Tech 2 Success

Even if you aren’t looking to sell your OCS business, adding value should always be a strategic goal as it appeals to both customers and potential investors. The creation of value is the driving force behind any exchange. Everyone needs to get something out of the deal. For your customers, it’s convenience and products that help improve their employee experiences. For potential investors, they’re mainly looking at the financial performance of your company (revenue, costs, assets, etc.). But an area that’s often overlooked is technology.

The systems you use impacts different areas of your business, including operations, positioning, scalability, and client and employee experiences. Managing an OCS business is complex. Having the right tools makes your business easier to run and keeps you competitive, which increases value.

But what technology is important? In what context do you need to consider technology? Here are the different ways and areas that technology can impact the value of your business.

Infrastructure (IT)

If your IT infrastructure is reliable, secure, and flexible, it can help you meet your business goals and maintain a competitive edge in your market. It helps make sharing important information across your operations easy, which saves your team time and customers headache. Alternatively, IT systems that aren’t up to par can cause issues with connectivity, security, and operations.

Security

Securing important information needs to be a top priority. With cyber threats on the rise, the mishandling of sensitive information is cause for consternation among potential investors. Not to mention serious consequences for yourself and your customers.

Processes & Automation

Managing routes, customer orders, employees, and everything else that goes into your operations is a logistical juggling act. It takes strong processes to keep the operation running smoothly. Are there systems in place that help automate tasks? Has the strategic use of technology helped increase profit?

Scalability

The things you do now prepare you for the future. Likewise, what you aren’t doing impacts things down the road. Technology makes your OCS business more scalable, which in turn makes you more attractive to potential buyers. Oh, and helps streamline current operations which makes for a better customer experience.

You might not be even close to thinking about selling your business. Maybe you don’t plan to at all. But it’s beneficial to always be focused on increasing business value. The use of technology is one way to do that, and it’s an area that will become increasingly important to convenience service operators.

Last week, we attended vending market watch’s webinar “State of the Vending & micro market industry report.” The discussion, moderated by industry veteran Bob Tullio, covered many topics ranging from trends in the workplace to the latest industry sales data to technology. 

A lot of good points and insights were shared during the conversation. Perhaps the biggest takeaway was this: the future is looking brighter for operators. There’s still progress to make as far as recovering from the pandemic goes, but the idea that things are trending in the right direction was a sentiment shared amongst the panel of experts. That’s great news.

But there’s a caveat here: even though the future looks good, much of the growth operators can experience will also be, in part, contingent upon the adoptance of technology.

Vending, for instance, was largely reliant upon hard cash for many years, Nick Montano pointed out. But after the pandemic, operators don’t seem to want to handle cash as much anymore. As a result, adopting cashless technology and tools provided by companies like Cantaloupe and Nayax will be important to future growth for operators. 

When asked by Mr. Tullio, “Do you think technology can level the playing field for a small to medium sized operator?,” Pete Carmain of Nayax responded by saying: “Absolutely, yes…[technology] is closing that gap by making the small-medium size guy competitive.” 

At the core of Mr. Carmain’s point is that technology brings efficiency to operations, which allows operators to compete at levels they couldn’t or struggled with before.

The conversation eventually turned to the topic of industry consolidation and the factors that impact it. Part of it is a generational shift. The children of a lot of “mom and pop” operators don’t have the desire to maintain the business long term. Another factor centers around the use of technology. For those entering the industry, they’re younger and more tech savvy and are eager to use technology as new solutions for growth.

This growing theme about the reliance on technology as not just a “nice to have,” but as a necessary component to growth focuses on a universal truth: change is constant. For years, the industry lagged behind others in regards to the use of technology. But moving forward, operators serious about growing their business will need to consider how technology can help with their goals.

Managing customer orders is hard work. There’s no doubt about it. What OCS operators have to do on a daily basis is nothing short of logistical magic. This includes receiving and processing orders, managing routes, and navigating last-minute issues that impact many areas of the business. (Broken down truck anyone?)

That’s why efficiency is a key element to your success as an OCS operator. Without it, operations can quickly spiral out of control, leaving your team scrambling and your customers waiting…

And waiting some more.

But what is efficiency in today’s world? As new technology is developed, what was once a convenient way to conduct business is increasingly becoming the old way. What was efficient fifteen or even ten years ago is hardly so now. Consider the use of email.

While email is still an incredible tool for communicating, inboxes have become so bloated that they present a major challenge to grapple with. A quick search online offers 300+ million results for how to manage email effectively:

Clearly, managing email is a sore spot for people. Many of whom are your customers. This is why managing their orders through (sometimes lengthy) email chains is problematic. Here are three specific reasons why…

Email is time-consuming

Let’s face it: processing emails is tedious work. But after doing things a certain way for so long, it’s sometimes hard to see the pitfalls. “It’s just the way we do things” is a common response. But that’s what people were saying when email first became a tool for businesses years ago.

To be clear, email still serves a critical purpose for any business. But using it for certain activities like taking orders requires too much time in today’s world. People crave convenience.

Think through a typical email order. The customer sends their request. It sits in somebody’s inbox for a little while (sometimes maybe too long). That person reads the message, realizes one of the items requested is out of stock. They reply to the customer to inform them and await the response. Maybe it’s within minutes, maybe it takes hours. Who knows?! But it finally comes through and the order is then manually keyed into a VMS to be processed. Multiply this by dozens of times a day and…

Well, that’s a lot of time.

Now think about it from your customer’s perspective.

They have meetings to attend. Deadlines to meet. And a whole slew of problems to fix. In other words, they’re busy. Today’s business buyer needs quick solutions that simplify their workload. The back and forth messages leave an open loop in their tasks and eat up precious time throughout their day.

Email is prone to errors

Typos and miscommunication are two of the biggest problems in any email communication. Think about how they can impact the way an operator manages orders.

When you get some customers writing that they want “that chocolate thing we ordered last time,” it’s easy to misunderstand or confuse it with another customer, then end up delivering the wrong item. Or, at best, you’ll have to search through their last order to confirm what that item was. Which, again, is time-consuming.

And if a customer accidentally typed the wrong amount of a product, they’re not going to end up with what they expected. Maybe they’ll get a lot more. Maybe a lot less.

An honest mistake on their part, no doubt. But it’s still a frustrating experience. Over time, there can be some pretty significant financial problems for them and you.

Lack of data insights

Without knowing what products your customers are buying, how can you effectively sell and offer them the value they’re seeking? This is another area where email falls short as a system for managing customer orders.

Sure, it’s possible to sift through all the messages and other systems to find what you’re looking for. But that’s a major project in and of itself.

The businesses that are winning now are the ones that understand their customers. Managing orders through email just isn’t an effective tool for providing you with the necessary insights that can impact important decisions for your growth.

Final Thoughts

Email is a critical communication tool. But today, it falls flat as a reliable tool to manage customer orders at scale. It causes delays in the order process and creates a chaotic experience for both customers and your team. As an operator, do you want to create that kind of experience for customers and employees?

Up until March of 2020, the relationships that OCS operators built with customers were mainly done through routine face-to-face interactions: regular visits from drivers and sales reps to key accounts to make sure needs were being met and exceeded. But once everything shut down due to Covid, many operators struggled to maintain some of those relationships. After all, what’s there to even do when your customers close their doors? A lot, actually.

It sounds counterintuitive, but staying top of mind when your customers don’t need your service helps in the long run. Eventually, once they are ready for what you offer, you’ll be one of the first companies they contact. This is what sales and marketing pros call mindshare, and leveraging online tools and mediums can do the trick.

While in-person meetings will always be the core of building strong relationships with your customers, reinforcing them through digital channels remains an important aspect of serving them well–a big lesson learned in the last two years. Using the right tools and technology effectively can reinforce the face-to-face relationships you’ve built over the years with your customers, and thus better serve their needs.

Out of sight, top of mind

When the pandemic first hit, and some of your best accounts suddenly shuffled employees to a remote working policy, were you in a position to routinely communicate with them? 

Outside of direct phone calls and emails, were you able to reinforce the value of your service and stay top of mind so when the office did reopen, you were right there and ready to pick up where things left off?

Your answer to these questions may be yes, but a lot of operators started to go weeks even months between communicating with some of their customers. 

Across many industries, companies that maintained a strong online presence using social media, their website, and email marketing were able to stay in front of their customers on a regular basis. These efforts helped them stay top of mind so when offices did reopen, and the need for their service arose, they were the ones who got the phone call. 

Improve brand and customer experience

Brand. Customer experience. Blah blah blah. What is this, a college course?

On the surface, these terms might just sound like marketing speak that large, multi-national companies like Apple or Nike, who have amassed millions of customers and fans, need to worry about. So what do these ideas have to do with you? Let’s go beyond just the words for a minute. 

Every company, large or small, has a certain personality to it. The way employees talk to their customers. The speed at which problems are resolved. The feeling customers get when doing business with a company. All these experiences add up in the customer’s mind and create a certain perception. That perception, which manifests itself as reputation, is your brand. In short, the term brand doesn’t just refer to your logo and the colors on your website and creative ad campaigns. Brand is your company’s personality.

As for customer experience, this relates to the specific touchpoints your customers have when doing business with you. How they order products from you, for example, creates a certain kind of customer experience. Is that a good experience or bad one, fraught with friction, frustrations, and time-consuming tasks? Your customers will decide.

It’s in every operator’s best interest then to take their brand and customer experiences seriously. Using digital forms of communication can build and improve the perception of your company, and foster positive relationships through specific experiences. Staying in touch with customers via email, promoting products and sharing insightful or entertaining content on social channels, and writing interesting articles that speak to your customers’ needs or problems go a very long way in building relationships with them.

Where to start

When it comes to executing on this, where do you begin? The tools and platforms are many, but here are some top ways to build and maintain digital relationships with your customers.

Email

An email list is like the holy grail for business owners. It allows you to communicate directly with your customers and prospects in a way that is more intimate than a shotgun approach like social media.

Social Media

Does this make social media useless? Not at all. It’s an easy way for you to continuously show up in front of your customers and remind them of the value you bring. Use it to promote certain products or create simple messages you know your customers will appreciate. 

Website

This is the core of your digital relationship building, especially if you use online ordering. Getting people to your website increases the chances of them seeing everything you have to offer and helps create the desire for those products and services.

Online Ordering

As mentioned above, how your customers order from you creates an experience for them. Simple plain text emails and spreadsheets can work fine, but an online ordering platform presents a huge opportunity to give customers an experience when you’re not physically present. It’s also very convenient for customers, which makes for a great experience.

Final thoughts

It’s important to be realistic about how you approach this. No, you’re not Coca-Cola with a marketing team of hundreds and a budget of millions. So don’t set your goals and expectations too high. But rest assured that small, local businesses across the country and the world use these very tactics and channels to maintain and build great relationships with their customers, which in turn helps reel in more business.

Early into the Covid-19 pandemic, when operators were scrambling to figure out how to proceed (if they could at all) in this brand new environment, there were a handful that had the ability to try and meet the changing landscape head-on. These were the operators who had already implemented e-commerce platforms long before the pandemic began. They saw an opportunity to try and accommodate for the new normal sprung upon the industry overnight: home delivery-style operations.

Their ability to make quick changes generated some buzz, leading others to wonder if they should follow suit. Amidst one of the most difficult times the industry has faced, an online ordering system enabled some operators to serve customers in an entirely new way, and on a near moments notice.

Early reports of these swift changes were regarded as pivoting. But it’s more than that: e-commerce is a preparation of where the industry as a whole is heading. As Bob Tullio, industry veteran recently said in this article, “the most successful operators are the ones who will be fully prepared for what is coming next.” 

What’s coming next is a natural progression of adding e-commerce as an additional way for customers to purchase products from you.

Driven by Consumer Demand

When most people think of e-commerce, they conjure up images of Etsy pages and Shopify stores selling anything from jewelry to handmade picture frames. A lot of operators shunned the concept for a long time. “We’re not Amazon,” they’d say. But there’s a growing trend of B2B buyers using e-commerce as a way to purchase a variety of products and services for their businesses.

According to Forrester, B2B e-commerce transactions are on track to hit $1.2 trillion by 2023. It should come as no surprise that millennials are perhaps the biggest reason for this trend. Their age range of about 25 – 40 years old means they’ve come to understand and navigate the world largely through digital experiences. Give it another decade and their successors, Gen Z, who’ve grown up without any experience of a pre-internet world, will be in positions to make business decisions themselves.

The pandemic has amplified this trend. With so many people working from home and many cities and states enacting stay-at-home orders, e-commerce skyrocketed, especially in grocery sales. According to Supermarket News, there could be an increase of 40% in sales this year.

While consumers will likely go back to in-store shopping as things get back to normal (or as normal as they can be), the ease with which they can purchase necessities online will remain. In other words, e-commerce is expected to remain a channel that operators can use to reach customers and sell more products. 

In NAMA’s recent webinar “Expanding Delivery Services with an Integrated E-commerce Platform,” our co-founder Aja Pascale discussed how operators can benefit from this omnichannel approach and meet customers where they already are–online. 

Primed for Growth

Providing a way for your customers to buy from you online paves the way for growth. As Mike Brown, President of PGI Services said on the panel in the webinar, “the highest opportunity to grow is through OCS and Pantry customers.”

As the industry has seen for some time now, grab-n-go and employer-paid refreshments have been trending upward. The pandemic has obviously thrown a wrench into this growth, but it’s not going to disappear. In fact, an online ordering option is poised to be even more appealing as a result. Once offices begin to reopen and allow staff back, there will be a real demand for touchless options. Ecommerce is a perfect solution. 

In this way, operators who implement an e-commerce solution can use it to their competitive advantage to stay relevant in the marketplace. Customers are already shopping online. An e-commerce platform helps you meet them there.

Preparing, Not Pivoting

Consumer trends, accelerated by the pandemic, will impact the industry in a post-covid world in a way that can bring a ton of opportunities and growth. How operators respond will be a deciding factor in their success.

So much of an OCS operator’s success depends on face-to-face communication. The initial sales meeting, routine deliveries, and even the occasional repair call offer ample opportunity to connect with customers and prospects. It’s during these interactions relationships with customers are built, and thus your company. 

What happens, then, when those interactions are swept away from underneath you in the blink of an eye? How do you maintain existing relationships? How do you foster new ones?

The current situation has no doubt presented challenges the industry has yet to see. Fortunately, we live in an era where you can continue to build relationships without being physically present. 

By leveraging the use of the internet, you can still work to build your company and its reputation. 

3 ways to connect with your customers online

Connecting with customers goes beyond simple transactions. It’s more than an exchange of names, phone numbers, and money. It’s about providing value.

To truly connect with a customer means the difference between them passively using your service and being active fans of your company. The former leaves you with no leverage on your competition, while the latter creates customers who rave about your business, which often leads to more customers.

Connecting in this way builds the kind of long-term relationship you need for success. Here’s how you can do it online.

1. Leverage Your Website

The days of flipping through the Yellow Pages have long since been over. Most people, as in 88%, now go online when searching for products and services. 

What does this mean for you?

As a service-based business, your website is essentially a digital store. It’s where visitors can go, look around, and decide what they think of your company. If your website is not inviting or does not provide the necessary information for customers to decide whether or not to engage your sales team, you’ve lost them already.

To connect with customers in a meaningful way, your website needs to be easy to navigate and provide information they find valuable. The best (and easiest) way to do this is through content. 

Having a company blog where you can talk about your company, touch on topics of *their* interest, and discuss news or trends in the industry creates a dialogue between you and your customers. This dialogue is essential to connecting with customers in a way that builds a lasting relationship in a digital environment.

2. Get Social

Social media is perfect for building relationships with your customers. Beyond keeping in touch with friends and family, it’s really what platforms like Facebook, Instagram, and Twitter are designed for. The key, however, is to provide content that your target audience finds valuable, and provide it consistently.

Here are four ways to provide value on social media:

• Educate
• Inform
• Motivate
• Entertain 

Create a strategy where your content touches on all or a variety of these pillars (and not just for promoting your service), and you’ll be able to connect with customers better.

3. Email

Having your customers’ email addresses means you have direct access to their inbox. Not literally, of course. But email provides you with a way to connect on a more personal level. 

Like social media, email marketing is not only for promotional content. Done correctly, you can foster relationships with your customers that helps turn them into raving fans because what makes email unique and effective for connecting with them is the ability to personalize messages. Tools like Mailchimp make it easy to address everyone by name, giving your emails a personal touch.

Doing this helps prevent your emails from sounding like a generic message that everyone knows was sent en masse.

But even better, you can analyze the data you have about each customer and segment your list. For example, if you have many customers that like a certain product–let’s say flavored creamers–you can create emails that are tailor-made just for them, and keep them up-to-date on new flavors they might like, or maybe recipes of all kinds that they can use in different ways. 

Providing valuable information in this way helps build trust in your company and creates better connections.

Conclusion

It’s a different world right now. It might seem like there’s no end, but as Bob Tullio recently said, it’s temporary. While you’re not able to interact with customers as much face-to-face, taking advantage of digital communications and amplifying your value will help you come out the other side stronger.

Factors affecting operations might be out of your control right now, but you can still shape how you adapt and prepare your business for when things start to pick up again, all while keeping employees and customers safe and healthy. This was the main theme of NAMA’S “Pivoting for Success” webinar we recently attended.

The event, hosted by industry experts, was held in response to the new environment that operators are facing due to the pandemic. The speakers included:

• Vivian Robillard – VP of Food Service Sales, Pepsico
• Lance Whorton – President/CEO, Imperial
• Niki Morton – Executive VP, Casco Bay Food & Beverage
• Jeff Smith – Chairman/CEO, All Star Services, Inc.

They covered everything from equipment to handling products to how you can gain back the trust of your customers. Here are the key points discussed for each topic.

Equipment

COVID-19 has had a real psychological impact on consumers regarding how they interact with the world. This includes vending and OCS equipment. There’s a real fear of touching surfaces that dozens or even hundreds of other people are touching. Going forward, touchless payment options will play an important role in the industry.

Additionally, monitoring equipment remotely can be significantly helpful as it limits the amount of visits drivers and technicians make to locations. Operators who do not currently have software to do this should seriously consider using a platform to help avoid unnecessary visits to customer locations. 

Properly sanitizing equipment will be an important procedure. Ensure all vending machines, coffee machines, and snack machines are thoroughly cleaned both at customer accounts and while sitting in your warehouse.

Facilities and Fleets

How you manage your facilities and fleets will also need to change. Repurposing assets to accommodate new opportunities will be a competitive advantage. 

With so many people working from home now, some operators have begun pursuing home delivery. It’s hard to say how long that will continue, but there are a lot of companies (across all industries) talking about keeping it that way. Or at least creating a hybrid work environment.

As for the health and safety of your employees, procedures for managing your warehouse(s) and office space have to be different, too. Monitoring temperatures daily, wearing masks and gloves, rigorous and frequent cleaning… these will become regular occurrences for the foreseeable future.

Products

Offering new items like PPE products such as gloves and masks will be an area to explore. Selling these items can be useful for your community while helping make up some loss in sales. NAMA is actively seeking where these products can easily be sourced.

You’ll also need to consider packaging. Items like plasticware and coffee stirrers can’t just be thrown into a big container, so individually packaged items will need to be sourced and sold.

Vending and OCS have always been associated with beverages and snacks. While those will still be core products, offering new items such as PPE products will potentially be an area to explore.

Office and Administration

Right now is a good time to tackle some of those “spring cleaning” projects that you keep pushing off. Nobody wants to just sit around. Take advantage of this time to get things in order and train your staff on proper procedures.

Despite the negative impact COVID-19 has had, there’s still a sliver of hope: a lot of people had to quickly adapt and work with one another in new ways. This adaptability and teamwork is a positive sign that operators, and the industry as a whole, will be able to bounce back from all of this.

Despite the current situation and the impact of COVID-19, there is still reason to be optimistic about the future of vending and OCS. That reason is technology. Software platforms are popping up all over to help make operations more efficient, leading to better customer experiences.

But don’t just take it from us. 

This article makes clear that adding technology to your operations increases value:

“For years and years, there was limited interest from private equity, or what we would traditionally call financial buyers, because our industry was seen as stagnant, capital intensive, and generally lacking any technology to make it more scalable.” – Mike Kelner

There’s some hard truth here. For quite some time, vending machines–and OCS by extension–were pretty much the same as they’d always been. 

While other industries seemed to carry on and progress as new technology became available, not much changed in convenience services. Vending machines remained the same and the coffee in the kitchen remained stale. 

But that’s all changed. New technology of various kinds is now available to operators, providing a variety of solutions: 

• VMS
• Micro-market/kiosk
• Better coffee options
• Mobile payment options
• Online ordering

All these platforms help make operating a convenience service business easier, more efficient, and–as Mike Kelner pointed out–scalable.

This is hugely important for a couple of reasons. First, it makes it more attractive for those private equity firms seeking new investments if and when you might consider selling your business. Second, and perhaps more importantly, the increased value added by scalable technology is better for your succession plans. 

If your intention with your company is to pass it down to a family member, wouldn’t you rather hand them something of value?

What does it mean to ‘scale’ your business?

In short, it means growing without increasing costs. Scaling happens when you increase revenue without taking on significant operational costs. 

Contrast that with growth, which is typically described as increasing revenue while incurring more expenses (i.e. more employees and other overhead costs), which would be the ‘capital intensive’ part of what Mr. Kelner mentioned above. 

With the right software tools in place, however, operators can take on more customers without increasing a ton more costs in resources to service them. You become scalable.

How software makes your business scalable

Different platforms help in different ways. 

For example, vending management software can organize and streamline routes, saving drivers time and effort. Cashless options make it easier to manage revenue. When it comes to delivery services, an online ordering option helps reduce time spent on managing orders so you can focus more on ‘white glove’ accounts. 

Looking at it this way, you can begin to see how each solution allows for less employees/effort while serving more customers. This is what scalable looks like in convenience services.

It’s essential that the solutions you choose are able to scale alongside your company. In other words, when evaluating software it’s important to ensure it has the flexibility within the platform itself to expand as your company expands. The last thing you want is to invest in technology only to find out it can only do so much up to a certain point.