POS systems have advanced considerably from their initial traditional version. These advancements have made it easier to run businesses. These innovations in POS software have led to cost and time savings for retailers. When this system is integrated with a CRM it results in synergies in sales and marketing strategies for businesses.
The most basic definition of a POS is a combination of hardware and software that processes the payments a customer makes for a company’s product or service. Irrespective of the retail channel every time a customer pays for a product they do so via a POS.
The hardware for a POS includes a laptop or desktop, a bar code scanner, a card reader, and a receipt printer. The software can be installed on the system drive or be available via cloud-based storage depending on the POS system provider you have chosen.
The majority of the POS systems available for businesses come integrated with a CRM as well.
What is a CRM?
A Customer Relationship Management system is equipped with helping businesses manage data pertaining to their customers and their buying patterns over a period of time.
This data helps the marketing, sales, business development, and customer service departments to manage customer relations and develop data-driven strategies for their target market. A CRM is a centralized storage platform that is either on specific hardware or cloud-based. It contains data for existing and potential customers that can be used to develop tailored marketing plans, sales strategies to remain competitive and track their customers’ buying behaviors.
This eliminates the need for manual effort for recording data related to customer purchases, generation of sales reports, and periodic updates about buying patterns. Salesforce, SugarCRM, and Magento are some of the well-known CRM systems available for businesses.
The integration of POS and CRM allows businesses to directly use data from their POS to formulate strategies that deliver superior customer experiences.
How does POS and CRM integration work?
A POS system that has built-in CRM is centralized storage for information pertaining to sales, inventory, and customer management. The automated storage of the data is accessible by the users of CRM and it helps them in developing strategies for the growth of the business by delivering a superior customer experience. Some of the features that come with a CRM enabled POS includes:
- Automated storage and management of the customer database. This would include details like customer name, their purchases, contact number, email address, and postal address.
- Tracking leads to potential customers from the time the initial contact was made to actual conversion in the form of purchase from your retail outlet.
- Tracking of buying behavior of customers over a period of time and evaluating any changes if present. This helps business owners point out factors specific to their own business (poor service quality) or competition (cheaper prices) that might have led to the change in customer behavior.
- Using the existing data to forecast future sales trends and required inventory to meet the demand.
- Organizing the customer database by segregation into groups and sub-groups based on certain common characteristics.
- Integrating marketing plans by executing SMS campaigns, email marketing, and social media marketing via the CRM system.
- Allows real-time tracking of products sold, current inventory level, and when a particular product needs to be reordered. This saves a lot of time as compared to when the same process is done manually and prevents overstocking/understocking of products.
- Makes share files across different departments and geographical regions a lot easier.
- Keeping a consistent record of customer feedback and reviewing it over time.
Benefits of POS and CRM integration
The synergy effect resultant from POS and CRM integration leads to the following benefits for the business:
- Fast-paced access to information: The global business environment is dynamic and highly competitive. As a business owner, you can no longer take time to respond to a competitor’s marketing strategy or to execute a situational promotional strategy. Manual data is not only time-consuming but also hinders your competitive position and response rate in the market. This problem is solved by having a POS and CRM integration since you can access real-time data at the click of a button anywhere in the world with an internet-connected device.
- Improved customer service leading to a higher revenue stream: Due to the integration of these systems you will be able to evaluate what the customers like in your product portfolio, what is low in demand, and what service improvements would they like. A business’s ability to tailor their marketing campaigns to their customer base, offering product promotions based on existing buying patterns, and even targeting a certain customer group with a product of their liking leads to higher customer satisfaction levels. This translates into a higher rate of customer retention and increases in sales.
- Better interdepartmental coordination: A POS – CRM integration allows departments to have direct access to data relevant to their function. Since they no longer have to wait for another department to prepare and share data, it saves time and margin for error. Furthermore, since all the data is updated in real-time it improves coordination among the departments as well.
The presence of the POS system has been adopted by a majority of businesses across the world. The ongoing rise in CRM-enabled POS being used by businesses has changed the competitive dynamic of the market. Any business that wishes to remain competitive must incorporate this system into their day-to-day working.
While this may not appear to be a necessity for many businesses today, it will soon become an indispensable tool for all business owners. A CRM-enabled POS is definitely more pricey than a simple POS system. However, this financial cost breeds multiple benefits for the business in terms of better customer experience, higher revenue, and hassle-free inventory management.