How I Revamped My Business Thanks to Square Data
Article originally written for and featured in Square’s Seller Community: https://www.sellercommunity.com/t5/General-Discussion/How-I-Revamped-My-Business-Thanks-to-Square-Data/m-p/108828#M21771
I’ve been running Pesso’s Ices & Ice Cream, my small ice cream shop in suburban New York, with my father since 2004. For the first 8 years, we were using a standard CASIO cash register, and we were basically running blind. It was incredibly hard to program and make changes, and even harder to track any actual sales data.
While we could see how much money we made, we couldn’t see or track any sales trends. We couldn’t tell what our best sellers were, which sizes we were selling the most and least of, if we were making a profit on Milkshakes, or any other figures we could use to make educated business decisions.
We were also cash only for those years, since we always thought that taking credit cards was too complicated, too expensive, and too far out of reach for us. In 2012, more and more customers were asking to use credit cards, and we knew we had to do something. So we took a leap and set up an iPad with the Square POS app. It was incredibly easy to set up and program, taking less than 30 minutes to input our entire Item library. And as soon as we were live, we immediately started to get data we could use to track our cash and credit sales.
I then started tracking all of the sales data that we finally started collecting thanks to Square, and organized it into my own spreadsheets to find trends. This was the beginning of sweeping changes for us to become the efficient and modern shop we are today.
Making the Menu
The most important step of setting up our Square Point of Sale System was really putting together our Item Library. It had to be organized in a way that not only got us great usable data, but also allowed our servers to ring up customers quickly and efficiently.
We quickly realized that our ever changing lineup of 100+ Flavors was way too much to track on the Register, being too complex and taking too much time to update and ring up. Even though it would be an incredible trove of data, we resigned to the fact that we’re better off having an efficient system and not gather that bit of data that we could still track by the number of tubs we use.
So we decided to have our Menu Categories align with our Product Categories (Ice Cream, Gelato, Italian Ice, Shakes, Sundaes, etc.), with each separate Item being based on each size. This sped up our line since our servers only had to tap a single button for each item rung up, rather than tapping through Modifiers or Variants to get to the correct size. It also allowed us to more easily track Size Sales by the item, rather than by Variants or Modifiers.
We also made Cones and Toppings separate Items, and saved the Modifiers for tracking add-ons for less frequently sold items. We do use Item Modifiers for changes that don’t affect price (just in case an employee skips through the popup) but that are still nice to track, like which one of our Signature Sundaes was sold, or whether the Milkshake was made with Ice Cream or Gelato.
A Small by Any Other Name
At our peak, we had 5 sizes for each of our Categories: Kid’s, Small, Medium, Large, Pint, and Quart. We noticed customer transactions were taking a long time because of this. Customers were confused by the sizes, and ended up asking our Servers every time just how big each of the sizes were. We had to explain to almost every customer that the Kid’s was 1 Scoop, Small was 2 Scoops, and so on.
After seeing the Data from our original naming system, I tested re-naming our sizes to a simple “By the Scoop” system: 1 Scoop, 2 Scoop, 3 Scoop, 4 Scoop. This simple rebranding had two huge impacts on our sales: First, it sped up all of our customer interactions, and therefor our transactions. Customers instantly knew how our sizes worked, and knew what to get. Second, customers started getting our smaller and more profitable sizes.
This simple name change ended up doubling the sales of our smallest size, and by the second year of this sizing model the 1 Scoop became our top selling item. As a result, sales of two of our largest and least profitable sizes dropped tremendously, so it only made sense to drop them from our menu. The same thing happened with our Milkshakes and Sundaes, so we also dropped them down to just a single size.
All of this, again, improved our customer experience by making our sizes clearer and easier to navigate, which sped up ordering and increased our profit along the way.
Another big trend we found was that our Frozen Yogurt sales were dropping dramatically year over year. This dropped both in quantity and in percentage of sales, while every other item and category increased tremendously. Meanwhile, the expenses for froyo were only increasing with all of the extra labor involved with machine maintenance, as well as rising costs of utilities like electric and water since we used water-cooled machines. When our machines started breaking down, the reduced demand along with the extremely high cost of repairing or replacing the machines made the decision easy for us. As each of our 3 machines broke down over the course of 2 years, we dropped Frozen Yogurt from our offerings.
While sales dropped somewhat as a result, our profit margin rose tremendously. The Pareto Principle of optimization was completely at play here: a huge chunk of our problems and expenses came from Frozen Yogurt which made up less than 10% of our Sales.
And all of that savings was all thanks to the data from Square. If we weren’t tracking our data and didn’t have access to the data and tracking sales as we did, we would have kept pumping in money and losing it all into the flailing Frozen Yogurt. We saved money, time, effort, and frustration, all because of this data.
A Page Out of the Register
When I first set up our Item Library on Square, we started with 5 full pages of menu items, and some of the sizes in the same category didn’t even fit on the same page. It took a lot of time to flip through all 5 pages, because it was impossible to try and remember which page the right items were. This led to longer customer interactions and checkout, fewer customers served, and longer lines.
Because we cut down on our number of Categories and Sizes thanks to insights from our real sales data, we ended up with fewer buttons on our register. Fewer buttons took up fewer pages, and without as many pages to fumble and tap through, our checkout process took up a whole lot less time. After all of these changes, with our new menu and pricing model, we managed to drop down to just a single 1 full page. Our transaction times dropped, and our customers were happier.
How to Do it Yourself
All of this together makes Square an absolutely indispensable reason for how my business has grown and simplified.