Techniques To Compete

Aug. 5, 2016
Three ways small vending operations can innovate while continuing to vie for a slice of the industry’s profit.

The challenges of running a vending operation are uniquely different for small business owners than they are for large ones. Oftentimes employees wear multiple hats, relying on one another to fill several roles within the organization. With limited capital, the decision of when and how to use resources to invest and expand is also crucial, as is the return on investment. And top-notch customer service is a must when it's how you compete against larger operators or those who sell on price.

Small operations, which currently make up 50 percent of the vending industry according to recent data from Automatic Merchandiser magazine's State of the Vending Industry report, can still effectively compete. It's time to innovate and use creative techniques to bring out the best in your growing business.

Use technology in unique ways

You're never too small to integrate technology was a sentiment shared throughout the Small Operator Roundtable discussion at the NAMA OneShow in Chicago, IL, this past April. Technology, both on the front and backend of an operation, allows the vending company to create efficiencies, cut costs and interact with the customer at the machine (and vice versa).

And one small vending operator is using technology in a distinctive way. Mike Kever, president of Advantage Vending & Coffee Services located in Searcy, AR, operates one full vending route and invested in short codes for his vending machines in order to be up-to-date on machine outages and issues. A short code, according to, is, “a 5- or 6-digit number that can send and receive SMS (and MMS) to and from mobile phones.” When a customer experiences issues at the machine, they can use their phones and the short code, displayed on the vending machine, to let Advantage Vending know of a problem. Kever receives a text message directly to his phone with the machine number. “We’ve saved so much money with the short codes and we look like a hero when we come and fix it fast,” he said. “Without the short codes we would not have known a machine was having issues until the next time the route driver made a stop and that would have significantly affected our sales.” He did caution that short codes are an investment and take preparation. They are, however, a better option than QR codes, which may be cheaper, but are also trending out, he says. “It’s a simple tool and it works.”

In order to gain traction with customers, it’s also important for small vending operations to be involved in social media technology and have a web presence as well. In a survey taken by Automatic Merchandiser earlier this year, nearly half of the respondents said that they do not use social media. Likewise, a survey published last year by Redshift Research found that 60 percent of very small businesses (i.e. made up of one to five people) don’t have websites. That means that those companies not utilizing a web presence are relying on word-of-mouth to promote their company. Although websites cost money, social media accounts do not.

Small operators can use this platform to hold competitions, build brand awareness and generate excitement. At the OneShow roundtable, one operator discussed how he brought a trial single-cup machine to the offices of 10 people who “liked” his company’s Facebook page.

Outsource your weaknesses

In a small vending business, multi-tasking is inevitable. But at what point does a manager stop and say “Enough is enough, I’m spending way too much time on this”? When you’re growing a business it’s important to know your strengths and your weaknesses, said Chip Potter, NAMA’s Vice President of Information Services, and moderator of the Small Operator Roundtable. Potter recommends pinpointing several strengths and outsourcing the rest. This can include payroll, accounting, marketing and social media.

Without having to put attention on topics that are time-consuming, small operators can focus on other tasks such as sales, customer service and growing the business. Business News Daily recommends that small businesses outsource these technology tasks: Infrastructure as a Service (IaaS), cloud hosting, website design and updates, cybersecurity, business apps (if applicable), and, among other tasks, any project outside the scope of the owner’s expertise.

It's a commonly used practice for small businesses to hire an outside bookkeeper and an even newer concept for those businesses to outsource their web presence and social media. Outsourcing your company’s web presence is cheaper than hiring an employee to manage it and although there is a risk for a loss of authenticity, the benefits outweigh the costs – and it is possible to create a balance so your company’s voice comes through in blog content and social media posts. One of the only things that can’t be outsourced is great customer service and keeping that service up as you grow.

Cross-train employees

Small businesses thrive on employees who wear multiple hats. Cross-training employees to fill multiple roles is essential for a small business to succeed, especially as it grows. Several attendees in the Small Operation Roundtable session stressed the importance that each employee should know each other’s roles.

Pickers, for example, should be taken on a route with a driver to understand the importance of their job and how it correlates to the overall operation. Likewise, route drivers should all be trained on how to troubleshoot and fix their own machines.

Cross-training employees is an operator’s best defense against indispensable employees. If an employee quits, it will be easier to fill their role if another employee is cross-trained to take on that responsibility until the job is re-filled and can help train the new hire.

The vending industry was founded by entrepreneurs and will continue to attract start-ups and new businesses. It is important to share challenges, as well as unique best practices, so the next generation of vending, micro market and office coffee service operators have a long and prosperous future.