The Green Sheet Online Edition
June 14, 2010 • Issue 10:06:01
The art of cross-marketing: How to maximize existing client relationships and boost sales
I've had the honor and privilege of serving our industry during the past few years as a member of the Electronic Transactions Association's Annual Meeting Program Planning Committee. The committee is charged with determining the overall format of the conference, selecting a keynote speaker, and planning and organizing the many plenary or breakout sessions held throughout the conference.
During this April's ETA Annual Meeting & Expo, you couldn't help but notice the upbeat atmosphere. Attendees and vendors in the payment chain believed that we, as an industry and as a country, are starting to see real signs of economic recovery.
That got me thinking about one of the plenary sessions that I was directly involved in, "The Art of Cross-Marketing: How to Maximize Existing Client Relationships and Boost Sales," and how value-added products and services can help fuel business recovery by jump-starting sales for merchant acquirers, ISOs and merchant level salespeople (MLSs).
The value of cross-selling
It's common knowledge that selling to an existing customer is much easier and costs far less than new customer acquisition. Cross-selling value-added products and services provides an easy and realistic means of increasing revenue from your existing merchant base. These solutions also help you strengthen your business by providing new sources of income and profit while diversifying revenue streams.
Value-added solutions also allow you to address two of the top issues acquirers, ISOs and MLSs face in their businesses: merchant attrition and margin compression.
Complementary value-added solutions that meet real business needs strengthen customer relationships and improve loyalty and retention. There is a direct correlation between the number of products and services your merchants use and their "stickiness." The greater your product and service penetration, the less likely merchants are to turn to your competitors. Also, their supply chains are simplified by dealing solely with your company rather than several other vendors.
Value-added products and services help you differentiate your business, which is especially important since payment processing today is frequently viewed as a commodity service. The conversation during the sales process shifts from talking solely about price to discussing the benefits merchants can derive from value-added solutions such as increasing sales, improving cash flow, reducing costs, streamlining processes and mitigating risk.
Single relationships, based solely on delivering credit and debit services to merchants, are inferior in every way to multifaceted relationships built on the delivery of value-added solutions.
The range of products and services
Today, a spectrum of value-added products and services is available for you to offer your merchants. Traditional applications - from check verification, gift cards, prepaid phone cards and loyalty programs to age verification, time and attendance, payroll, and electronic bill payment - are already attractive to many merchants and payment services providers.
Some of the more recent entrants and opportunities include dynamic currency conversion, remote deposit capture (RDC), online banking e-payments (OBeP) via automated clearing house payments, Payment Card Industry Data Security Standard compliance programs, chargeback and data breach insurance, merchant cash advance, and e-mail and mobile-based marketing programs.
Opportunities even exist to sell unconventional value-added solutions like professional services: think prepaid legal and health care referral services, computer support and repairs, and financial services.
Helping you compete
In the Aite Group LLC report Acquisition and Retention in Today's Merchant Acquiring World, merchant acquirers and ISOs surveyed indicated that revenues from value-added services made up about 15 percent of annual revenues in 2007 and that they expect this to almost double by 2010.
Value-added products and services help you compete, but how do you make money with these solutions? Many value-added solutions that run in conjunction with payment applications produce additional transaction and service revenue for your business when implemented. Others help generate referral income and residuals.
Some value-added solutions employ a revenue-sharing model, making them even more attractive to you and your merchants. Another Aite report, Merchant Acquiring in 2010: A Preview, revealed that 67 percent of merchant acquirers and ISOs surveyed indicated they are "somewhat" to "very likely" to invest in new products and services and cross-sell during 2010.
So let's go back to this spring's ETA Annual Meeting & Expo. More than 100 conference participants attended "The Art of Cross-Marketing" plenary session, which profiled RDC, OBeP and chargeback and data breach insurance.
Speakers gave an overview of each value-added solution, identified the market opportunity and target markets, and discussed how to approach prospects and communicate key benefits and solution value. They also defined revenue potential for acquirers, ISOs and MLSs and how to successfully implement these solutions.
Creating cross-selling campaigns
How do you choose which value-added products and services to offer from the myriad available, and how do you create effective cross-selling campaigns? Here's some guidance to help you through the process:
- Develop a cross-selling strategy and choose wisely: Know where your business is going and choose value-added products and services that match your goals and objectives. You can't be all things to all merchants, so focus on what you're good at and what makes sense to complement your business.
With the increasing number of value-added solutions available and the cost of their introduction, rollout and ongoing sales effort, it's critical to offer only the most important products and services for your business.
- Create tactical plans: Tactical plans for each value-added solution you offer are a must. These plans should align with your goals as well as your budget.
- Develop clear and concise value propositions: Focus on the customer, not on pushing a value-added solution. Customers need to know how useful your product or service is, and you must address or solve their problems. Tell them why they need it in a to-the-point and convincing way.
- Train and provide an incentive: These two items are perhaps the most critical elements for effective cross-selling. Your sales teams need proper education and the motivation to sell. If they don't understand the value-added solution or how they will be rewarded, they won't succeed in selling.
- Track progress: Measure campaign effectiveness and don't be afraid to make adjustments along the way. Don't forget to track product penetration for all the value-added solutions you offer so that you know where you're hitting and where you need to improve.
- Focus: Stay focused on your goals so that you don't get derailed or sidetracked onto another initiative.
- Analyze results: Document both successes and failures, and use these lessons to develop even stronger programs.
New value-added solutions address market opportunities as well as meet merchant needs and expectations. These value-added solutions can increase your revenue, strengthen merchant loyalty, improve customer value and make your business stand out from the competition. Which ones will you use to propel your business in this time of economic recovery?
Peggy Bekavac Olson recently founded Strategic Marketing, a full-service marketing and communications firm specializing in financial services and electronic payment companies, after serving as Vice President of Marketing and Communications for TSYS Acquiring Solutions for more than five years. She can be reached at 480-706-0816 or email@example.com. Information about Strategic Marketing can be found at www.smktg.com.
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