Profit is the applause a business gets from its customers. So the saying, originally from business author Ken Blanchard, goes.
Blanchard’s quip highlights the fact that to successfully navigate marketplace challenges and capture new opportunities, businesses increasingly need to focus on creating scalable solutions for their customers’ top needs.
And against the current dynamic operating backdrop, businesses need to not just provide the best product or solution possible, but also to do it extremely efficiently.
That’s why PYMNTS CEO Karen Webster sat down with Dax Dasilva, CEO at point-of-sale (POS) system company Lightspeed, to discuss the growing imperative for businesses to strike a strategic and productive balance between growth and profitability, all centered around customer satisfaction.
“We’ve got profitability as an absolute priority,” Dasilva said. “We’ve cut costs across the company and captured operational efficiencies.”
The approach is paying off for Lightspeed, which on Thursday (May 16) reported fourth quarter and full year 2024 financial results that came in above Wall Street estimates and saw the company’s stock jump double digits, as of reporting, in early morning trading.
But it isn’t all just about controlling for costs and driving efficiencies throughout the business.
While that remains one pillar of the company’s growth and profitability roadmap, Dasilva explained that Lightspeed is entering a new phase of growth by embracing a renewed focus on software as well as doubling down on expanding into the B2B segment as the other two key objectives.
“Our focus for fiscal year 2025 is software growth, whereas fiscal year 2024 was focused on payments penetration,” he said.
The ultimate goal is to provide smaller Main Street retail and hospitality merchants with the tools and solutions they need to challenge incumbent Goliaths and larger players.
Read more: Lightspeed Founder Returns to Lead Firm as CEO Departs
Software growth in particular will rely on meeting customer needs with new innovations.
“We are doubling down on tailored product innovation to capture the complex merchant,” Dasilva explained.
He underlined the importance of tailored products and customer experiences, leveraging product innovation and a personalized customer journey to cater to the diverse needs of merchants, particularly in complex retail and hospitality environments.
“Business owners at this size are not technologists,” Dasilva added, stressing that usability remains key in providing visibility to main street businesses.
Lightspeed’s expansion into the B2B segment also presents an exciting opportunity for the company as a second growth pillar.
By offering solutions for purchase order workflows, catalog management and leveraging supplier networks, Lightspeed aims to streamline operations for merchants and provide valuable insights to optimize inventory management. This move represents a significant step toward creating a comprehensive ecosystem that empowers small- to medium-sized businesses to thrive in an increasingly competitive market.
“Businesses are leveraging capital, and one of the benefits of onboarding everybody into the payments platform is now they can innovate with their best ideas,” Dasilva said.
Lightspeed’s data-driven approach, providing insights into stockouts and inventory turnover, is also equipping merchants with the tools to make informed decisions and drive profitability.
“Inventory turns make a business profitable,” Dasilva explained. “We have all the data pieces, and we’re presenting it to the customer around investing in the right product lines; we’re now leveraging more AI (artificial intelligence) driven recommendations so they can place those orders.”
In a challenging environment like today’s, where access to capital is hard to come by, businesses need to keep inventory turning at the most efficient levels possible. By participating in B2B ecosystems, businesses can gain a competitive advantage through increased efficiency, access to new markets and the ability to innovate more rapidly than their competitors.
“Capital plays very much into bringing these product streams together in a compelling way for retailers,” Dasilva explained. “Customers in this segment need more competitive advantages, there are a lot of large players out there to compete against, and smaller businesses need access to some of those economies of scale and supplier data.”
B2B ecosystems also generate a wealth of data that can be analyzed to gain insights into market trends, customer behavior and operational performance, helping businesses make more informed decisions.
“Business has gotten so much more complicated today, there’s so many channels. There’s a lot of things to understand, and inventory sits across many different locations now,” Dasilva explained. “That’s an ever-evolving challenge, and a unique thing we can solve for.”
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