The tell of a software company struggling for relevance

A tell that a software company is challenged for relevance is when they respond to a competitor’s launch of innovative software by promoting software from other companies that they claim covers the same application areas.

Good software companies let their own software speak for them.

Innovation is expensive and time consuming. Promoting what someone else has done in order to spoil the innovation of a competitor takes a few minutes. It shows the operators of a business up for what they are and are not.

Helping a competitor lift their game

One of our competitors is in a tough situation with several customers complaining about support and software problems. We know about this as the customers have come to us.

In one situation we have been involved for two months, providing the customer with guidance on how to get the matter resolved with their software supplier. Our work has involved troubleshooting the issue to help focus their communication and translating some of the technical responses they have received -into non. tech language.

We have not used these situations to switch the small business to our software as we see that as something for them to consider when they are ready. Our focus has been on helping them get the immediate problems with the software and support resolved. Sometimes, a competitor being aware of our involvement is enough for them to lift their game.

POS software companies serving small business retailers need to quality check their contact to ensure they are genuinely helping customers in the way the customers want. While we’d be happy to win new business, this should not be needed if the sales and marketing promises made pre-sale are kept.

POS software company says no and loses a sale

We lost a sale recently because we would not give a sales prospect exactly what they wanted. What they wanted and what we do here at Tower Systems through our POS software were not aligned.

We are a specialist retail channel software company, offering software highly tuned and tailored for a specific selection of retail channels. We do this well. We don’t offer bespoke software unless enhancements developed could benefit one or more of our specialist retail channels.

In the instance we are writing about today, a sales prospect wanted something specific to their business which had no value to any other customer. While we could have done the work it would have taken attention away from commitments to existing customers. It was for this reason we said no thanks.

While it is never easy to walk away from revenue, we appreciate the long term relationships we have in our select group of retail channels and feel we are better served serving them than investing too much time serving the needs of one customer.

POS Solutions publishes inaccurate information on discount vouchers

POS Solutions has again written about the Tower Systems Discount Voucher facilities on their company blog.

While we will not go through all points in their blog post, we will address some in the interests of accurate representation of discount vouchers. The first point published by POS Solutions to address is:

Let first start off with the obvious, I would be delighted if Discount Vouchers worked. It would be a good for my clients, and I am in business to make my clients better. Furthermore, I do not appreciate name calling or rudeness. I am not trying to divert anything, and I have done a significant amount of research on this question.

This infers that Discount Vouchers do not work. That is not true. The Tower Discount Vouchers do work. In our own businesses we have the voucher and supporting financial data to prove this. Many retailers using Discount Vouchers say they have similar successful results. Despite this evidence, POS continues to spin that they do not work. The distinction is, the Tower Systems Discount Vouchers work.

The writer on the POS blog says they have done Wikipedia research and research on their own blog. That research is about a voucher from their own software. While that voucher may be called a discount voucher, it is not a Tower Discount Voucher, it has not been created with the same sophisticated and successful Tower software.

POS then states:

At the time I released this report, I noted that their users felt that the results I got were consistent with their results. You can read yourself the comments. Not one person said, “hey my results using Discount Vouchers are different to these figures.”

This statement is not supported by the facts – which users? Where did they say this? They publish no details supporting their claim.

Then there is what we would label as spin:

Additionally, at the time, this critic offered to release more data and then withdrew that offer immediately. See here for the formal withdrawal.

This statement not supported by the facts – there was no formal withdrawal. They engaged in a game which looked like an attempt for us to help them understand how our software worked.

Then they publish a breathtaking assumption:

That I feel that this loyalty program is expensive, well most reward programs in retail run at about 1% of sales see here. The Discount Vouchers scheme as you see from the above image run at $4,475.89/$98,299.79 = 4.6%. It is expensive!

This statement demonstrates an ignorance of how you measure the success of Discount Vouchers as the benefits are not only those directly achieved from voucher redemption purchases. No, the benefits flow deep within the business. This is a newsagency achieving 19% year on year revenue growth – many times more than the newsagency industry average. Take out the natural growth being achieved in the business and focus only on growth from the time Discount Vouchers kicked in and the benefits are more than the flawed POS Solutions assumption.

The author of the POS Solutions blog post makes another assumption about our approach to Discount Vouchers:

this scheme has minimal measurements

This is false and misleading. They do not know what reporting tools are available. The measurements available are not minimal.

Then they make another assumption:

Finally a Discount Voucher scheme, gives a voucher for every sale

This is not true of the Tower Discount Vouchers and even basic research could have helped POS Solutions avoid making such a damaging and false statement. For sales there are tight controls on the release of the vouchers. It is a considered process with excellent business rules. Also, there is the opportunity to produce vouchers for non customers. We will not go into that as it would divulge too much information the the folks at POS Solutions who appear obsessed with us.

POS finishes their post with an example:

I remember one client of mine that ran for a while a Discount Voucher system, told me that a customer came in and took two magazines. He then purchased one and promptly used the discount voucher to buy the other one. What he felt was that Discount Vouchers produced no incremental sales lift but caused a cannibalisation of his existing revenue by selling at a discount, product that would have been bought anyway. This was the first sign, I had that something was not right.

Our Discount Vouchers setup following our rules would not have issued a voucher in this situation.

We are curious as to why POS Solutions is so interested in our discount vouchers facilities. When we launched them they said they had the same facility. While they may (or may not) have something called discount vouchers, only Tower Systems has the Tower Discount Voucher facilities.

We note that our discount vouchers are in wide use in pet shops, garden centres, bike retailers, newsagents, gift shops and other retailers.

This post is about us being on the public record abut the matters POS has raised.

POS Solutions makes inaccurate claims about discount vouchers

Not all discount voucher facilities in POS software programs are the same it would seem. The experience we have in our own retail shops and the experiences we hear about from our customers are different to what others report with whether call discount vouchers in their software.

POS Solutions, a competitor of Tower Systems in the newsagency space has made claims about loyalty and discount vouchers which we challenge here in the interests of accuracy and robust competition.

At their company blog, POS Solutions publishes this:

Firstly i actually do not like discount vouchers as they are an incredibly costly programs, see here for numbers.

They link to an article of theirs from a year ago where they use a report from our software to claim that discount vouchers are expensive. There is no evidence in the Tower report or elsewhere to support their claim.

Our experience in our own retail businesses and the experiences reported to us others using our discount vouchers facilities is that they are not costly. We say POS Solutions makes the claim in a marketing effort to divert attention from a successful loyalty program.

It is important to note that the Tower Systems discount vouchers approach is sophisticated and exclusive to us. The calculations in our software are secured and encrypted. While we have no copyright over the term discount vouchers, we do have copyright protection over our code and protect this with care for us and our softwares.

The POS Solutions website and blog publishes this statement:

Additionally what type of a person will you be attracting, those that like perpetual discounts. I have seen a report that people whose first purchase is induced by a price reduction are 50% less likely to want to make a second purchase. This I can believe as what your discount is doing is attracting consumers hunting for a bargain, this is scarcely prone to instil shop commitment.

The evidence is that discount vouchers attract a valuable shopper delivering bonus margin dollars at the high GPO end of the range offered in the business.

They refer to a report but no link – leaving the reader to question the source of the report.

POS also publishes this about discount vouchers:

Also it has no chance of reaching those people that do not buy in your store in the first place. If they have never ever purchased something in your store, just how will you provide them with a voucher?

This statement demonstrates that POS Solutions has not researched the marketing opportunities in the Tower Systems discount vouchers facilities.

POS has previously stated that it offers discount vouchers. This was published around the time we released our facilities. In recent times they have taken to criticising discount vouchers. In the meantime, our discount voucher offering delivers for newsagents using them commercial benefits which we say provide them a terrific commercial advantage.

In the Tower software there are several loyalty options which can be used separately or together. Our discount vouchers facilities are unique to our software. They are a key factor in driving double digit sales growth and double digit gross profit growth. 

POS software helps family businesses nurture and share intellectual property

The Tower Systems Point of Sale software helps business owners encode and share information about how the business operates. recording intellectual property about the operation of a business and making it accessible to those working in the business makes it easier for family members to grow into the business and stay close to how the family has done business over the years.

Family businesses are different to non-family businesses. They are often run on a different basis and with different goals. Having software that enables to recording of business rules and processes makes it easier for these businesses to track and manage how things are done and thereby to continue family traditions if important to the business.

The Tower software offers a range of mechanisms through which business processes are recorded – guiding those coming into roles and needing to follow tradition.

When a competitor promotes your business

A competitor in one of our specialist retail marketplaces recently used a photo from from one of our own retail businesses where our own software is used on the landing page of their website. It took some prodding but they eventually removed the image – as they should have as it was suggesting they offered something they did not.

Nero fiddles while Rome burns

While we have announced our PayPal integration and started active in-store testing of an innovative link developed in partnership since last year with PayPal, a competitor has published material to suggest they are working on this too.  We urge retailers to ask to see the technology running and to see evidence of any claim of working with PayPal. We can demonstrate the integration and prove the long-term active engagement with PayPal.

Anyone can make an announcement. It takes leadership to deliver on the announcement with a useable product.

Footnote: what is hilarious is when the competitor published their post about Paypal they linked to a video that showed Paypal being used by other software – not theirs. If they had what they vaguely infer they have they would have shown a video of their software.

Tower Systems welcomes ACCC focus on drip pricing

Rod Sims, the Chairman of the ACCC, this week laid out in a speech to the CEDA conference the priorities for the organisation for 2014. Included in the priorities is attention on drip pricing:

Drip pricing involves the incremental disclosure of fees and charges over an online booking process. It causes both competition and consumer detriment.

Consumers see a ‘headline’ price advertised at the beginning of the booking process but when they progress to the payment phase, additional fees and charges have been added. Consumers purchasing airfares or sporting event tickets are all too familiar with this practice. Drip pricing involves a lack of transparency which may mislead consumers, and it can also make it difficult for businesses to compete on a level playing field.

Drip pricing can also exist where a customer signs up for a product expecting the price to be X and subsequently, once using the product, that the price is Y. Y pricing could be a mandatory annual fee that was not adequately disclosed in the initial sale process and that is not clearly documented in any contract.

We see this in the POS software space – where customers find that the cost of ownership of software is much higher than as represented in the sales process.

We will watch with interest engagement by the ACCC on this.

Catching a competitor spying on our POS software company

We have evidence of a competitor seeking to download confidential company information from our server on several occasions. This has prompted another review of our security arrangements. While it’s flattering the amount of time the competitor obsesses and has obsessed in the past about us, we want to make it harder for them to copy our innovation.

Tower Systems website and phone system attacked

Last week, our VIOP phone network and our website were attacked in two separate and sustained attacks. The Optus fraud team has got to the bottom of the phone hack and in working with them and our in-house technical specialist we have increased fortification to stop this type of attack in the future.

Our VOIP network covers several Australian states as well as New Zealand.  While the attack did not impact inbound services, we had challenges making overseas calls and so switched to mobile use to maintain support coverage.

The website attacks are on-going as those perpetrating them are on the move. Our external hosting provider is working with us to mitigate the situation. The worst case scenario is short-term outage for our website. Thankfully, redundancy provisions mean outage is minimised.

It is frustrating having to spend time and money protecting your business from those externally who are seeking to disrupt you.

Retail business POS software support fee rip off

We have been given a copy of a support invoice from a competitor which software that software support coverage is labelled as compulsory registration. The invoice indicates that if this is not paid, access to electronic invoices will be cut off. Since this is an important time-saving facility for retailers some will feel economically pressured to pay the ‘registration’ fee to keep getting the time-saving electronic invoices.

Our view is that once someone has paid for the software, paying for software support should be optional. This is how it has been always at Tower Systems and how it will continue. We want our customers paying support because they like what we do and not because of a threat of economic and operational hardship.

Retailers should check the claims made by POS software companies

We encountered a situation recently where a retailer said they were leaning toward a competitor because they were bigger than us. This competitor claims to have 50 employees, more than us.

Anyone can make a claim in a sales situation. We encourage retailers to respond to any claim with prove it. In this case, we’d say to the sales prospect – ask this other software company to prove they have 50 employees. We know they can’t.  They have fewer employees – not that employee team size matters.

The truth is what matters in any sales situation, especially in a Point of sale software sales situation since it’s a relationship for the long term. Make a good decision and your business will prosperfor years. make a bad decision and you could experience significant costs for years bundled with plenty of regret.

The best decisions are those based on the truth. Chase the truth more than a feel good experience as any good sales person can make you feel good for as long as it takes to get your order.

When companies lie

Thanks to today’s connected world it is easier than ever for customers and prospective customers, individuals and businesses, to check if a company is lying.

A quick search can check a claimed fact for accuracy. An email, text, online message, Skype or some other digital comms with a competitor can allow a sales prospect to see if a sales pitch statement is true.

Today’s connected and searchable world is a sales prospect’s best friend. There is no excuse for being fooled by a sales pitch that a company provides the best customer service or a claim that a company was first to deliver a particular technology. Thanks to the ease of such research companies making any claim need to ensure that the claims are truthful.

We encourage sales prospects considering purchasing our Point of Sale software to check us out online and among their peers. For years we have run our business knowing that in this era, more than at any time in the past, our actions speak louder than words and our actions can be searched.

Thanks to Google we are able to help prospective customers compare us, to see where others may be making claims that are not supported in fact.

Poor customer service costs a software company a client

We were contacted recently by a retailer using software from another software company. They were upset that access to a key facility through their software had been disabled by their software company. Here is what they told us:

Recently, we received the annually subscription bill from the software company we were using, it went up at least 10%. We consider the service they have provided us to be unacceptable.  There is no point to pay the subscription any more. Since we own the software, we should be able to keep using the software. However, today we found out we on longer able to download EDI invoice files from suppliers.

Blocking access to a business-critical function appears to be punishment to the retailer for not maintaining software support. Support is not necessary for processing the invoices, the retailer was not seeking support assistance. A facility that had worked for years stopped working the moment support was not renewed.

Tower Systems does not do this, we do not block access to our software or external links feeding our software if one of our customers decides to not continue software support coverage.  Our approach makes software support coverage genuinely optional. This is as it should be.

Retailers should continue with software support coverage if they like what we do and not because of frustration or pain that may come to their business if they do not maintain software support coverage.

We are pleased to have ben able to step in, show off our customer service and win a new customer.

Beware the computer sales person who bags the competitor

Everyone who represents Tower Systems is counselled to not discuss the competition. It’s not our job. Our focus is on our software and our services for it is these our customers love.

While it frustrates us to hear of a representative of a competitor bagging us (with lies), by focussing on our actions, the truth, we win more business.

You’d think sales people who win sales by lying would learn. Apparently not.

If you are fronted by someone representing a computer company, not just a POS software company, make a note of claims they make a bout a competitor. If you think you might go with them, get them to sign in writing to what they said about their competitor. This will be your moment of truth.

No Carbon Tax price rise from Tower Systems

We have taken time to consider the impact of the Carbon Tax on our software development and sales business, to determine how our operating costs will increase and when. There is no doubt that we face some cost pressure.

We will not be increasing our prices and fees as a result of the Carbon Tax.

Retailers using our Point of Sale software now and those who contemplating the purchase of our software can rest assured that our pricing will not alter because of the Carbon Tax.

We are making this announcement to provide the 2,000+ small businesses we serve with certainty and to reflect our confidence that we can manage the financial impact of the Carbon Tax on our business in a way which serves our needs and the needs of our customers.

There is plenty of negative noise from some politicians and certain sections of the media about the Carbon Tax. Our view is that this talks down consumer and business confidence. This is unfortunate since we should be focused on the considerable good news in the marketplace at the moment.

We are ending the 2011/12 financial year on a strong footing and are happy to share the fruits of this with this announcement about the carbon tax and our announcement at the start of the year that for the fourth year in a row we will not increase our software support fees.

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While Coles and Woolworths fight over customers, small business delivers value

We are fascinated by the money supermarket giants Woolworths and Coles are spending in their latest price and loyalty war. Each is trying to outdo the other with their claims of discounts and loyal shopper benefits.

Smart shoppers who price and service compare an independently owned retail business with Coles or Woolworths will often find that the independent retailer offers better value, value in the form of price, service, social responsibility and even respected brand range.

Small and independent retailers and the lifeblood of the Australian economy and they are our customers here at Tower Systems.

We recently compared prices charged by some retailers using our Point of sale software with nearby major supermarkets. Yes, our customers were cheaper on everyday items despite the advertising by the supermarkets.

Australian consumers need to look beyond the advertising campaigns and check for themselves. Often, the genuine value offered by a business is the inverse of what it spends in advertising its claimed value proposition.

We support our community of small and independent retailers by delivering retail management software while helps them to operate efficiently, transact accurately, order with reduced waste, reward loyal shoppers and manage employees for business growth and personal reward.

We help small and independent retailers compete in an economy dominated by large retailers.

Thanks to smart tools in our software, our retail partners can communicate the benefits of their business through several touch points during and after sales processed by our system.

By empowering small and independent retailers with outcome-focused competitive tools, oyr partners can bank terrific results.

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Paying for software support should be optional

Retailers considering purchasing Point of Sale software need to ensure that software support coverage is optional. We have seen situations where support is not optional and when not paid retailers are blocked from accessing their business data.

Ask the question and get the answer in writing as part of a proposed contract. Otherwise you could find that business data you have gathered through the year is no longer accessible unless you pay a mandatory fee.

At Tower Systems, software support coverage is optional. It always has been. We believe that the data you enter and cultivate using our software is yours to access whenever.

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Making sure you get what you pay for with computer hardware

Retailers need to check that they receive what they actually pay for when taking delivery of a new Point of sale system, especially if it involved hardware as well as software. Too often we have found retailers have been provided something less than quoted, less than they paid for. Here’s what should come with new hardware:

  • The original box from the manufacturer.
  • A written warranty.
  • A licence for any operating software including any CDs and keys to enable the software to be installed on the computer again.
  • Components inside the computer which match what you have been sold.
  • Any other confirmation that this is a new computer.
  • Details of whom to call should there be a warranty claim.

Being supplied second-hand hardware when you order new hardware or being supplied no name hardware when you have been told it is a trusted brand could mean you have been ripped off. The time to check this is when you are supplied.

Tower Systems supplies new hardware from brand name companies. All hardware is supplied in original boxes with manufacturer paperwork. All of our computers are from HP and come with an on site HP-backed warranty.

Yelling at a customer for switching POS software reinforces their decision to switch

While switching another newsagent to our newsagency software last week, the newsagent called their old newsagency software company to advise them of the move. What was expected to be a courteous call turned nasty quickly.

The owner of the software company yelled at our new customer, criticising their decision to switch to us. In their rant they made several claims about Tower Systems which are untrue. One of our installation experts was on hand to hear the call.

The best way any software company can stop people switching from their software to that of another company is by providing genuinely valuable and up to date software and to back this up with easy to access customer service.

No software company owns a customer. Internally, we regularly remind ourselves that we are only as good as the last support call and only as good as the last software update. The reminders focus our attention on doing our best today, in this moment, and not resting on laurels earned years ago.

Why people purchase software can be different to why they continue to use the software. This is where everyday timely and professional customer service and quality software updates are vital. The lack of either is the usual reason people switch software.

We are thrilled to be growing our newsagency software customer base through acquisition as well as through winning new customers a site at a time. W are equally thrilled with an excellent customer retention rate as indicated through optional annual software supper uptake.

The competitor who yelled at their former customer last week reinforced the decision the newsagent had made some weeks earlier and provided them with a story which will no doubt be shared with colleagues.

Respecting supplier embargos

We are given information by many suppliers well in advance of announcement to their retail partners. This early announcement allows us to test data files in advance of an announcement by suppliers to their customers. In most cases this data is provided on a confidential basis, some even have a specific embargoed to date. We respect this, keeping the information confidential. It is important to us that suppliers can trust us to be prepared in advance for our customers without abusing commercial in confidence information.

Tower Systems assists retailers with 2012 Point of Sale software support fee decision

Tower Systems announced to its Point of Sale software customers two weeks ago that support fees for 2012 would remain the same as they were in 2011, 2010 and 2009.

This decision provides our customers with certainty on the costs of maintaining their software and accessing our support services commented Mark Fletcher, Managing Director of Tower Systems. We are thrilled to be in a position to maintain software support fees for four years now.

While the company has maintained software support fees, it has continued to increase services provided to its customers … delivering more value today in 2012 than available in 2009.

All Tower Systems Point of Sale software customers pay a support fee which is published to all users and others who visit the company website. This transparency and the company’s public commitment to a universal approach to support fees is unusual in the vertical market software space.

We do not believe in special support rates to get someone to say good things about our software, commented Mark Fletcher. We want every one of our customers to say good things about us, this is why we take a universal and transparent approach to delivering support services, software updates and charging for these services.

In addition to holding support fees at their 2009 level, the company also announced support free discounts for customers who choose to pay support two or three years in advance.  These discounts offer retailers even more opportunities to reduce the costs of maintaining their software and accessing the Tower Help Desk.

The news about support fees remaining the same in 2012 as in 2011 was announced in the January 2012 newsletter which was mailed to all customers late last year.  The newsletter contained several New Year ‘gifts’ for Tower customers.

Tower Systems serves in excess of 2,500 retailers across a variety of marketplaces in Australia, New Zealand, Fiji and papua New Guinea.

Transparency vital to good POS software support

We often find ourselves logging onto client systems and researching a question or resolving an issue as if we were physically on site.  We do this in full view of our customers.  This is important as it is their data and their business we are looking at and, possibly, changing.  We want our customers to watch, so they are fully aware of what was done.

We have deliberately chosen remote connection technology which requires client transparency and, indeed, approval of our connection to their business – every time.  This is vitally important to us and to our clients.

We hear stories of businesses finding system settings or data changed without their knowledge or approval.  We don’t do this.  We can’t do this with how our systems are setup.  This provides our customers with certainty and comfort.

The risk of an easy and or open connection is that it could be abused by the IT company.  They could log in and damage the business in some way without leaving a trail.  They could, for example, cause problems which force the user to call the IT company’s help desk, thereby generating reliance on and revenue for them.  This is one of the risks of unsecure remote connections.

Businesses need to ensure that their IT infrastructure is secure, especially if their relationship with those who established or controlled their IT platform is not as strong as it once was.

The importance of competition among Point of Sale software vendors

We operate in a range of small business retail channels and have competitors in each.  Competition between software companies is good for each retail channel as it keeps the respective software companies focused on delivering better products and backing this with point-of-difference support.

We take our obligation to engage in genuine competition seriously. This means that we reject any invitation to collude on price, functionality or anything which would compromise competition.  Besides being illegal, it would do a disservice to retailers.

We build competitive advantage into our software and into our customer service.  It is important for us to talk about this, to leverage our investment in competitive advantage.  Current and prospective customers benefit from this.

Software companies have nothing to fear from robust competition as long as it is truthful and transparent.  The winners from this are the customers and isn’t that why we are all here?