How a POS System can help with Customer Relationship Management

How a POS System can help with Customer Relationship Management

Customers are at the core of every business, regardless of the size, industry or niche. While the term customer relationship management may be relatively new as it was first popularised around the 1970s, the concept of giving importance to customers is an age-old belief. However, as businesses grow, new staff join and the customer pool widens significantly, managing customers becomes complicated. For businesses that use point of sale (POS) systems, an ideal way to improve customer relationship management is to utilise the benefits the POS system offers.

The technology of POS systems has evolved significantly over the years, beginning from basic cash registers to modern multi-purpose POS terminals. The core purpose of a POS system is to complete transactions and process payments for products or services, but additional applications include employee management, inventory management, and tracking marketing. Depending upon the choice of POS software, there can be support for extra features.

If you already have a POS system in place, you can support CRM functionalities through the POS software, or by integrating the POS system with dedicated CRM software. For setting up a new POS system, you can choose POS software that meets your CRM needs, supported by good quality POS hardware components. Here is a complete guide on how a POS system can help you with CRM.

What is CRM?

CRM refers to Customer Relationship Management and involves managing interactions and relations with previous, current, and potential customers. Although the importance of customers for businesses is commonly known, CRM focuses on using data and analysis to build better relationships with customers. A data-backed approach has substantially higher success in increasing sales, customer retention and engagement. Initial forms of CRM used customer satisfaction surveys and feedback to gauge public opinion.

Over the years, the popularity of CRM grew as more powerful CRM software were developed in the 2000s that could accurately collate and analyse bulks of customer data. Diverse types of CRM software were made available, including open-source CRM systems where businesses could customise the software as needed. Initially used mostly by large businesses, CRM availability expanded to the cloud, making it accessible for smaller businesses and brands.

CRM software has now become affordable and a common part of most business setups. There are industry-specific CRM solutions that cater to the particular needs of an industry. As CRM technology became more common, features of CRM were incorporated by POS software providers. Many of the top POS software providers have dedicated features available for CRM, while most support integrations with independent CRM software.

POS Systems and CRM

A POS setup is almost a necessity for any business that conducts transactions and accepts payments directly from customers for the sale of goods or services. While cash registers are occasionally used by smaller businesses, a POS system offers substantially greater benefits, making it worth the investment. They are also excellent at supporting CRM, resulting in happier customers, greater business growth and more profits.

A POS system requires POS hardware components and POS software. Depending upon the number of checkouts to support, the initial purchasing cost of POS hardware components can be expensive. Basic POS hardware components include operating systems, monitors, barcode scanner, cash drawer, payment processors such as EFTPOS, and receipt printers. POS software is generally available at a monthly subscription cost, and the POS software you choose will influence the features it can support.

There are two ways to incorporate CRM functionality with a POS system, by using POS software that has CRM capabilities, or by integrating independent CRM software with a POS system.

1. POS Systems with CRM Features

Many POS software providers have dedicated CRM capabilities either included as a part of the overall POS software package, or as an addition. There is also industry specific POS software available for retail or restaurants or cafes that also have CRM features.

The most commonly supported CRM features include storing and managing customer data, tracking leads, tracking customer purchasing habits, forecasting and reporting on sales, and segmenting customers by groups and sub-groups. Other features include social media and other communication, loyalty programmes, real-time reporting, sharing files and data with employees, and tracking customer feedback and complaints.

An advantage of having a POS system with CRM features is that it is more user-friendly, as employees do not need to learn an entirely new interface. Management is also more straightforward, with a single software handling both POS and CRM operations. A disadvantage is that the CRM features are often limited as the core purpose of POS software is to manage the point-of-sale operations.

2. POS Systems Integrated with CRM Software

POS systems with adequate POS software typically have full support for integrations with additional business tools. A popular POS system integration for many businesses is with a good quality CRM software. With an integrated setup, you get the powerful features of CRM software along with the convenience of a POS system.

Specialised CRM software have a vast range of powerful features, and there is also industry-specific CRM software available, and capabilities for customisation to suit your business needs. The top features of CRM software include opportunity management, lead management, real-time data, sales forecasting, email management and customer segmentation.

CRM software gives powerful insights into customer data and behaviour through CRM analytics and advanced reporting on everything including ROI, number of leads, number of sales, effectiveness of communications. There is significantly greater support for automation in everything from sales processes to marketing, and customer support. Workflow automation helps in saving money, time and effort of personnel while also reducing chances of human error.

The biggest advantage of using dedicated CRM software is that you get a wider range of powerful features for more advanced CRM. This is especially helpful if you a large customer base or multiple storefronts, either physical or a combination of online and offline. The disadvantages are that you have to pay extra for CRM software, and will also have to operate an additional interface apart from the POS system.

Advantages of a CRM-POS System

There is an abundance of benefits of having a CRM-POS system, whether it is through POS software with CRM features, or integrated CRM software with POS system. It helps in promoting better customer relations with easier data collection, enabling you to increase business growth and profits. Some of the top advantages are:

1. Quick and Easy Customer Information Collection

Gaining information about customers is the first step to building a lasting relationship, and the POS system is an excellent way to collect these details. While many customers are unlikely to spend extra time in giving their details at a separate counter or stand, most customers will easily share information at the checkout.

Businesses often collect customer data during transactions, especially for cashless transactions, and this data can be directly saved to build the customer database. By automatically saving any customer data collected at the checkout, you can collect a vast number of customer details with minimal effort. For example, customer names, products purchased, product categories, email addresses, preferred payment methods, billing and shipping addresses, and more can be collected through POS systems. All this data can be immensely useful in various ways.

2. Better Understanding of Customers

Understanding the customers is important for a business as it helps the business create offerings, prices and promotions that will most appeal to the target customers. It supports in converting casual customers into repeat customers. General research is effective in understanding the basic preferences of the target customers, however, direct data from your actual customers is invaluable. Using the customer data collected through the POS system, businesses can have a greater understanding of the customers.

Characteristics of customers such as shopping preferences, frequency of purchase, location and response to promotions can help in refining business performance. Purchasing preferences can help identify the products/services, or categories that are most successful and can be expanded upon, along with unpopular products that can be discontinued. Continuously revising the product offering is key to developing a successful and ideal overall catalogue.

3. Personalised Customer Experience

Everyone loves a personalised experience, especially customers and a positive experience encourages customers to spend more and return again. Combining a POS system with CRM functionalities gives a significant boost to the mobility of customer information as all CRM data can be viewed from the POS operating system. At the checkout point, your employees can instantly draw up the previously used payment modes for faster transactions. If any customer wants a return or exchange and is missing a receipt or product details, the POS system will have a record of past purchases.

Apart from aiding in fast checkouts, CRM data in POS devices can help in increasing sales. With the history of customers available at the fingertips of employees, they can more easily and effectively suggest products for upselling and cross-selling. Past history of customers can show the types of products they are most interested in and their average order values, indicating their general budget flexibility. A mobile POS system with CRM connectivity can help employees directly approach customers and provide personalised suggestions and service.

4. Targeted Promotions and Marketing

Marketing and promotions are a powerful tool to increase sales and profit. They increase awareness about the business and encourage customers to purchase. The potential success of any marketing campaign or promotion is significantly affected by the amount of information available about the target audience. A POS system with CRM functionalities can help you get concrete data about your customer base, helping you prepare targeted promotions and marketing. With customer data and segmentation, you can tailor-make promotions for specific segments of your customer base.

The POS system can help you track the performance of promotions and marketing endeavours while a CRM database can help maintain a full record of past promotions and their responses. The response to promotions can help you spot customer purchasing trends, and whether you should increase or decrease the frequency and style of promotion. For example, it may be possible that in your specific niche and region, holiday promotions are more successful than end-of-season sales. Promotion types also vary from overall percentage discounts to buy-one-get-one-free format offers.

5. Loyalty Programmes

Throughout history, there has been a special value placed on customer retention. Any number of new customers you gain will be of no use if you cannot retain them and their loyalty. A great way to build a regular customer base and encourage engagement is by offering loyalty programmes. With a cohesive POS and CRM system, you can offer loyalty programmes directly from the POS system. If you already have all the required customer details for the transaction, signing up for a loyalty programme will be easy for customers, and they are more likely to agree.

Based on your specific niche, you can customise the loyalty programmes to suit the shopping preferences of your customers. For example, you can try out a rewards points system, or other deals for frequent purchases. The POS system can help you track the performance of loyalty programmes and identify frequent shoppers. To encourage the already frequent shoppers, you can consider offering premium loyalty programmes.

Why use a POS System for CRM?

Any type of customer relationship management system, even the most advanced software, requires some form of inputs for customer data. This can be time consuming and cumbersome, adding extra work onto employees. It may even mean that customers have to spend extra time to input their own data. Manually entering data, whether through employees or customers themselves is not ideal and can lead to errors or discouragement of customers.

A POS system streamlines the process of entering data into a CRM setup, making it faster, easier and more efficient. Customers are more likely to share their details and enter loyalty programs if it is easy and quick, and this is made possible with POS systems. Furthermore, with a combined POS and CRM system, you can offer customers the benefit of a personalised experience from the POS system.

When the volume of customers starts getting high, automated processes are a great way to save time and promote efficiency. With a CRM-POS system, a wide range of activities and back-end processes can be automated. These include reporting, creating customer profiles and segmentation, exporting data and setting up email marketing.


A POS system is an important part of businesses involved in the direct sale of goods or services to customers, as it completes transactions and processes payments. With adequate POS software, the POS system can be used for customer relationship management, helping widen the customer base and increase profits. CRM functionalities can be added by choosing POS software with CRM features, or integrating the POS software with independent CRM tools.

When you already have a POS system, or a need for one, maximise its benefits by combining it with a CRM setup. Based on your business niche, you can find industry-specific POS systems and CRM software available. A mobile POS system can further help you enable your employees to directly engage with customers, and leverage CRM data for greater sales. The foundation begins with a good quality POS system, including the POS hardware components and software.

Here at POS Plaza, you can find good quality POS hardware components, accessories and consumables, including POS bundles. Reach out to us to discuss your business needs, and to find a suitable POS solution.