GS Logo
The Green Sheet, Inc

Please Log in

Banner Ad
View Archives

View PDF of this issue

Care to Share?


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

Skyscraper Ad

The Green Sheet Online Edition

March 12, 2012  •  Issue 12:03:01

previous next

When warm leads become elephants

By Jeff Fortney

At some point, one of your colleagues or merchant customers has probably given you an "in" with a major merchant by saying something like, "I can get you an appointment with X, the chief executive officer of Y. They sell millions each year. You can probably help them."

Initially, it sounds like an exciting opportunity. It would be a major signing, and - of course - at your price, it would be very profitable. It's like a warm referral, right? After all, the merchant will be more likely to sign with you because you have an inside contact, right?

Your contact even sets up the appointment, and you expect the merchant to sign. However, when it comes to landing high-volume merchants, expectations and reality are often far apart.

Here's how the conversation with the CEO usually plays out:

The elephant hunt

Steve doesn't know you or your friend. He knows his boss introduced you, but he has little idea why. He likely isn't thinking about payment processing and has other items on his desk.

Your task is to convince him to consider changing payment processors and to get him to provide enough information so you can determine how to price the opportunity. To him you're just another salesperson, and the process for this warm referral has transitioned from quick to lengthy.

I'm not saying elephants are impossible to sign, nor am I suggesting you chase them. However, if you do consider chasing an elephant, even one that came from a warm referral, you must first fully consider the necessary commitment, your expectations and the potential cost of the effort.

Commitment

Chasing an elephant requires a significant commitment of both time and energy. High-volume merchants never close with just one call, and in some cases, the sales cycle lasts as long as nine months.

You will need to attend multiple meetings, make various presentations and spend time analyzing and preparing a proposal. (Yes, most elephants will insist on a proposal.)

Your time commitment alone will be extensive. Remember, this is time you won't be able to get back. Plus you'll be pulled away from your other selling activities.

Expectations

Elephants are all about margin. In essence, don't expect the same return that you receive from an average merchant in your portfolio.

Most who will consider moving their processing relationships will want to go through a full request-for-proposal process as well. This also holds true for publicly traded companies.

When chasing an elephant, you'll find the ultimate decision is more about price than friendship. In other words, you must be competitive on price even if it's your brother's or sister's company.

Cost

When deciding to embark on an elephant hunt, you're also making a commitment that will take you away from the bread and butter of your business. That's why it's important to determine if the journey is worth your investment. Here's how you can see if it's worth your time and energy:

Consider the following example. If you close two out of every 10 calls, and you make five calls an hour, that means you generally close two deals every two hours. Now calculate the time commitment for your elephant, and include the time necessary for research and documentation. That will tell you the cost of the hunt.

If the value of your lost sales time is less than the return you can make from the elephant, the hunt might be worth your effort. However, one very critical component isn't addressed in this calculation: not all elephants sign. In fact, the majority will not sign with you. This means that even after all of your time and effort, the reward may go to someone else. There is no second-place ribbon. It's an all or nothing investment.

Before you jump in, ask yourself if you can afford an investment that may likely generate no return whatsoever. Sadly, I've known many who didn't ask this question, and all they had to show for their efforts nine months later was an impressive, but useless, bound presentation.

If you find you're not prepared for such an exhaustive commitment after being walked down the hall to meet "the man in charge," don't be afraid to say so.

Jeff Fortney is Vice President, ISO Channel Management with Clearent LLC. He has more than 17 years' experience in the payments industry. Contact him at jeff@clearent.com or 972-618-7340. To learn about how Clearent can help you grow faster and go further, visit www.clearent.com.

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

previous next

Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | IRISCRM.COM | Humboldt Merchant Services