5 Metrics Your POS System Can Provide
Your POS system is more than just a payment processing tool. It can measure specific metrics of your business that are vital for proper analysis and business growth. These metrics can help identify problem areas, help you think of creative solutions or changes, and give you a sense of security in your own management style. Here are five metrics your POS system can provide.
1. Sales Revenue/Profit Margin
One of the most important metrics you’ll measure for your business is your sales revenue. How much product are you moving per month? What’s your net? Your gross? Are you staying above water, or drowning in debt and expenses? Are your sales enough to cover your expenses? Are you losing customers?
Sales numbers can speak volumes on more than just money. When you know how much you’re making each month, you can determine how effective your marketing efforts are, how your sales team is performing, and what items are actually turning a profit.
Once you’ve narrowed down your bestsellers, you can focus more resources on their promotion and thus drive more customers into your store. Likewise, you’ll be able to identify those items that aren’t selling, and thus allocate resources away from them (unless you’re determined to transform them into bestsellers).
Never underestimate the power of a good sales report. It is perhaps one of the greatest tools your business will have at its disposal, and with many modern POS systems, it’s already included with the software. Faster, more secure checkouts, as well as customized sales reports? We think that’s a pretty good deal.
2. Lifetime Value of a Customer
The lifetime value of a customer is an incredibly impactful metric to your business; it lets you know what your customers’ value is, how well your marketing efforts are reaching them, and how likely they are to be lifetime customers.
Customers are fickle in nature; it can take only one poor experience with your brand to turn them away to the competition. That’s why it’s so vital to the modern business to put extreme effort into customer service because it can make or break a potential lifetime relationship with a customer.
POS systems allow you to create customer profiles, which will not only contain personal information on your customers but will act as a tracking system for their purchases. You’ll be able to see exactly what your customers are purchasing and when directly from the terminal, as well as when (and if) your customers are cashing in promotional coupons or mentioning promotional codes.
Your goal should be to create loyalty among every customer that comes through your doors. While this may seem unrealistic, it’s the attitude that makes the difference. You won’t foster loyalty among every single customer you ever come across, but that doesn’t mean you shouldn’t give it your all and try anyway.
This attitude of success and determination will set you apart from the competition and put you in a league of your own when it comes to customer service.
3. Sales Growth
You’ll want to know whether or not your business has grown in the last six months, to a year, to two years, or however far back in time you wish to go. This metric shows you if you’re attracting new customers if your marketing efforts are successful, and whether or not your brand awareness is increasing.
Sales growth can be determined by analyzing sales reports, and with many POS systems, you can customize a timeline from which you can view your sales numbers. Whether you want to see last month’s or last year’s sales numbers, the charts will be saved within your POS software for viewing at any time.
4. Customer Loyalty and Retention
Along with calculating the lifetime value of a customer, your POS system can help you determine how loyal those customers are to your brand. With those same customer profiles you’ve created for the purpose of tracking sales and storing personal information, you can track how often your customers shop with you.
From there, you can introduce loyalty programs or special promotions for customers who shop the most at your store. Knowing who is loyal to your store can help you identify what makes them that way, granting you further insight into making this so for the rest of your customer base.
You’ll also be able to pinpoint when customers stop shopping with you and identify possible causation during that time period that may have convinced your customers to discontinue their business. Perhaps you moved or had a brand name change or some other factor that caused customers to disengage.
5. Your Goals for the Business
Perhaps you have a sales or growth goal you wish to reach within a certain time frame, or you want to achieve a certain number of leads per month. A POS system can provide information on all of these things, with detailed graphs on sales and business growth, new customers, and more.
While a goal isn’t exactly an official metric, it’s certainly one that you must keep in mind as a business owner. Improving on a daily basis not only promotes business growth and brand awareness, but it can increase your own personal sense of self-worth. You’re doing something great by providing a service to your customers, and you should be proud of your goals!
POS systems are powerhouses for tracking metrics and helping business owners make tough decisions. Pay close attention to your POS system’s extra tools; don’t let it become simply a payment processing tool. Use it for better marketing, increasing sales, and raising brand awareness.