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Table of Contents

Lead Story

Interchange under attack

News

Industry Update

New Visa, MasterCard fees stir debate within industry

Researchers say encryption doesn't always work

Kaplan an ideal fit for TMS

Selling Prepaid

Prepaid in brief

Into Africa with Obopay

Has mobile prepaid RDC finally arrived?

Views

Our industry has been invaded: What will you do?

Jeff Brodsly
Chosen Payments

Education

Street SmartsSM:
Remember your partners

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

Are you selling rate, a solution or both?

Jeffrey Shavitz and Adam Moss
Charge Card Systems Inc.

Differentiation, the pricing-squeeze terminator

Peggy Bekavac Olson
Strategic Marketing

How ISOs and MLSs can use Pinterest

Alan Kleinman
Meritus Payment Solutions

When warm leads become elephants

Jeff Fortney
Clearent LLC

Company Profile

Complete Merchant Solutions LLC

New Products

An intelligent PCI compliance manager

TrustKeeper PCI Manager
Trustwave

Inspiration

Cultivating your own device-free zone

Departments

10 Years ago in
The Green Sheet

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

March 12, 2012  •  Issue 12:03:01

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Differentiation, the pricing-squeeze terminator

By Peggy Bekavac Olson

Merchant acquirers, ISOs and merchant level salespeople (MLSs) struggling for growth share a common complaint: they have a hard time signing new merchants because they're up against other firms willing to sell the same services at lower prices. They're frustrated at always having to sell on price. Their businesses are reeling from razor-thin margins and the constant downward spiral of price compression.

No matter what you charge for transaction processing and related support services, a merchant prospect will routinely be promised comparable services for a lower price by the next MLS who walks in the door. So if you're serious about growth, what should you do to overcome this challenge without resorting to lowball pricing tactics?

Heed buyer behavior

First, understand the buying behavior of merchants seeking transaction processing services. Intuitively, you know you can't expect them to pay you more than they pay the competition for similar services.

When merchants believe that two or more vendors are basically the same, they will consistently select the lowest priced. So, if the only differentiating factor between your business and the competition is price, merchants will always choose the cheapest option.

Set yourself apart

When you give merchants good reasons to do business with you, you rise above competing solely on price. The key to success is to differentiate your products, services and company in the minds of potential merchant customers. In differentiating your company, you provide value that others do not. Take time to identify your company's core strengths and determine how you bring value to merchants.

Deep soul-searching is often required to figure out what makes your business, as well as your products and services, unique and special to buyers. You need to understand and identify what factors your company brings to the table that no other company can or does.

Take the necessary steps

Unfortunately, understanding your value and identifying or creating true differentiation aren't exactly easy. Here's where I hope I can provide some help. Although, you will likely find countless ways to differentiate your business, following are several methods to help you quickly distinguish yourself from the competition.

Probe and speak up

Again, the ways to provide differentiated value to merchants is infinite. Your success lies in understanding how, to the buyer, you're unique and better than the competition and then effectively communicating these attributes to prospective merchants.

When making statements about the value you deliver, explain how or why what you say matters so you don't end up sounding trite or like others making similar claims. Buyers want to understand what the message you bring really means to their businesses and how it is different from others spouting the same messages.

So if you're struggling to win new business and battling the competition over price, examine your company and your offerings to make sure you're differentiating. Once you understand how you're unique, don't be shy about telling merchant prospects how you stand head and shoulders above the competition. It will propel them to choose your organization as the one they want to do business with and thereby help you drive sales.

Peggy Bekavac Olson 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. She can be reached at 480-706-0816 or peggyolson@smktg.com. Information about Strategic Marketing can be found at www.smktg.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Super G Capital LLC | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems