, say, produce, I can get the same quality at the same price at the local greengrocer where the employees seem happier and I bet they are not ‘forced’ to work the extra hours without pay.
Neither the employee nor the supplier can afford to get the major supermarket offside so they put up with unreasonable conditions and they allow themselves to be part of the working poor. They sacrifice for the share price of the company. While they are not happy, they are not prepared to say anything which puts their position at risk as the threat of loss of employment or supply contract is well understood.
Of course, the supermarket would deny that this goes on. Consumers would probably not believe it because of the nice TV commercials showing happy employees. The reality is that it does go on. Suppliers are getting screwed as are many employees. They cannot risk losing their jobs and contracts so they put up with it.
This is not socially responsible behavior by the supermarket chain. But they can assuage their guilt by making a donation to a charity or two and winning kudos in the press for their good works.
The search for another person to join our Sydney office in an IT training and support role is over. The position has been accepted and our latest employee starts in a few weeks. This has been a very tough position to fill in part because we have been very specific in what we have looked for and in part because of the flood of wannabee candidates being pumped out of our universities. We ended uop interviewing 15 candidates and it was only on the last day when we found our person, or they found us.
Of the 100+ candidates who applied, more than half did not read the ad and did not follow application guidelines and were discarded. We asked for a personal cover letter more than a slick resume. More than half provided the résumé only. There was no sense that they had researched my company and what we were interested in. Their inability to follow a simple request i the ad meant we had to knock them out. Most of these candidates were recent IT graduates who have spent three years getting a degree in basic IT skills and looking for a company to teach them what they really need to know.
I appreciate that sounds harsh. The reality is that only a few IT degrees in this country prepare people for practical IT work right away.
Anyway, the search is over for now and we’re looking forward to having additional resources – we need then in NSW as sales are very strong. We’ll repeat this process next month with another candidate search in our next growth hot spot.
This blog is a mish mash of opinions on matters ranging from small business to matters relating to my software company, Tower Systems. I do not blog as part of our marketing nor do I blog to communicate with clients. Indeed, blogging is more therapeutic than anything else, especially the entries which never get published. I was surprised to find out today that at least one of our competitors reads this blog and talks about it. I’m not sure why they would bother, but they do. The only secrets of our success I reveal here are a commitment to openness and a passion for the businesses of our clients. Every reader is welcome here.
We have been looking for a new IT support person for our NSW office for three months. A month ago we were thrilled to have found someone we wanted to offer the position to. They had the right skill set and attitude. We sent a letter of offer pitching a good package including company vehicle and some other perks. We’d usually hear back in a few hours but this time there was no response. After 24 hours we made a follow up phone call. Then another. And another. And one more. Each time we the call was either not answered or we were fobbed off. Today, a month on, we have still not received a response. What makes this frustrating is that the candidate used to work for a competitor of ours two years ago and he currently works for his dad in one of the markets we serve. We matched everything he was looking for. In the interview he was most positive. The silence provides no answer and makes us wonder what we missed or that we were being played.
In our business software updates are like living with days of full moons in a row. Every small challenge a user encounters after they have installed a software update has been caused by the update in their eyes. Many jump at shadows for days and weeks after installing an update. Help desk call traffic is up between 30% and 50% and more than half all calls are a pursuit for comfort that all is okay. The update we have just sent is huge. It is our first for five months and delivers significant enhancements including more real-time POS terminal direct supplier links. So the back end complexity has increased considerably. And so far, more than a week in, only two small issues and they have been fixed already. Our support team are already calling it one of the best (from their perspective) updates ever. The quality of the update notwithstanding, we still get plenty of calls from people worried that their world has changed colour because of the update.
We provide updates without cost to our clients who take out annual support coverage. The support contract includes 24/7 help desk access.
Despite letters and meetings and an acknowledgement of production problems with a model of touch screen we purchased from 3M for clients, 3M refuses to undertake a general recall and rectify the problem. They have agreed to fix the units if and when they fail but they will not recall all even though our experience is that eventually many will fail. We have moved to the Elo touch screens as a result.
The call from a client starts off as an enquiry but a few knowing questions later you know you’re dealing with another likely employee theft problem in a retail store. The story is the same. A trusted employee. The owner had had suspicions for many months but was in denial. They don’t want to involve the police but they will have to because the financial impact on the business will require an insurance claim. As I see all too often, this theft could have been avoided had the owner managed the record keeping of the business as if the business records were an asset. They were sloppy with their IT systems and the data they stored. This showed the employee how they could help themselves to some cash. It’s why the problem reached the six figure cost. Completely unnecessary.
We have been working with hair salons for several years but it is only in the last year that we have really started to understand the dynamics of the salon business. It’s different to any other market in which we serve yet the learnings from working with salons are improving our software for newsagents, jewellers and bike retailers. Salons are personal businesses. Every sale involves considerable personal contact. The software needs to understand that and facilitate each experience adding to the knowledge of what the customer wants. We have been listening and adjusting our hair salon software accordingly. And, as I noted earlier, adjusting our software for other markets. This is what is great about serving several divers markets – there is an unexpected synergy between the needs of newsagents, hair salons, bike retailers and jewellers and we’re using that to build better software.
Australia has around 12,000 hair salons and we understand that less than 40% have systems. They market potential is excellent. However, we also understand that there are at least twenty companies like us touting their salon software as worthy of consideration. What separates us is our 25 years in business, our national footprint, 24/7 support and business outcome focus of the software.
Salons can be a challenge to deal with. In fact we almost walked away from the market. And then we realised that it was their intense customer focus which drove them and once we shared the embrace our relationship improved.
June is like a month of full moons for small business software companies. All sorts of weird issues and questions come out of the woodwork. Customers and prospects want to rush business through before the end of the financial year. Customers take parts of the software such as stock take on a once a year spin. Customers want copies of invoices they have lost. Others want us to invoice in advance for services to be provided next year. While most of it is good it can be frustrating handling the weird requests while plenty of regular business transacts around it. It is the out of the blue rushed sales calls which are odd – from someone you have never had contact with and they want to make a $25K decision within 24 hours over the phone and without knowing anyone else who uses your system. We have a structured process and resist speeding it up. We’d rather guide a prospect to and informed decision than have them make a spur of the moment decision and regret it later.
These last minute June decisions are in my mind today because of two calls from new prospects. Both do not like their current system. Both purchased in June a couple of years back and at the last minute to get a deduction (base don how it was invoiced). The result was not the right choice for either and no they want to change. At least this time we have a few weeks to ensure we understand their needs.
We’re deep into a launching a start up and wanted to consider sharing the financial risk so I arranged meetings with a couple of potential investors. Armed with a business plan, forecasts and a product 99% ready for market, the need for cash was more about marketing dollars than anything else. Their excitement for the proposition was exposed as fake when their only interests were exist strategy and security for their investment. They wanted security outside the startup so that there would be no risk at all. While that’s their right, where’s the risk? Why bring on a partner in a new venture if they are not prepared to share the risk? A bank would require less security than the VCs I spoke with.
Some software companies make a big deal about being Microsoft certified. They wear the badge with pride and use it as a competitive point of difference. My questions are: Who ensures that the necessary skills are maintained to certification level? What is the difference for the customer? What checking is done by Microsoft to ensure that the deliverables from a certified company are better than those from a non-certified company?
I ask because there seems to be an opportunity to gain certification without the need to maintain the required skill level. If this is the case then one has to ask what the value of the badge actually is. It seems to me a bit like anyone being able to call themselves an accountant.
I received a state Land Tax bill claiming I owe tax on a property I have no interest in. I contacted the State revenue office and their response was pay the bill and we’ll sort it out later. I refused. They said there would be penalties. I still refused to pay. Two weeks later I received a letter advising that they had made an error. May would have paid and waited for their investigation. It’s nuts that State Revenue acts in this way.