When making a big purchase for your business, it’s easy to focus on costs rather than returns. With products, equipment or staffing, it’s easier to understand what you’re getting from your money: After all, you can see firsthand that higher-end products produce better results, quality equipment lasts longer, and more experienced staff members perform services more skillfully. But with things like business management software, it can often be difficult to see how the money you’re spending each month translates into tangible benefits.
While there’s no single benchmark that applies to every business, there are a number of questions you should be answering on a regular basis to assess your software return on investment (ROI). Here are 6 key questions to start with.
1. Are you seeing growth?
This is the ultimate question that any business owner wants to answer with a yes. If you’re spending a lot of money on your management system, but aren’t seeing growth from the tools it provides, you’re either investing in the wrong system or not taking advantage of everything your system has to offer.
While looking at service revenue, retail sales, and gift certificate sales is a good way to assess growth, you should also be looking at things like booking volume, number of new customers, repeat visits from existing customers, and inventory turnover as well. All of these latter items impact your bottom line revenue, so it’s important to measure them as well.
2. Are you saving time?
This question is also essential. If your software takes a lot of time to use, update, and maintain, then it’s time to start looking for a better solution. Business owners have enough on their plate without having to deal with an unintuitive, buggy, or labor-intensive system!
However, that’s not to say that using software will involve no time or effort. A business management system that controls and tracks all of your day-to-day activities—everything from scheduling and bookings, to sales and credit card processing, to inventory management, to employee records & payroll, to marketing and special offers—is by nature complex. In fact, you’ll likely be using that system every single day. But the time you put into your system should be saving you time elsewhere—whether it’s streamlining your reporting process, updating your calendar in real time, speeding up your inventory reorders, or giving you a quicker way set up marketing campaigns.
3. Are your staff members saving time?
Your business management software touches all of your employees, especially your front desk staff. Whatever system you have in place should free up time for them as well so that they can focus on giving in-person services, providing customer support, and maintaining your space. A variety of features in your software system can your staff time, such as online bookings, integrated payment processing, mobile business management, and accessible customer records.
4. Are your clients having a better experience?
It’s true that customers are less likely to tell you when they’re happy than when they’re unhappy, but asking the right questions during a service or in the process of checking someone out can help you answer this question. How did they find you? Did they book an appointment online or on mobile? Did someone buy them a gift certificate online? Have they purchased items from your eCommerce store? All of these are features of a robust software system that can have a positive impact on a client’s first impression of your business—and first impressions are what turn first-timers into lifelong patrons.
5. Are you improving efficiency?
A business management system that powers all of your key daily functions should be able to improve your efficiency as well as save you time. For example, if you were using different systems for customer records and payment processing, you would have to manually correlate purchases to clients. With one system, all of that information is already linked, giving you an efficient way to see how many and what types of purchases each of your customers has made.
6. Are you gaining deeper insights into your business?
This last question is one that business owners think about less often, but the answer can actually have just as much of an impact on your bottom line as monetary returns from sales growth. Sure, you’ve probably got a bunch of data about your customers, employees, inventory, sales, and the like. But having all of the data in a central place, with reports that reveal meaningful trends that have an impact on your business, is incredibly valuable. A great business management system should be a central hub that you can rely on not just to collect the data you want access to, but also present you that information in a way that helps you glean actionable insights you can use to improve your offerings and processes.
The Bottom Line
A business management system isn’t just a cost—it’s an investment in a better way to run your business. If your system doesn’t provide the answers you want to hear to the above 6 questions, then stop wasting your money and reinvest in a solution that will positively impact your business instead.
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