If you’re an agent calling on restaurants, chances are you’ve found more than one prospect running an integrated software solution like Toast. However, do not despair; your business opportunities in this vertical are not “toast.”
The National Retail Association reports that over 1,000,000 restaurants open their doors every day. They offer hungry consumers plenty of options
- from high-end steakhouses to family buffets,
- from local taverns to neighborhood sandwich shops.
Just like the customers who dine on their food, restaurant owners have plenty of options when selecting technology to support their businesses. Toast is just one of those options. It counts 48,000 restaurants as clients, according to paperwork the company filed for its initial public offering, in the fall of 2021. That’s less than 5% of the total market.
In other words, the restaurant vertical remains a wide-open opportunity for merchant services providers. In fact, there are probably a million opportunities to sell restaurants POS systems.
Restaurants have always operated on thin margins. But these days they face the triple whammy of rising costs, supply chain disruptions, and labor shortages. POS systems are really hot because they address these pain points by automating and integrating on a single platform critical business processes that support both the front and the back of the house.
- From inventory management and order taking, to payment and loyalty.
- From marketing support and CRM to sales reports and personnel management.
Toast recognized early that the systems and processes driving restaurant growth were in need of a full reboot to meet changing customer and business demand. And it has received a lot of attention in the press, especially because of its IPO. Toast has also received a lot of attention from our industry because restaurants using the Toast platform are locked into using Toast’s proprietary hardware and payment processing service.
Toast is not unique among integrated software providers in wanting to tap into the residual opportunities from credit and debit card processing. Neither is it unique in offering integrated POS solutions for restaurants. The point of sale market is saturated with companies like Toast that spend a lot of money on customer acquisition and recoup those costs by owning the payment revenue stream.
Quantic, the sponsor of this Merchant Sales Podcast, offers a processor-agnostic POS system that was developed for restaurants. It is also adaptable to other types of retailers. The platform helps businesses run the full house, from the front to the back, is completely channel/reseller driven, and can be white labeled.
Foundationally, all POS systems are basically the same. However, things get tricky in addressing the specific needs of specific verticals. If you want to compete with Toast and sell a POS solution to restaurants, you need a solution that addresses the unique needs of restaurants:
- SMS marketing,
- contactless ordering,
- in-house and take out dining experiences.
“Quantic is well configured for the things restaurants and small businesses need, like inventory management, detailed reporting, SMS marketing, and other things that create a true omnichannel experience,” explains Vigyan (V) Kaushik, Quantic’s CEO.
Re-imagining Capital Allocation
V and his wife, software developers by training, developed Quantic in response to their own needs as restaurant owners. “We tried some cloud-based POS systems but didn’t have much luck,” Vee told me.
Software wasn’t the only problem. “Every time we migrated to new POS software, we also had to change hardware. This became very expensive,” V said. Quantic is an iOS and Android-based multi-channel solution that won’t break the bank. Peripheral hardware like kitchen and receipt printers, cash drawers, and card terminals can be easily integrated.
Successfully selling POS systems to restaurants and other businesses requires a change in mindset. ISOs and agents need to re-imagine capital allocation if they are serious about selling POS systems. The necessary hardware investments can seem overwhelming to merchants, and agents, too. The lifetime value of one of these accounts, however, often dwarfs the investments.
You need to be creative to get these types of deals done. Re-imagine capital allocation.
The market for POS systems was just beginning to heat up when I was selling card processing services, as was the trend toward free terminal placement. I wanted to make POS systems affordable to merchants but lacked the capital needed to offer the necessary hardware and software. So, I approached my ISO and requested a loan. Then I could purchase the hardware and place it with merchants for free. The response was immediate and positive. Loan payments were deducted from my residual stream, which didn’t hurt me financially since I was able to write more deals and turbo charge my residual stream.
“When we ran a restaurant, we were always dealing with cash flow issues. Any offer we received to get something free from a vendor piqued our interest,” V said.
Addressing Opportunity Costs
An ISO/agent selling POS systems to restaurants has advantages to offer that Toast cannot match.
- You are a local business offering a local touch, not a nationwide behemoth.
- You can offer attractive processing fees.
- Toast doesn’t publish its processing fees. However, because it’s a third-party or PayFac, much like Square or PayPal, they are certainly charging significant markups.
- You can easily undercut those markups.
When you work with a company like Quantic, you control the relationship, not the technology provider. You can even put your own brand name on the technology. Plus, you control pricing. You can decide to give away the software and recoup costs on the back end. You can offer white glove, installation support, or handle things remotely.
The key to success, as with most merchants, is understanding the restaurant’s pain points and delivering technology solutions that are easy to implement and use.
Restaurants can be large and profitable accounts. POS systems totally change the way restaurant owners run their business and generate more profitable. They can help:
- Boost restaurant sales with table-side, mobile, and online ordering support. Some restaurants report sales increases as high as 30% when implementing an omnichannel POS system.
- Enhance the customer experience by improving workflows and simplifying the transaction process.
- Inform better business decisions with detailed and sophisticated analytics. Because a restaurant POS system is cloud-based, owners/managers can better monitor inventory, adjust pricing, and make quick decisions from anywhere with an internet connection.
ISOs and agents selling POS systems benefit from:
- The ability to offer restaurants more than just another way to accept payments. When selling a POS system, you’re offering a business management tool.
- Revenue improvements. Not only are there subscription fees, but average tickets tend to be higher at restaurants with POS systems.
- Improved retention. Merchants that install POS systems to help them better manage their businesses in the front and the back of the house, are less likely to switch to other providers, even those offering lower fees.
Some merchant sales reps are hesitant to sell POS systems because of the complexity and time required to get merchants up and running on the technology. There are many moving pieces, and the opportunity costs can seem significant. After all, if you’re good at sales, your time is better spent selling than dealing with technology configurations. Working with a software vendor like Quantic allows you to leave the nitty gritty of onboarding to the experts.
“We can handle onboarding on behalf of our partners,” says V. Quantic also has partnered with Boomtown, the customer experience management company, for onsite customer support when needed.
Competing with Toast: The Quantic Approach
Quantic is an iOS and Android-based omnichannel POS platform that allows restaurant owners to manage their complex businesses more efficiently and effectively. And, unlike Toast, Quantic is sold only through resellers. As an ISO/agent selling Quantic, you control the relationship, the pricing, and the billing. Your clients interact with Quantic as much or as little as you choose.
As we all know, Covid hit restaurants hard. To survive, restaurants had to employ new ways to attract and serve customers, while streamlining and automating workflows. The old way of running restaurants – relying on paper order tickets and cash registers, just doesn’t work well anymore.
With a Quantic POS system, restaurants benefit from:
- State-of-the-art technology priced so even the smallest restaurants can afford to implement it.
- Quick and easy checkouts.
- Integrated loyalty programs used to encourage diners to return often.
- Detailed analytics with live cloud reporting. They can gather data from every transaction to support marketing and daily reporting needs.
- Offline modes that continue operations even when power or the internet are down.
Quantic POS checks all these boxes for ISOs interested in selling POS systems to restaurants. Quantic offers an affordable solution that can be private labeled. With over 1,000,000 establishments, the restaurant sector represents a huge opportunity for ISOs and agents.
The Toast POS solution today is used by just a small fraction of the market – about 5%. Isn’t it time you began offering POS systems to the other 95% of the market?
Contact Quantic to see how they can help or email email@example.com.