Businesses that offer goods and services, such as retailers, understand that they need to make it easy for customers to buy from them.
Why should schools be any different?
One of the major barriers to income generation for schools is having payment systems that are outdated, confusing, mismatched or all of the above.
This applies to fundamentals like catering, but also to other income-generating areas, including school trips, sports, and other facilities, and Gift Aid donations.
Understand your Customer
Different users prefer different methods.
For example, many online payment systems allow parents to top up accounts of young children, but this approach can be less convenient for post-16 students and older customers..
Because over-16s will need to set up individual online profiles and add money to these, this can feel cumbersome and less attractive. In Sixth Forms and University Technical Colleges when students may only make purchases once or twice a week, it adds a layer of inconvenience; it’s even less suitable for staff, visitors, and contractors who might have to set up a profile only to use it once or no more than a handful of times.
These customers are used to paying with contactless card and mobile payments on the high street, so schools need to accommodate their preferences.
If schools miss out on sales due to inefficiencies or incompatibilities, these missed opportunities can quickly mount up, leaving gaps in budgets.
Generating income isn’t just about finding appropriate channels. It also requires accessible payment methods.
The Importance of Small Payments
Managing budgets is challenging for schools, and taking care of the little details is just as important as considering the bigger picture. Obviously, schools have a focus on substantial income streams such as fundraising and government grants. But small payments add up.
This principle applies to regular, everyday services such as catering, but also to school trips and other forms of income generation. Small payments take on a greater significance against a background of no extra funding for schools announced in the recent budget.
In school catering, cashless payments are becoming more popular, as schools realise that one way of securing regular income streams is to make it easier for pupils and parents to make payments.
However, while the principle is attractive, the execution needs to be right. There have been reports of mounting dinner money debt in schools due to lack of credit on cashless payment accounts.
This highlights the importance of having adaptable payment methods that will work for a broad range of customers.
Changing Consumer Behaviour
Are we becoming a cashless society, and if so, how will this continue to impact consumer choice and customer behaviour?
Back in 2017, the British Retail Consortium announced that debit cards would overtake cash as people’s preferred method of payment in the UK.
But while the use of cash has declined, people still like to have choice and flexibility in how they pay. And different customer demographics will have different preferences.
What’s the lesson here for schools?
If they adopt cashless systems that tie them in to one specific payment method, this doesn’t subsequently allow for these different user preferences. The rigidity of a payment method can be counter-productive, as the example of dinner money debt demonstrates.
And as we've highlighted earlier with online payment systems, one method may not be appropriate for pupils of all age groups.
Income Streams and Cashless Options
For schools to generate income, they need to have streamlined payment methods, but they also need to think creatively.
Extra income streams do exist, but to maximise these, schools must ensure that the customers these channels bring can pay in ways that are most convenient and appropriate for them.
For example, if a school is hiring out its facilities in the evening, how will it collect payment for this? Will it involve a one-off advance payment from an event organiser, or will it involve taking individual payments from individuals using school facilities? What about taking payments for school trips, or charitable donations?
Here’s another lesson from the retail sector. Back in the 20th century, Marks & Spencer refused to take credit card payments. They wanted to encourage customers to use the M&S chargecard exclusively.
The store’s chargecard had been popular, but times were changing, and restricting the choice of their customers had led to a downturn in sales. M&S recognised which way the wind was blowing – John Lewis had operated a similar policy but had now lifted its own credit card ban.
So what’s the lesson here? Put your customers’ needs first to maintain your income streams.
Tailoring Paytech for Income Generation
The shift from physical payment methods to electronic transactions and digital channels should make paying easier.
But the frictionless customer experience that paytech services offer will only bring long-term benefits to schools if they are sufficiently adaptable.
These payment methods must be flexible enough to be accessible to different user groups, but they must also fit in with the school's overall financial management system.
Is this a big ask? No, but only if you choose systems and platforms that are integrable.
This is the important second part of the equation. Whilst flexibility is important in making and taking payments, managing this money within an overall system is also critical to income generation.
Having multiple channels for income generation will only work if these channels can feed into a school’s back-office processes seamlessly.
Where Pebble Comes In
The Pebble suite of software products is designed to offer schools maximum flexibility without tying them down to one specific platform or solution.
Our point of sale tablet app, Till, streamlines the payment and processing of school meal payments. Trac integrates financial management systems, and Tali offers an efficient, joined-up approach to bookkeeping.
Schools are in the business of education, but they must also use sound business principles to generate and manage their income.
We can help you do this.
For more details, please contact the Pebble team today.
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