By Aaron Nasseh
Merchant services is by far one of the most promising and dynamic industries to be involved in, and we are fortunate that it also offers residual income. As ISOs and merchant level salespeople, we work hard in order for our residuals to increase month over month. However, to maximize residual growth, we must learn to manage its enemy: attrition.
Attrition is a nasty word in our industry because it's synonymous with loss of income. In fact, the average annual account attrition is approximately 21 percent. Nevertheless, it doesn't have to be so. The first step in minimizing attrition is to make sure your sales process is one that supports a lower attrition model. In this article, I offer five simple tips to help minimize attrition immediately so you can better protect your hard-earned residuals.
Are you or your sales agents neglecting customer care and hoping your prices are enough to keep your customers? If so, you are most likely to have a higher attrition rate because it won't be long before a competitor comes along to offer your merchants additional savings, and since there are neither stellar customer care nor tailored value-added products and services to prevent merchants from leaving, they will likely switch to your competitors.
Merchants will continue to play this game as the race to zero plays itself out. Additionally, selling only on price breeds poor salespeople who have little to no actual selling skills. This will unquestionably have an impact on your bottom line.
If you are still caught up in offering a free countertop solution, consider migrating toward a more sophisticated POS solution. Why, you ask? Because countertop solutions may easily be switched to a competitor's platform with a simple reprogram. Even if you lock the device, your competitor is likely to offer your merchants a free replacement. So countertop terminals do not provide the merchant with enough incentive to stay with you. However, offering your merchants proprietary POS systems will drastically combat this.
Also, a good POS system will enable your merchants to operate entire businesses through the POS system. This includes tasks from taking orders and managing inventory to clocking employees in and out, and everything in between. The extent of features offered by such POS systems is often more than enough to persuade a merchant to remain a loyal customer of yours.
Most merchants value running their businesses efficiently more than they value a small savings offered by your competitors. And best of all, when you have placed a proprietary POS system with a merchant, no other processor may reprogram the system. A good POS portfolio has an average annual attrition rate of only 5 percent.
Many sales agents fall in love with the idea that since they are in sales, they should not have any role in customer service. That might be OK if you are not in a residual-based business, or if you don't care about whether you have a high attrition rate, but the reality is that we are in a residual business, so you must make some time to be there for your merchants. Otherwise, you risk losing that recurring revenue.
Contrary to popular belief, merchant services is not a one-time sale. Merchants must be sold every single month in order to stay with you. I am not advocating that you become a full-time customer service representative for your merchants. I'm simply suggesting that you make yourself available, return calls and ensure that the proper department is handling each merchant's issue.
Most of the time, simply returning a merchant's call in a timely manner will make the difference between retained revenue or income lost. I recommend dedicating a short time in the morning and again in the afternoon to returning all customer service calls. Then the rest of the day will be available for you to obtain new business.
Nothing I mentioned above matters if you are not transparent with your customers. I cannot emphasis enough the importance of this step, because if your merchants feel that you have misrepresented something, rest assured that you will lose that business.
Aside from the fact that misrepresentation is a very unethical practice, we are in a recurring revenue industry, so it's also not beneficial to the long-term growth of your business. Being transparent simply means making sure that merchants understand what rates and terms they are signing up for, as well as not making promises that you cannot keep. It sounds like a simple step, but I've found this to be challenging for many salespeople.
Last but not least, feel free to check up on your merchants regularly just to make sure that they are happy with their service. Don't always wait for the merchant to contact you when there is a problem, and don't assume that because you haven't heard from a merchant that everything is running smoothly. Take the initiative. Call your merchants monthly or quarterly just to check up on them. This will demonstrate to the merchants that you are dedicated to service and that you are simply a phone call away should they need you. You will be amazed at the power of this simple step.
I am confident that if you and your team commit to turning these tips into actions, you'll find your attrition rate shrinking. Better yet, you'll benefit from some positive word-of-mouth marketing among your merchants that can generate new accounts. Don't underestimate what a few tweaks can do for your ISO.
Aaron Nasseh is the founder and Chief Executive Officer at Finical Inc. His extensive sales and management experience includes having previously served as the General Manager of CardPayment Solutions and Vice President of Sales at iPayment Inc. He may be reached at firstname.lastname@example.org or at 818-330-4055.
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