The Green Sheet Online Edition
November 24, 2008 • Issue 08:11:02
The long road to payments
Paul Lonsford, a merchant level salesperson for First Data Independent Sales, took the long road to the payments industry. With opportunities in his career as a sales agent in the wireless phone industry on the decline, he took a six-year hiatus from sales to be a personal fitness trainer.
Success at the gym required long hours away from family. Plus he was coaching millionaires rather than becoming one himself. So, he decided to return to sales, this time in the payments industry. In the past four years, Lonsford has consistently been in the top 10 sales offices for FDIS.
The Green Sheet: What initially attracted you to the payments industry?
Paul Lonsford: One of my clients was someone in payments who had cashed out his portfolio and was living a lifestyle I desired. And I knew with my sales background I felt I could sell. All I needed was pen, paper and the will to get contracts signed to make a living. That's how I started. I'd like to tell you it started off really well in the beginning, but it didn't.
GS: What made your transition to the payments industry rocky?
PL: I started with Cardservice International in November 2004, which was subsequently rebranded FDIS. There wasn't a lot of information out there. I had neither formal training nor the luxury of someone taking me under their wing.
Regardless of that, I jumped in with both feet, but unfortunately things got uglier before they got better. My wife and I were at our lowest point. I had no money when I started up, though I was determined not to give up on this business.
GS: When did things turn around for you?
PL: By chance, a sales manager from the First Data Direct Business Group hired me. He ended up leaving two weeks after I started, and I ended up without any management support during the Concord EFS/First Data merger.
Then, after I got some help as a corporate representative at First Data, I asked my old regional sales manager
with FDIS if I could restart there as an agent. I came back with a better business plan and ended up making $225,000 that first year. And last year, our third, my office made $832,000 with only myself and my great assistant Justin Wilson.
GS: How has your sales technique evolved since you first started?
PL: When I started, the problem I saw was, in my opinion, antiquated thinking on the same concepts: Go out and cold call your 20 businesses a day, beat your head against the wall and someday, years later, you'll have money coming in.
You've got to find leverage. The difference between the agent making $200,000 a year and the one making half a million is simply a matter of how many leads you can generate.
How can I drive volume and get sales velocity without all the windshield time, trying to contact one person at a time? Eventually, you can't get there quick enough and end up losing sales.
GS: What did you do to combat this?
PL: I went the joint venture route. I started creating partnerships, and my first partnership really took off in the first three months. I was scrapping around for 10 or 15 accounts a month. Six months after I started creating these partnerships, we were doing 200 accounts a month. I'm only a two-person office, but with our joint ventures we've still been boarding around 100 to 110 new accounts a month, even with the economy in its current state.
GS: What particular verticals do you focus on, and what types of merchants are in your portfolio?
PL: I used to be heavily Internet but now I'm at about 65 percent brick and mortar. I like auto dealerships. But I spent about six years in that business, so I found boarding those merchants was kind of easy for me, even though they have a reputation for some tough gatekeepers. I also like the medical field.
I see a lot of people in this business chasing retail and restaurants, but who's got the worst gatekeepers? Doctors' offices. So, I thought if I could master that business, which is pretty tough, then I'd have fewer people competing with me. And through good times and bad, medical is always consistent.
GS: In what ways do you see your sales approach as unique?
PL: Well, right now I'm only doing credit and debit card processing. We offer check processing, gift cards and prepaid as well, but my first goal was always just to build up the portfolio revenue. It was really more important to build a portfolio, master your list of customers, get that first product in, and then come back and try to get greater product penetration after the sale versus trying to sell everything at once.
My philosophy is keep it simple, focus on merchant account card processing and go for the value added services as your client relationship develops. I also believe that it's more important to put the focus on your portfolio than on equipment leasing and sales.
GS: Are there any particular products or services First Data offers, or will be offering in the future, that you are excited about and feel will expand your revenue stream?
PL: We have a new global gateway, which just gave us a huge advantage over, I believe, pretty much every product out there.
What is exciting is that now we have a cost-effective Internet check acceptance, and that ties in nicely with the click and mortar market I've been pursuing.
GS: What advantages does establishing a click and mortar vertical give to your merchants?
PL: We show our clients how to get another level of channel marketing on the Internet. Say a merchant has a specialty shop.
I tell them to pick a few items that are unique to their business, put them up on a Web page, and they can exponentially increase sales volume without having to increase retail space, inventory or worry about how many people are coming into their store.
GS: With the recent credit crisis and Wall Street meltdown, what do you think is the highest priority for an agent to prevent merchant attrition?
PL: I think that regardless of the economic state, customer services will always be critical. Everywhere I go these days customer service - in any business - seems like a dying art. I think it simply comes down to making sure that your customers know you care. It takes a combination of consistent phone calls, e-mails and face to face to let your merchants know they are valued.
Additionally, it's critical to be quickly responsive to your merchants, to handle problems immediately. When my office says we're going to get it done, we get it done - and as expeditiously as possible. Consequently, our average annual attrition rate is about 3 percent a year.
GS: Do you have one method you prefer for generating leads?
PL: Partnerships. Strategic partnerships, joint ventures. To me, nothing can beat those. And most sales agents I know that are in that top 10 realm, pretty much a lot of their success is coming from referral partnerships.
GS: With all the recent activity on Capitol Hill, is there anything that concerns you or will cause you to rethink your business strategies?
PL: I feel that most of it will not have a major impact on our business model. But my biggest fear is that in the current economy, it just comes down to credit card usage.
If the credit card companies lose their ability to securitize their portfolios, if they lose that ability to open up lines of credit, or if they continue tightening their lines of credit, that could be very impactful on our business.
GS: Do you have any advice for newbies entering the payments industry?
PL: Focus most of your time on sales and marketing. I always tell newcomers GTM - get the money - because that is what will drive your business. One other thing I see is salespeople get focused on what I call big-itis, that one big deal they think is going to take care of all their needs.
Focus instead on the bread and butter, the everyday deals. I found I could accomplish much more when I focused on smaller deals and allotted a few hours a week to the bigger, long-term deals.
I would also suggest that they pick one processor, instead of four or five, and stick with it. That's why I stuck with First Data. When you are trying to become a big fish with one processor you get treated better.
And the more value you bring to your company, the more care and assistance you get. You get more perks, I believe, with one processor, and the value to that is a good processor will help you grow your business.
GS: What keeps you inspired and motivated?
PL: Well, I've got my family to keep me going. I also like the freedom that this business allows. I like having control of what I'm doing, and honestly the payments industry has allowed me to have a lifestyle that not a lot of people have.
GS: Has The Green Sheet helped you in your career, and if so, in what ways?
PL: Yeah, I get a lot of new product ideas. I get a lot of ideas on verticals and just kind of see how people approach different verticals. And one of my favorite parts is your press releases.
I look at those every day because, honestly, you guys are ahead of the game in that regard.
I could read The Green Sheet and know something before it came down the corporate e-mail. It's a great resource to figure out what people are doing. And I've actually traded stock on some of the information in those press releases.
GS: Do you have a particular philosophy on life or a motto by which you live?
PL: Just be relentless in your pursuit of the goal, relentless in your pursuit of the customer.
I have a saying, No is just no for today. We actually have leads from three years ago that we closed this year. Times change, things change, people change, so just be relentless and never stop.
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