By Tom Waters and Ben Abel
Bank Associates Merchant Services
In the world of commerce, it is common for businesses to borrow successful models from neighboring fields. By following the traditions of supply-chain management, growth marketing, employment culture or any other constructs of a successful business model, we can stand on the shoulders of giants and take our companies to higher levels.
Green Sheet Online MLS Forum member VZAGUY11 posed an insightful parallel of the merchant services industry to insurance sales. Big, brand-name insurance companies invest heavily into key salespeople, facilitating the growth of new branches bearing their logos across the country. The question posed by VZAGUY11: Why can't the credit card processing ISOs help their sales offices grow with this model?
Large insurance companies spend money to build the brand, which benefits the local branches. They pay for customer relationship management software and contribute toward marketing, and will even provide small loans to help bolster initial growth during the early phases of hiring and firing or acquiring office equipment. In return, the endorsed agent receives a smaller share in the profit; however, the trade-off appears to be very fair and very successful for their industry.
So what are the barriers that disallow merchant service firms from applying similar partnerships? MLS Forum members responded.
JEH1003 was quick to express that the similarities between our industries are superficial, and the differences are much more glaring. "I think the primary reason we don't function that way as an industry is the fact that there are no barriers to 'being a credit card guy,' and the contracts are not guaranteed," JEH1003 wrote. "It makes it even tougher to take a chance on a guy/gal when the accounts they are writing could be gone three months from now."
In a previous article, we outlined the difficulty of implementing a professional standard in the merchant services industry. Insurance agents have clearly defined exams that separate professionals from enthusiasts. Forum member Steve Norell commented, "The reason this model works IMO (in my opinion) is because the insurance industry is regulated, and as we all know, ours is not. They have rules, regs and safeguards in place. All the things that we don't."
Other members expressed a more optimistic view of the business model. Forum member CardPlayer mentioned that the big insurance agency "is willing to invest" because insurance agents have "already invested in them."
These types of agent endorsement deals are also available in merchant services, "they are the exception rather than the norm," CardPlayer said. "If you wanted to do a deal like this, I would bet any of the ISOs that post here on the GSF would make this deal with you if you were willing to make a significant commitment in return. That would include exclusivity for that ISO and production targets. If you want to find a serious partner, you need to be a serious partner. Nobody is going to offer this to you, but it's there if you ask for it."
While the existing insurance model is available and warrants a large upfront expense from the ISO, there are other similar variants of ISO setup that are very helpful to merchant level salespeople (MLSs).
VZAGUY11 offered the following list that encapsulates his vision of a true partnership model:
Industries that are similar will find that successful models can also be similar. The key to adopting a successful relationship is to find flexibility with new partners and adapt your programs to what makes sense for everyone involved.
Tom Waters has been dedicated to the merchant service sales profession since 2001. Currently, he is responsible for cultivating relationships with entrepreneurs in information technology, accounting, sales and marketing in his role as Sales Director of Bank Associates Merchant Services www.bams.com). Using fresh and matter-of-fact training methods, Tom has contributed to the success of thousands of agents, affiliates and clients. He can be reached via email through firstname.lastname@example.org or via phone at 347-651-1065.
Ben Abel is Regional Director at Bank Associates Merchant Services. Since joining the team in 2006, he has risen through company ranks with a paradigm that his success was measured by the success of those around him. Ben is a dedicated, pioneering trainer whose methods of merchant services consultation have helped many agents expand their portfolios in terms of processing volume, deal count and profitability. He can be contacted at 347-866-9571 or email@example.com.
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.Prev Next