By Jeff Fortney
A consequence is defined as something that follows an action or condition. In other words, it is well understood that everything we do - or don't do - has a consequence. We all learn this rule as children. If we touch a hot stove, we will get burned; if we hit our brother or sister, we will be reprimanded.
Many a parent has said, "You have to pay the consequences," when a child has done something he or she clearly knew was wrong. That statement usually precedes some form of punishment. As adults, we understand there are consequences for our actions, good or bad. However, a lack of facts or failure to understand a situation can result in "the rule of unintended consequences."
In the payments world, this rule can be defined in multiple ways. But at some point in our careers, most of us have experienced a situation that led to an unintended consequence.
One reason the Payment Card Industry Data Security Standard is the topic of the day is because of unintended consequences. For example, when an ISO downloads data onto a computer to analyze processing patterns, the result can be stolen consumer data and a company closure.
Also, every experienced merchant level salesperson (MLS) can tell a story of a sales effort that resulted in lost revenue, lost time or worse - lost reputation. However, MLSs can reduce or even eliminate unintended consequences by following three simple guidelines.
Two common examples of long-term costs that only provide short-term benefits are bonus programs and the practice of offering questionable or incomplete information to merchants when boarding their accounts.
Many contracts involve upfront bonuses for signed merchants, free equipment and other initial monetary incentives. These offerings have a cost to the provider, and that cost usually comes from the MLS's long-term earnings. As such, they have a short-term benefit but have significant long-term impact to ongoing revenues.
When considering any partner, first consider your short- and long-term goals and needs. For example, do you absolutely need upfront bonuses? If so, how will your long-term goals be affected? On the other hand, can you afford to not receive a bonus knowing that the long-term revenue will be higher, making your portfolio more valuable?
This same guideline often comes into play when signing merchants. Thousands of sales training programs teach how to parse words so that a negative can be overcome - without actually disclosing the negative.
However, since the best merchant relationships are lasting ones, avoiding an issue could result in a short-term signing but have significant long-term consequences to your residual income and your reputation. Be honest and explain the challenges you see in meeting merchants' requests, but also explain what you can do to help.
The payments industry is aptly described as complex and ever changing. Even the most experienced people come across things they do not know. Most MLSs have success at the beginning of their careers when their knowledge about the industry is rudimentary. They admit they don't know the answer to every question. However, as they learn and grow, they often try to use their knowledge to answer every question, even when it might not directly apply to a given situation, rather than admit they don't know the answer to a difficult question.
The consequence can be fewer sales and unhappy customers.
It's OK if you don't know the answer to every question your customers ask. Remember, it's how you respond that has the potential to create an unexpected consequence. Use this sentence whenever you doubt the answer to a merchant's question: I don't know, but I will find out and get back to you.
People will respect your honesty as well as your answer. Just be sure to respond quickly.
Everyone in the industry needs a mentor, someone who can answer questions when they arise and serve as a sounding board. Your mentor should be accessible, knowledgeable, forthcoming about what he or she doesn't know, and devoid of a personal agenda beyond helping you succeed.
In most cases, your mentor should be one of your processing partners. Your partners know their success is conditioned upon their willingness to help you succeed.
Before partnering with someone, ask specific questions about support. Who provides support? Who answers questions when you have them? If you have grown comfortable with the individual negotiating the contract, ask that person if he or she will stay involved with you after you sign.
If the responses to your questions seem vague, don't assume the individual can become the mentor you seek. Choose a different partner or find another person who can serve in this role.
Failure to thoroughly research the support functions of your processing partnership can result in your being unable to find the answers needed or the training required for you to grow professionally. The unintended consequence of this can be devastating financially.
Follow these three guidelines; the consequence may be higher revenues than you imagined.
Jeff Fortney is Director of Business Development with Clearent LLC. He has more than 12 years' experience in the payments industry. Contact him at firstname.lastname@example.org or 972-618-7340.
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