The Green Sheet Online Edition
July 11, 2016 • Issue 16:07:01
Taking stock at mid-year 2016
The year 2016 was going to be the year you would do all the right things and implement new strategies to grow your portfolio now and well into the future. You changed your approach, had faith in your endeavors and took decisive actions to build a solid portfolio of merchant partners. And it all started on January 2.
You didn't see success immediately, which wasn't unexpected, but then nature intervened. Depending on your location, you may have received torrential rain, unprecedented blizzards, devastating tornadoes or blighting drought. In addition to forces of nature, numerous changes within the industry have impinged on new marketing efforts. So your best-laid plans were impeded. And your results reflect it.
Now it's mid-year, and your results aren't what you wanted. What do you do? Do you consider the changes you made failures? Do you revert to what you did in previous years? Every year about this time I am asked these questions. In almost every case, my reply is the same. I ask ISOs why they made the changes, and if those reasons are still valid. Usually the answer is yes. If they remain concerned, we usually talk through what I call the 10 most common mistakes made when selling payment services.
Mistakes to avoid
You may be among those who are frustrated by your progress so far this year. But before you make changes, review these common mistakes that can have a huge impact on your business growth and bottom line:
- Selling cost savings: Cost savings may have a place in the sale, but it can't be the only reason a merchant signs. When you squeeze your margins so tight you are training the merchant to only value price. This means the next rep who walks through the door selling savings will most likely take your merchant.
- Looking for shortcuts: We all want to find the easiest way to sign merchants. But sales is a hard profession no matter what industry you're in. However, you can take steps to improve your chances. Keep in mind that spending considerable time looking for shortcuts is time that could be spent selling. Remember, if there were a shortcut that truly worked, everyone would be using it.
- Selling what you want them to buy, not what merchants need: Identifying a merchant who has a need you can meet is the first step to a signed application. But if you sell only what is best for you and not what the merchant needs, you'll find yourself with an unhappy merchant, as well as one who will leave when a provider who truly focuses on the merchant's needs comes along.
- Placing blame: "It's my fault. I am just not working hard enough." or "It's their fault for doing X" (with their being the current ISO partner, merchant or competitor). Rather than looking for someone to blame, cut your losses and move on. You can't change the past, but you can control what you do going forward, so start now, and don't look back.
- Not seeking knowledge: Our industry is ever changing. Many of these changes are published or communicated by your industry partners. Ignoring them could put your efforts and the success of your business in jeopardy. Seek out topics, trainings and conversations with your ISO partner or mentor about what's new and how it impacts you.
Committing "assumicide:" Assumptions are dangerous. I do my best to never use the word "assume." Make choices based on all the facts, not on assumptions. For example, if something is listed as an interchange fee, it would be easy to assume it's just a pass-through expense. However, that would be a dangerous assumption today because padded fees are so common.
- Ignoring your existing merchants: Your goal is to build a profitable book of business, one that earns solid returns year after year. Be careful that your focus on selling to new merchants doesn't come at the expense of your existing portfolio. Stay in regular contact with your existing merchants whether it's by in-person visits, phone calls or sending them various email communications such as newsletters, etc. Remember, while you're busy talking to a prospect, someone might be talking to your current merchant client.
- Reacting out of panic: Panic interferes with success, as it often prevents you from walking away from a bad deal. Even if you have a dry spell, don't panic. Doing the right things will eventually lead to positive results. Panic typically leads to an underpriced merchant or an unhappy one because you over promised.
- Ignoring the fine print: There is fine print in almost everything we do, even if it's not explicitly written. For example, your Schedule A may have one or two lines that initially attracted you to your partner, but is the totality of the schedule as good as those two lines? Are there fees you aren't sharing in that result in your costs being higher? "Trust but verify" should be your mantra.
- Undermining loyalty: This occurs both at the merchant level and at your level. Say, for example, you get a call from a merchant who has been a long-term partner. You either provide a cursory answer, or don't return the call for several days. Or perhaps you have a good ISO relationship where you are treated like a true partner, but you are constantly seeking better pricing elsewhere, or treat the ISO like a vendor. In the first example you are bound to lose revenue, as the merchant will most likely leave. In the second example, you are missing out on valuable support, or worse, you may sign an inferior relationship that will end up hurting your business in the long run.
You made changes at the beginning of the year based on your desire to increase your revenue and grow a healthy portfolio. It's always wise to check up on the overall health of your plan, but be aware of the mistakes commonly made, and adjust accordingly. You will be glad you did, as you'll be one step closer to your business goals.
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 email@example.com or 972-618-7340. To learn about how Clearent can help you grow faster and go further, visit www.clearent.com.
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