Data Backup: Can It Save You Money?

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Does Backing Up Your Customer Data Actually Save You Money?

There is a lot of talk about Customer Data Backup. By now we all know and understand why it is important to backup our personal systems, wouldn’t want to lose all of those pictures from last years trip to Mexico now would you! But what about retailers, do they really need to make a habit of backing up their point of sale data? It is an honest question. According to Canadian Retail Solutions Operations Manager, Shawn Dillon “experience says YES retailers need to back up their data, and verify their backups, daily”.

Need convincing? According to Dillon, “the proof is in the numbers.” Every retailer spends their days entering sales and capturing customer retention data in their point of sale systems. Imagine if all of that point of purchase and customer relationship data was instantly gone, and not just a day’s worth but your entire business history. Loss of customer data can hit in so many ways; fire, hardware failure, old or out dated technology, human error, theft and the list goes on. It is necessary to view the value of your customer data in light of what the impact of lost data would be on your retail operations. Loss of data will effect your retail operations in a number of ways, including but not limited to, data recovery expenses. Obviously lost customer information would have serious negative implications on your purchasing decisions, inventory control, and marketing initiatives as well. But what about the direct expenses associated with data recovery?

Lets say you pay a staff member $10.00 / hr for their time. If at the time of your data loss you had one year of data that was critical to your operations, equal to approximately 220 days of data collection. (This number allows for store closures over holidays and weekends, in reality retail is open much more than this scenario shows, so these numbers are conservative.) Assuming 220 days of data collection, with the store only open 8 hours a day we have 1760 hours of data entry that would be lost. At $10.00 per hour the value of that data input alone is $17,600. Now, if we take half of that number, which is $8,800.00, this number reflects that fact that typically retail staff do not spend all of their time entering transactions. (We are not taking into account that stores normally have more than one staff member working.) Assuming a hard copy backup of all transactions and customer information is available for manual re-entry and that the data can be re-entered at the same pace, a labour cost of $8,800.00 (as previously calculated) for re-entry into your point of sale system is applicable. In addition to this labour expense for re-entry, another employee would still be required to serve your customers and at the same hourly wage of $10 per hour this will result in an additional cost of $8,800.00. Now the cost of data recovery expense has increased to $17,600.00 for re-entry alone! Typically with a loss of data a retailer requires the replacement of their point of sale hardware system and some degree of POS software reinstallation, an approximate investment of $1200.00. Leaving a bill of almost $19,000 just to get back in business! As a retailer, when you set up customer relationship management programs, you do so to improve business. However, when you fail to back up your POS and customer data, the opposite happens. The return on your relationship management program decreases and you are left with the headache of trying to retrieve your customer data.

Now, what does it cost to backup your customer data? There are a number of options for data backup and they come with different price tags. But the quickest and most cost effective way to get in the habit of customer data backup is to buy an appropriately sized USB key or a portable hard drive and make data backup part of your daily closing procedure. The expense of the hardware required can be reasonably estimated around $1000, and the backup itself should not take more than 10 minutes a day. Using the assumptions from the above scenario of 220 days of operation, and an hourly wage of $10.00 per hour, your approximate cost for implementing a data backup procedure would be $1367!! Now just think of how beneficial that investment could be for your business!

Canadian Retail Solutions Inc. (CRS) specializes in Inventory Control and Point of Sale Systems for retailers across Canada. Our business philosophy reflects an unwavering dedication to quality, integrity and personalized client support in all we do. Our POS solutions. Your retail success.

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