Tower Blog

A blog about smart POS software for independent small businesses.

Category: Small business (page 11 of 13)


It’s frustrating to give someone a break into an IT role and have them move on barely a year into their position. While I appreciate that some people want to move as quickly as possible, patience is a worthy character attribute especially in IT. For your first IT role, a year is not long enough to build an appropriate foundation to stand you in good stead for the future. I’m proud of the fact that some of the best team members in my company are those who have come back for a second, and even, third time. While we’re not at the cusp of technology innovation, there is more to working here than playing with new toys and techniques.

I write this because one of our team is leaving in pursuit of new challenges. While I don’t think they have mastered the opportunities here that’s not a factor in their thinking. They have to make their own choices. For our part we gave them a break and proved their employability in an IT company. We lose a hefty training and development investment.

Employees are free to make choices like this yet employers are not. While I do not agree with the Workchoices legislation and the unnecessarily greater wedge it has created between employee and employer, I can understand why some employers are happy to have more flexibility in whether to retain some employees. While the scenario described is unfair, I accept it an employee right. It will make me more careful when next hiring.


Size does matter in software companies

We are down to the contract stage in evaluating CRM solutions for our business and it surprises me the difference between what the software providers propose in terms of a support relationship compared to what we provide for our small business customers.

For example, we charge a support fee based on the cost of providing the service. The CRM companies charge based on a percentage of software purchase cost.

Our support coverage is 24/7, theirs 8 hours Monday to Friday.

We take all manner of calls. They have a list of exclusions.

We allow people to make mistakes and to call for guidance. They will charge if we ask the same question more than 2 or 3 times.

We support any user in the client company. They support three people.

We advise the owner if any service is likely to be billed. They reserve the right to charge without warning.

We quote for changes and only bill if the work is done. They will bill us if we decide not to accept a quote.

While I appreciate our two businesses are quite different, I did not anticipate such expensive and onerous support provisions for CRM software. These extra costs for us put pressure on the prices we charge our small business clients. They also say something about the attitude of software companies playing in the big business space compared to the small business space.


The start-up challenge for a mature business

It’s so easy to get comfortable in business. Each year that passes boosts confidence adds to your feeling of comfort. I am reminded of the comfort of being established as we are about to launch an entirely new business. It’s a scary time considering budgets and risk and how much of the years of success one must put on the line to give the start-up life. But what’s life if you don’t take the risk? In this case, the risk is huge as the start-up in a very competitive space which is dominated by huge corporations. That is a motivator in itself. It forces us to offer a better product with greater flexibility and with the ability of connecting in such a way as to enable it to be promoted virally.

Common sense tells me to leave start-ups to others going into business for the first time. My heart says take the risk, compete with the big corporations – this is what you’re in business for – the ride! Our investment is substantial. While we have considered financial partners we have not pursued this because those we talked with early on asked more about their exit opportunities than the business itself. Like any start-up, this will need nurture for some time and it was too premature to even contemplate exit.

The balance of investing in the start-up while growing the core business is trisky. We’re coping and the drain on cash and resources is considerable. Again, one has to weigh up the risk and benefits.

So, we’re riding. We’re late to market but the offering improves with every day. The two years of work will start to surface in a consumer sense in the next few months and a month or so after that we will know if we have wasted our time and money or not.

What’s the point of this post? By talking about this start-up, even in oblique terms, makes it more real and that of itself is a motivator. You know so we have to see this through.


Employee theft hits independent retailers hard

We spend a fair bit of time helping independent retailers gather evidence on employee theft problems. Too often the alarm is raised too late, when the losses are already close to six figures. The only reason employees get away with theft is lazy management. It’s a choice the owner has made to be lazy. And then when the theft is discovered and the bank and other creditors knocking at the door demanding action, the owner is busy pointing fingers. The most common way employees steal is by not ringing up items customers pay for or by canceling a sale prior to its completion. The customers are none the wiser and the cash balances at the end of the day. Once theft is discovered the business owners complain that they don’t have time to watch the security monitor the whole time etc etc.

We’ve created a way around the problem. We have deeply linked our software with a security system such that it respects time poor business owners. It tracks the likely theft events and provides a highlights package from the day – so the owner only need see the footage from the counter which many be an issue. Taking care of counter operations in this way leaves the owner and or manager with more time for monitoring the body of the shop.

In creating the link we talked with police, lawyers and security experts to ensure that the evidence we gather is useful in pursuing a conviction.

The retailers association tells us that theft is costing between 3% and 5% of turnover. If we can cut that by even 10% then the solution we have created pays for itself.


3M fails to deliver reasonable customer service

We’ve been an active support of the 3M touch screens for a couple of years. They are regarded by many as the ‘Rolls Royce’ of touch screens. Then they started dying. 3M said all was okay with production. But they continued to die. Despite several efforts at resolving their poor failure rate with 3M they continued to blow us off. We could make no progress. We carried spare gear so our customers did not suffer. We also carried the freight cost even though we provided the gear on a return to base warranty basis. 3M continued to ignore us.

Earlier this month I wrote about the problem here. Last week 3M made contact with me but it was too late. We’ve taken their gear off our lsit of recommended hardware. Their touch screens are too unreliable and are certainly not worth the hefty price difference. We’ve replaced 3M with another premium brand and continue to offer the LG touch screens as our entry level model. The LG screens, I should note, have been excellent.

I can accept that problems will occur with new hardware from time to time. It was 3M utter denial about these problems which frustrated by small business and our clients. 3M appeared not to care about us and certainly did not actively engage with us in resolving the problems.

3M can tell us that they have learnt their lesson all they like, that learning has come too late for us. They had an obligation to address the problems in their touch screen manufacturing a year ago.


Garbage in, garbage out – the holy grail of good data

We have been working with suppliers to provide clean invoices and stock flies to our clients for most of our 25 years in business. While most suppliers are a dream to work with, we have some recalcitrants who continue to send their small business customers poorly structured and even wrong data. This poor quality data costs our clients and us money to resolve and there seems to be little will among the suppliers to correct the problems. The challenge we face is whether we become the gatekeeper – the barrier to these non-compliant suppliers delivering bad data to their clients. This is an invidious position and one we would not accept gladly. The worst supplier is one owned, in part, by the small businesses it supplies – you’d think they would know better. Maybe it is time for small business to be tough like big business on EDI data – if it is not clean the products do not go on the shelves and the bills are not paid until the data is corrected.


Loyalty marketing works for small business

I received my FlyBys statement over the weekend and compared how Coles Myer rewards me compared to people who use the loyalty software in the Point of Sale system developed by my company. Since we launched our loyalty software we have seen the most common loyalty reward priced at 2% of revenue. Some stores, offering higher priced items, provide a reward equal to 10%. Small businesses are using the tools to drive sales. Their view is that this will only happen if the reward is genuine. They are smart in the mechanics they use and how they communicate the offering to the customer. Employees are trained to use the loyalty program to drive sales. Direct mail is used to remind customers of how close they are to rewards. Across at Coles Myer the ‘reward’ is less than half of one percent. There is no personal across the counter connect. The statement and accompanying advertising material probably costs more than the rewards themselves. Yet their advertising would have you believe that FlyBys offers exceptional value.

This is an opportunity for small business. Develop a structured loyalty program, engage all employees, support the program with the right technology and remind customers at every opportunity of the value.

In my own retail business we have been using a loyalty program for eighteen months and the resu7lts are exceptional. Sales in the particular category are showing four times the industry average. For our part we have been able to use out knowledge from the technology to drive basket size and thereby increase customer efficiency for the business. Along the way we have been able to win back some customers from Coles and Big W.

The key with any loyalty program is that you reward for above average behavior.


Shame shame shame Qantas and Australia Post

It is disappointing to read in The Australian that Qantas owned Jetstar and the government owned Australia Post are pursuing the sale of Jetstar tickets in Australia Post outlets. Once again the government is demonstrating its commitment to small business by allowing the retail network and brand it owns to take business from small business travel agents while at the same time making a cabinet decision which protects Qantas on the Austral8ia – US route. Consumers are getting done over on price thanks to one decision and small business is being shafted by the other decision. So much for small business support.


Plastic bags in Ireland

They’re tough in Ireland on the issue of plastic bags. This story in the Irish Examiner reports a 3,000 Euro fine if businesses do not charge the mandatory 15 cent levy on plastic bags. While big business has led the way on reduction in plastic bag use in retail here and received kudos in the media and groups like Planet Ark, small businesses like newsagents have a good, but unsung, track record. It’s easier for a Bunnings to impose a fee for plastic bags than an independent small business newsagent or hardware shop. This is where the Irish approach might help because it makes the issue regulated on the same footing nationally rather than on a store by store basis. It would also stop Planet Ark people getting on TV and radio raving about big business and ignoring the efforts of small business.

From a technology perspective we make it easy for stores using our software to remind employees to NOT automatically provide plastic. We also have the ability to include a message on receipts about plastic.


Woolworths to introduce receipt driven loyalty program

AustraliaIT reports that Woolworths is to trial technology which promotes items based on the contents of a customer’s shopping basket. The Australian says this is “up-selling on steroids”. Woolworths, of course, will charge suppliers to be the product promoted in the up-sell.

We’ve been doing something like this in our software for almost two years – targeting up-sell opportunities based on what is in the shopping basket. But since we’re at the small business end of retail and since our users decide for themselves how such marketing tools are used, there is no group wide or national strategy behind the technology. However, if Woolworths gains traction I’d expect some of our clients would want to get together with us to see if we can aggregate to achieve a better opportunity for them.

I like this idea of reward for the basket purchased as it makes it easier to assess your value to the retailer. FlyBys and similar points programs are close to being a scam with the amount you have to spend before anything truly rewarding is available.

Certainly the media coverage given the Woolworths story has encouraged me to revisit how we promote our point of difference in this area of loyalty.


John Howard, Woolworths and mutual admiration

It was disappointing to see Prime Minister and Woolworths CEO Roger Corbett side by side yesterday and gaining so much media attention. Woolworths is doing more to hurt small business local communities than many other companies. They make price more important than service. Woolworths and their peers, have ripped hundreds of millions of dollars out of newsagents. They have divided communities with their superstores – Maleny QLD, they turn happy people into mechanical drones as they dance through the required customer service steps. They are relentlessly pursuing getting pharmacies into their supermarkets.

The Prime Minister needs to be seen more often in small businesses. His policies need to more often reflect the interests of small businesses. He needs to understand the damage done to communities by giant corporations like Woolworths. When was the last time you heard a local story at a Big W checkout? Probably never. I bet at your local chemist or newsagent you get local stories passed on all the time. This is community building small business style. It’s part of the Australian story. Woolworths is not part of any Australian story.


Is Woolworths a family friendly employer?

In the television advertisements Woolworths want us to believe they are a happy bunch focused on delivering great customer service. I know one Woolworths employee, a single mum with two young children, who works for the Safeway division of Woolworths. her story is not reflected in the TV advertisements. She has asked for single mum friendly hours and has been told that it’s not fair on her co-workers. Her hours are either 5am starts or 9pm finishes. The daytime shift, which allow for school drop off, pick up and evening interaction are, it seems, saved for people other than this single mum. My friend has worked for the company over a couple of stints for more than six years and she continues to be treated appallingly through her roster. My friend suffers as do her children. Her supervisor and management want to know nothing of these things. The only option she has from their perspective is to get a job somewhere else.

Maybe Roger Corbett could find space in his next TV commercial to tell us about their family friendly management policies.


How much do Woolworths and Coles really hurt small business?

Not that much is I read this article by Lindsay Tanner (Labor finance spokesman and federal member for Melbourne), from the Herald Sun last week. Tanner’s position on the big guys getting bigger is not clear. Take this:

For all kinds of reasons, we tend to dislike major retailers like Coles and Safeway. They’re often blamed for killing smaller shops and suburban shopping strips, squeezing suppliers and exploiting workers.

While there’s some truth in such criticisms, they’re often very exaggerated.

Then this:

The big supermarket chains are not charities. They try to get prices low in order to make money. This intense competition benefits the consumer.

Some argue they’ve become too big and powerful. The best test is to look at their profits.

They’re reasonably healthy, but they’re not in the same league as other big companies such as banks.

There’s a huge range of smaller, specialised shops competing with them, often in the same shopping centre.

Be sure to read the whole article for context.

I think Tanner misses a few key points: supermarkets are not transparent – take Coles, their FlyBys loyalty program is not that great, they do not disclose adequately to consumers the value of th spend in terms of points and therefore discount; supermarkets cherry pick against small business – take newsagents, supermarkets choose the top magazines while small business newsagents don’t have the luxury of such a choice; supermarkets pursue profits whereas small businesses connect with the community; supermarkets control economies whereas small businesses support diversity of supply – take vegetables for example, Coles could wipe out a region with one national buying decision. This buying power could turn farmers into the working poor, all in pursuit of profit.

Like Tanner, I shop at Coles. I don’t like that they, through their buying decisions, try and control what I buy. I’d shop elsewhere but it’s not convenient. So I have to live with what they make more profit from or put with the inconvenience of shopping elsewhere.

The High Street Britain 2015 report.released by UK parliamentarians last week was on the right track. It seeks to curb the power of supermarket chains for the good of the economy and for the good of the community.


The high cost of virus terrorism

People who write and release computer viruses are terrorists. The threat which has been widely reported as likely to hit today has caused extraordinary heartache in small businesses even if it only ever is a threat as opposed to actually damaging. The news about the threat has caused people to jump at shadows all day and I am sure that small business software companies around the country have wasted time like we have rescuing people from the shadows. The economic cost of viruses demands that those responsible are jailed for a long time.

Those most at risk from a computer virus are the most vulnerable – individuals and small business. That they are at the coalface of suffering at the hands of these terrorists is appalling. I’d like to see government action so their suffering is not in vain. Tougher legislation, stronger public statements of virus attacks and assistance for businesses attacked.


Book review: How to Feed Friends and Influence People


This is a good book for small business owners. How to Feed Friends and Influence People by Milton Parker and Allyn Freeman is and enjoyable and motivational ride. It’s about the success of the Carnegie Deli in New York.

Sure the book is a bit long winded in parts and you get the key business message in pages 2 and 3. The publishers are kind enough to provide a link to an excerpt at their website which includes pages 2 and 3. (Thanks!) However, the rest of the book provides the foundation to the brilliant strategies presented in pages 2 and 4. Plus other pages have recipes.

I’ve eaten at the deli and can vouch for it’s food and service. Beyond operating a successful deli, the business principles in the book work for anyone.

How to Feed Friends and Influence People is an enjoyable read and highly recommended.


UK small businesses get more OFT support

Good to see the UK Office of Fair Trading pursuing banking justice for small business. Report: Australian small busiinesses could use government agency spport like this.


Why K-Mart, Big W, Harvey Norman and others make price the issue

It’s back to school time and the TV, radio and letterboxes are screaming about deals. It’s price, price and price. The national retail chains are screaming that their deals are the best. It seems that price is the only point of difference Big W, K-Mart, Officeworks, Harvey Norman and others want to pitch. There is little about quality, service and community commitment. These people know their market. Price is an easier sell than service and quality. An ad focusing on price cuts through easier than one focusing on these less tangible benefits. And there is where independent small retailers miss out. Even though they often compete on price they don’t have the budget.

Using our technology we try and help small business compete. We can list savings on receipts; print coupons drawing customers back in; and, run a loyalty campaign more valuable than anything the big boys do.

My point is that small business has the tools to better compete but too often does not use them to their fullest.

Big W, K Mart et al are not cheaper. They are just louder.


Transparency not enough for this small business user

There are some aspects of owning and operating a (relatively) small software company which frustrate me. One is the user who wants it done their way in their time frame regardless of everyone else. We have a situation at present where a user has reported a problem and because we did not publish it as a bug right away he is (publicly) grumpy as all hell. I explained that we have a ‘proof’ obligation for reports of bugs to determine if indeed they are a bug. He wanted this proof process speeded up. We’d had two calls about the problem from more than 1,000 active users running the software on over 3,500 computers. Also, the reports we received were not consistent.

After several tests we were able to recreate the problem – but not exactly as the most vocal user reported to us. In his case his system (not supplied by us) crashed. This caused him to place a higher priority on the problem. In our testing we considered it annoying but certainly no show stopper.

We have advised our users of the problem, noted it as minor and issued a workaround to keep the few who will experience the problem happy until we issue a patch some time next week. It’s in a function of the software used a few times each year and it only occurs if one of the optional parts of the function is used.

None of these comments are written to dilute our obligation to correct bugs. Rather, I am concerned about the considerable time lost responding to the many emails from this one user demanding that we publish it as a bug and even in terms which suit him. What he wanted was not supported by the evidence. When I put that I was told I was not transparent etc etc. Some of this conversation was on our public discussion board which I established more than five years ago. Postings are not moderated. That, alone, demonstrates a level of transparency between my company and its user base.

Some people will never be satisfied. In this case, the bug itself was ot the issue. It was that we did not respond instantly, to the detriment of more pressing work, and that our response was not of a form acceptable to the user.

It’s the kind of interaction, which thankfully happens only occasionally, which makes me not enjoy owning the business.


Left click, right click; what’s a click?

The support call with a new client was like step back into the 1980s when now many small business owners had encountered computers in their businesses. But this call was today. The client on the end of the phone wanted to know what it meant to “click”. There was no “click” button. How could he “click” if there was no “click” button. He said it’s not fair that we ask him to do something he cannot do. It’s a fair point when you think about it – how much, we in the industry, take these additions to our language for granted and how much we expect people to be on our level when it comes to jargon.

Thinking about, it I can understand the caller’s frustration. They have a pretty simple small business. They don’t really need technology but must have it if they are to be acceptable to certain suppliers. So, as the technology provider, we are part of the compliance mechanism and this brings a level of frustration to their contact with us. It would be different if they came to us because they wanted to. Different, too, he this was not their first contact with computers.

It’s calls like these, over the simple matter of clicking the mouse, that force us to pause and consider how we communicate with clients, old and new.


Don’t ask me I only work here

I was at Coles on the weekend and made the mistake of asking how much I had to spend before I could get something free through FlyBys. “you have to go to the website” was the answer, followed by “they don’t tell us that stuff”. Okay, I can understand it might be a bit much detail. Even though I knew the answer I thought I’d compare what a Coles checkout person knows about flybys compared to the loyalty promotion I run in my retail newsagency. (It’s of interest to me because we have just introduced new loyalty facilities in the software we supply newsagents with.) This checkout person was no help. They didn’t have anything at the counter to answer my questions. Even though I spent close to $200.00 I could get no idea of how close I was to getting some value from the spend, some recognition for loyalty.

My point is that retailers have an obligation to be transparent about their loyalty schemes. If they promote rewards they need to disclose the value of rewards earned with each transaction. They also need to ensure that their front line associates can do more to answer a customer query than point one to a website.

I’d prefer to shop elsewhere but Coles is the closest and my sense is that they’ll win more market share by buying competitors out – look at liquor and fuel over the last two years. Consumers have less choice and with that comes worse prices and poor service.

Based on years of poor big business experience and mucking around in my own small retail business, at my software company we’ve created solid transparent facilities in our loyalty software which help independents retailers show the bug players how to deliver honest and transparent customer service.


Sucking on logos – a tasty approach to marketing

I’ve found the ideal corporate promotional gift. All day sucker candy with your logo. Deep inside is a light which lights up when you lick the thing. Yep, I can see my software clients going for that. Hmm… No. I’m just back this morning from a trade show in Hong Kong and boy do they have some wild products – especially in the promotional space. I’m not sure how I feel about someone licking my logo. Violated is a feeling that comes to mind. Ugh. No, I don’t want a prospect or a client linking my logo. And I’m not sure how they would feel about it either. I mean, what if they bit into this sucker and break off a tooth? Or what if they don’t like the taste? Or what if they give it to their kid and they go hyper because of some crazy chemical in this all day sucker. The more I think about this the more I realise it’s a promotional product which should not have left the drawing board. But then people all through the trade show were sucking these things. It was really weird seeing people licking these things and the lights inside blinking. Freaky.

On the other hand, it’s something people would talk about and isn’t that the idea of marketing? No, I think that my POS software requires a more refined outcome focused product giveaway. I’ll pass on the lit all day sucker this time.


No protest over giant mall extension

I am surprised that the announcement of the massive extension to the Chadstone shopping mall remains unchallenged in the press. Besides a couple of stories on December 22 it’s been very quiet yet many small businesses in the eastern suburbs of Melbourne face a significant impact as a result of the development. When I heard the news I expected a wave of protests. Maybe people don’t care or maybe they don’t understand the implications of a giant shopping mall growing by another 50%.


Peter Costello and small business

The weekend newspapers delivered another profile of Prime Minister in waiting, Peter Costello. In a soft interview Costello gets us no closer to what he thinks. Sure there is talk about the abortion pill and gay marriage – topics which appeal to his constituency. But what of other issues, issues which the media does not cover – like small business policy. What does Mr Costello think about small business, and its role in Australia today? On small business Mr Costello could carve out a significant point of difference and move the government from spinning on small business to actually doing something. This also helps employees, suppliers and the government – I’d suggest that small business pays a higher proportion of tax per $1 sale than big business. I could be wrong – it would be worth investigating.

Each day our shopping malls and streets become less individual and more clones. This puts people out of work, stifles creativity and kills off Australian culture.

Mr Costello should get the government active and: determine the real economic, social and environmental impact of big businesses like Coles and Woolworths compared to small business; find out what Australians want (independent or clone) and talk to local government about ways they can stop big business ruining the fabric of local communities.

I’d also suggest an overhaul of government tax breaks and grants for big business compared to small business. There is no sense in providing government incentives to businesses which don’t benefit the community.


Where is the Chadstone protest?

I am surprised at the lack of protect about the plans announced just before Christmas by the State Government that the giant Chadstone shopping centre is to almost double in size. I drove past Chadstone on December 26 and the traffic was so bad that there were police at the lights keeping people under control. There was a list of cars more than a kilometre long queued up to get into Chadstone. The centre already sucks the life out of small centres and high street shops surrounding for many kilometres. Take a look at the satellite image on Google maps and you soon see the size of Chadstone compared to shopping centres within a half hour drive. Making Chadstone bigger is bad for communities and bad for all businesses not in Chadstone.

This is bad planning by the State Government – socially irresponsible.

I hope that small business owerns, residents nearby and other concerned citizens protest.


Chadstone: the tornado which sucks up small business

Tornadoes flatten everything in their path. The new Chadstone shopping centre, already Australia’s largest shopping centre, is to get bigger thanks to a decision by the Victorian State Government on Wednesday this week. The new Chadstone will be a tornado against small business – sucking up sales which would otherwise have gone to small businesses for many kilometers surrounding what will be a monolithic shopping centre.

This giant of a shopping centre will now grow a further 50%.

I feel for the hundreds of high street and centre based small businesses already struggling in suburbs surrounding Chadstone. This new development is an unreasonable and unnecessary challenging to their businesses. The south eastern suburbs of Melbourne are well serviced by shopping centres. There is no need for Chadstone to become a giant killer. Being the biggest in Australia ought to be enough.

The State Government has a social responsibility to the small businesses which will be affected and the knock on effect for families of owners and employees. Sure the new Chadstone will create jobs but what about the loss of the local business, the place where suburbs gain and pass on their character? This will be lost forever. Socially, this decision stinks. Mall shopping is, well, mall shopping. It’s not the same as poking around the independent retailers in high street, learning the unique qualities of a suburb. Such adventures are to be cherished and not abandoned as the Victorian State Government has done.

This is a bad decision and one the government ought to reconsider.

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