Redacted Primary Research Report - input needed
Heather Chin
Here is the draft redacted primary research report summary text. Please revise/add/delete where needed (i.e. add competitor pricing!):
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Subsequent to the October 14, 2012 Mid-Course Primary Research Report, the UCLA team’s primary research activities focused on speaking with more employees, existing customers, competitors, distributors, and industry experts. The majority of this report is derived from the October Do It Best trade show.
For the purposes of this report, only information and interviews obtained after the Mid-Course Primary Research Report will be included. Also, interviews with employees as well as selected interviewees/ respondents are not included in this primary research summary in accordance with UCLA Anderson’s policies on redacting certain research in relation to this project. As appropriate, interview notes have been redacted in order to maintain the confidentiality of our interviewees.
Employees
Employees from the Pacsoft USA divisions were interviewed. Information related to operating procedures, sales development tactics, software development procedures, customer care practices, and company culture were included as part of these discussions. There was a general consensus from the employees that we spoke to that they enjoyed working for Pacsoft, but there was room for improvement. Comments regarding more consistent communication, a need for more resources, and standardized company procedures (i.e. yearly reviews, access to human resources) were made.
Customers
Customer interviews, along with an online survey sent to existing U.S. customers covered a variety of topics from satisfaction with the Pacsoft product and service to features use. Customers were also asked whether they knew about the mobile applications that Pacsoft offered and whether there is interest generated from these offerings.
The customer survey received over 70 responses. A summary of the survey results are as follows:
- The majority of responses were derived from male customers, age 45-54, who ran a single store that made about $500K to $1M in annual revenue.
- The most important factors in choosing and maintaining a POS software were:
- 1. Timeliness of Response
- 2. Customer Care
- 3. Software Features
- 4. Price
- 5. Software Ease of Use
- 6. Software Compatibility
- 7. Product Innovation
- 8. Incorporation of Rewards Program
- · On a scale of 1 to 7, with 7 being the Most Satisfied, the average result of respondents in the following categories in regards to Pacsoft are:
- Software Features: 5.74
- Timeliness of Response: 5.49
- Customer Care: 5.43
- Software Ease of Use: 5.34
- Product Innovation: 5.01
- Return on Investment: 4.96
- Price: 4.49
- A majority of respondents use the Inventory Management (78%), Accounts Receivable (86%), and Point of Sale (94%) software features. Other features are not as commonly utilized, such as General Ledger (8%), Accounts Payable (24%), and Mobile Applications (12%)
- In regards to Mobile Applications, respondents favored a pricing structure that had a flat upfront fee plus a monthly subscription as opposed to a per-transaction usage fee or a trial period plus higher monthly subscription.
- 75% of respondents are likely to recommend Pacsoft to another business owner.
As seen in the survey results, customers
appear to use some features in Optemizer more than others. Customer interview
findings also confirm this and it appears that the lack of knowledge and training
in regards to software features are preventing customers from utilizing the
software more effectively.
Further, customer interviews revealed that Pacsoft has a number of passionate and knowledgeable customers that voiced interest in customer advisory boards and the use of social media. They also acknowledged the Pacsoft USA staff in a positive light, however cited that the software is not very user friendly and has defects/bugs.
These interviews highlighted the importance of attending trade shows throughout the year. Many of our interviewees first discovered Pacsoft through these trade shows and now use the shows as their main source of information. Customers enjoy being able to meet other store owners, trade strategies, and attending Pacsoft user groups.
Competitors
The UCLA team spoke with a variety of the company’s known direct competitors as part of research. Included in this group are competitors from all sizes: large (Epicor/Advantage, ECi RockSolid); mid-sized (DMSi), and small (J3, Paladin). Interviews covered a range of topics from the emergence of cloud technology and SaaS, customer preferences in software, relationship building, sales channel management, pricing mechanisms, market trends, and technology resources.
Based on the team’s research, Epicor and ECi are losing market share in the industry due to poor customer service. While these companies, Epicor in particular, have very effective sales strategies, we heard consistent stories that the attention given to the customer greatly diminishes after the sale is made. The customer loses the personalized attention that was given during the sale and experiences difficulty in getting in touch with the company after that point. Customer service and timeliness of response has proven to be extremely important to the customer, and with these major competitors performing poorly on these measures, Pacsoft has the ability to gain market share at this time.
While the UCLA team was able to speak to a number of competitors, we were not able to secure pricing lists for the competitor products. Some of the interviewees simply did not have that knowledge to share, others were able to give a rough estimate, and some were guarded and did not want to reveal company information. In addition, pricing is dependent on a number of customizable factors, thus some of our interviewees could not communicate a price due to the complexity and size of each sale.
Distributors
Distributors continue to play an important role in the industry in providing stores with information on POS software selection processes and assisting them in finding the information needed to make a purchasing decision. The Distributors do not make recommendations on a specific POS software vendor to its retailer members, but advise the retailer to talk to a couple different providers, look at their needs, and see which software’s features are compatible with those needs. Some Distributors also operate in territories. Research interviews show that in order to build relationships with the Distributors, it is important to first establish a relationship with the respective Territory Manager. These relationships with the Distributor are important for Pacsoft to develop as the Distributor has a large network of stores that could be potential customers for Pacsoft.
Industry Experts
Subject matter experts were
interviewed on a variety of topics such as industry trends, the effectiveness
of trade shows, and industry outlook. Besides the hardware/lumber industry,
other industries explored include convenience stores and electronics, where
there was an interest in mobility, but also high price sensitivity.
Interviews revealed that Pacsoft has an opportunity to utilize search engine optimization to increase brand awareness. While it is difficult to drive internet traffic to a certain website with high volume keywords, it is easy to increase traffic in niche markets.