SMB OS Operators, Part III: Booker
“SMB OS” is a paradigm shift that’s well underway. What is SMB OS? it expands the local opportunity beyond its traditional focus on advertising and marketing. Instead, a larger addressable market lies in the broader range of SMB functions that fall outside of, but dovetail with, marketing. It’s everything from payroll to payment processing to CRM.
This is the topic of an upcoming panel discussion at Street Fight Summit, so we’re spending lots of time with the practitioners of SMB OS. We’re also spinning out some of those discussions as standalone Q&A’s to get the SMB OS conversation rolling.
Our latest interview is with Booker CEO Josh McCarter. Recently acquired by MindBody, Booker has been living out the principles of SMB OS long before we started calling it that. See our interview with McCarter below and stay tuned for lots more on this topic.
Street Fight: Starting at a high level, what is Booker’s overall philosophy that drives the suite you offer local businesses for booking functionality and beyond?
Josh McCarter: Booker’s mission is to empower local business owners to run and grow their business using software that offers the type of robust functionality that historically has been reserved for enterprises. This means helping local businesses move beyond multiple, disconnected “point solutions” and on to a fully integrated platform that addresses the core needs of a service business, such as employee and customer management, scheduling/booking of services, point of sale (POS), merchant processing, and reporting. By having all of these features on an integrated platform, they gain complete visibility into their customers’ purchasing habits, staff performance, financials, and key business metrics so they can make informed decisions about how to run and grow their business.
We often hear from our customers that using Booker made it easier for them to scale their business and add locations when they were ready to grow. By offering multi-location functionality, such as the ability to share customers, services, and gift cards between locations, we make it easy for businesses to expand. In addition, for businesses that are focused on offering unique experiences that align with their branding and unique value propositions, Booker’s robust set of APIs provide flexibility unavailable from many competitors.
SF: How does this empower small businesses to have the functionality that was once reserved for deeper-pocketed rivals such as national companies that compete with them? Does this “democratize” high-end functionality—analogous to the way Amazon Web Services or Salesforce have done this in other contexts through enterprise SaaS offerings? What are a few examples?
JM: By consolidating multiple features on one platform and providing an easy-to-use interface, small businesses running on Booker are able to compete with larger chains with multi-million dollar annual technology budgets. In addition, since Booker has been a cloud-based platform from the very beginning, merchants and their customers can take advantage of anytime/anywhere access, whether that is for booking appointments online or taking mobile payments from the chair, right after a service is performed. Importantly, because Booker is available as a SaaS model and charged on a monthly basis, it is easy and inexpensive for a small business to get up and running quickly on Booker. By making it easy to get started and not have a long-term commitment, we can help a business catapult into the future, leaving behind their pen and paper scheduling or installed POS, and be up and running on Booker in a matter of days.
To help further enhance our product offering and drive customer engagement, we acquired an automated marketing platform called Frederick in 2015. Similarly to how Booker aggregated multiple business management features onto one platform, Frederick offers a suite of customer engagement and retention tools, which are not available from any other single source. Frederick utilizes the data from a business management system (like Booker or MindBody), which allows it to understand availability at the merchant and purchase habits of the customer, to then create targeted offers via email and two-way SMS, which fills bookings that otherwise would go unsold. The system also has the ability to upsell a customer who purchased one service onto a series, package, or membership using a drip campaign feature that brings Marketo-like functionality to the SMB. In addition, Frederick also offers a “ratings and feedback” feature which drives feedback to the business owner and certified reviews to certain consumer sites.
SF: In the age of big data, what are some of the ways you’re analyzing data on behalf of these businesses to help inform their decisions—everything from staffing to inventory/ordering? On a larger scale, are you utilizing your size (operating with many businesses) to benefit the operations of individual shops? For example, uncovering regional trends that are useful?
JM: Booker has been a pioneer in putting data to work on behalf of our customers. For years, we’ve been providing automated alerts around check-ins, inventory replenishment, and payment options. We have also provided online booking interfaces to help distribute a businesses’ appointment inventory to key consumer destinations, like Yelp, enabling bookings to happen after many businesses are closed.
Most recently, we’ve been investing into two breakthrough areas. The first is optimizing bookings on a businesses’ calendar. With Frederick, we continuously scan open space on a location’s calendar and find clients that are most likely to fill that spot and advertise the opening to those people specifically. This way we can help business owners fill any slow days or gaps on their calendars, without having to blast out a discount or deal to everyone.
We’ve also updated Frederick to include “Smart Lists” that self-update to segment clients so business owners can deliver personalized campaigns. For example, for businesses looking to convert first-time visitors into a second visit, and potentially more, an owner can easily send a custom email using the Smart List to all first-time visitors who haven’t bought a membership.
SF: One debate in the local media and advertising ecosystem is whether it’s better to cast a wide net across local verticals (i.e. restaurants, bars, movie theaters), or whether it’s better to specialize in one or a few verticals. Booker has taken the latter approach to a certain degree with a focus on appointment-based businesses in certain verticals. What are the advantages you see? Are there nuances in your vertical where your domain expertise, data collection, and other functions benefit from that unique focus? What other local verticals do you believe are similarly nuanced, and are any of interest to Booker?
JM: We have been on both sides of this discussion. Booker spun out of SpaFinder and was originally very focused on the spa industry. We expanded to target other service and appointment-based businesses but ultimately found that our software is really best-suited to the health, wellness, and beauty (HWB) market. We’ve refocused on that market because our product addresses the unique needs of these businesses, and we are now able to offer products to help them both run and grow their business. Importantly, this is a very large market and many of these businesses have not migrated to software or are using simple scheduling or various point solutions, and it’s likely they will need to upgrade to a more robust platform as they scale.
Some of our competitors target a wider range of verticals, but we feel we can be most effective by focusing on the HWB market, and we’re confident that by focusing, we can deliver a better product and also grow our user base. With an estimated 50% of spas and salons with no software solution in place, there’s still plenty of upside growth opportunity in the verticals we’re strongest in.
SF: What functionality do you believe is still missing that you’d like to develop? Are there economies of scale, efficiencies, one-stop-shop appeal and other benefits that increase as you develop more services (i.e. payroll, HR, or other business functions)?
JM: We deeply believe that the secret sauce of the best spa, salon, and beauty businesses is how they connect with their clients. The person-to-person connection is what’s most important, not the technology. Our goal as a technology provider is to enable people to connect in conversations and interactions, where the technology increasingly vanishes into the background. In addition to keeping customers engaged via Frederick’s various engagement services, we have something completely new coming in the new year that helps deepen the connection in-store via Booker.
We also know that our customers want to be very organized with their finances, but it’s one of the things they enjoy least about running their business. To that end, we have something new coming soon that will bring even more ease and automation to managing their finances, so they need to spend less time on it.
