HCM Software: Grow Your Business with Apple’s Secret for Success
You may or may not know Apple started as a computer company. But they quickly discovered the margins were much better on software than on hardware. What’s more, the customer who bought one computer would license a lot more software.
You may or may not also remember the iPod. It was a tiny little mp3 player that promised “thousands of songs in your pocket.” The iPod – not their computers – inspired the iPhone, the cash cow that rocketed Apple up to one of the most valuable companies in the world.
Sure, it’s a telephone. But they can only sell a phone once. However, if you consider an iPhone as a content consumption device, think of the money they make marking up apps on the Play Store, selling added cloud storage for all the photos people take with their phones, and streaming music and movies on a subscription basis.
Full-featured HCM software can work the same way for the service provider who looks at it like an iPhone. Whatever service inspires a client to subscribe to one component of a full-featured HCM platform can open the door to selling a treasure trove of high-margin, easily provisioned products that clients just don’t know they want or need yet.
HR or Payroll? It Doesn’t Matter
For a PEO or HRO, delivering services via a full-featured HCM platform is not much of a stretch. The basic offering is probably on-brand. Once you set up shop in a client’s operations, you can easily identify the gaps in their employer services and offer to fill those too.
More often, Payroll Service Bureaus (PSBs) are locked into a payroll-centric platform with little or no ability to expand their offerings. Switching their book of business to a new platform is a daunting prospect. Sometimes, it takes the loss of an important account to motivate the change. But if they plan to survive – and grow – the change must be made.
And they’ve already done the hardest part; they’ve got the client. It’s easier to train existing staff on new software than it is to find new clients. Convincing clients to change platforms can be challenging, unless they’re also feeling constrained by old technology. The conversation about increased efficiencies and time-savings ahead of that change is also the start of a conversation about all the other HR capabilities available with better technology.
The Benefits of Benefits
Whichever of the two keystone services you start with, it only gets better from there. A full-featured HCM will allow you to deliver employee benefits like healthcare insurance, 401(k)s, dental and vision care, life insurance, and more from third-party providers. Remember that Play Store mark-up model? Here’s yours!
What’s more, you rarely have to service such business. The third-parties will handle all the expert engagement and support for you. They’ll even do the selling. You just need to check in on the client periodically and make sure the commissions that appear in the bank every month are right.
More Profits, By a Huge Margin
Just like Apple learned long ago, the real money is in the add-ons. If you see yourself as a services provider, you may want to take a second look at your model. The right HCM platform can let you share in the proceeds for a range of products, with nominal costs beyond the original cost of sales.
If you want to drive a lot more revenue, Apple’s iPhone model is a great one to follow.
If your current business model isn’t laying the groundwork for a range of new high-margin revenue streams, check out PrismHR’s HCM. It has been designed with HROs and PSBs in mind. To learn more, visit us at prismhr.com/software/hcm.