By Jeff Fortney
In a recent conversation with a sales agent I was asked, "How much value do you put on a merchant signing?" I replied, "Very little." That surprised him. He asked why I felt that way. His position was that the signing was a successful sale, and there should be some value to that. The rationale for my simple response was that signing a merchant is just a step in the sale. There is no value until the merchant begins processing and continues to process for a period of time.
As the conversation ended, I considered the topic and his confusion. I realized there is a concerning misconception regarding what constitutes a successful sale in the payments industry. The dictionary definition of a sale is "the exchange of a commodity for money." Simply put, the signing of a merchant is just a step toward a successful sale.
Until you actually make money there is no success. Consider that the sales process comes with a cost either directly or indirectly. A monetary gain is only seen after those costs are offset. And that monetary gain may take months to see, as the revenue earned may take time to reach a gain over costs.
In some cases, it may take up to a year, especially if there is a bonus involved. Many bonus programs have claw-back rights for up to 12 months.
This is why retention has become a hot topic in the payments world. Retention has always had value, but in an unsettled marketplace and with the pervasive insistence caused by only selling cost savings, its importance has magnified. If the attrition rates stay at their current pace, I have no doubt many payment companies and ISOs will fail.
Retention efforts, at a corporate level, are beneficial, but they don't address confusion or the root cause of attrition at the initial sales process. At the absolute beginning, you must intentionally address the potential of attrition and plant the seeds of retention.
It begins by making internal changes first, that is, ones pertaining to your mindset and preparation. These steps aren't new, but unless addressed, it will be impossible to address the external steps.
The external process begins at the time of signing. Once a new merchant is signed, it is imperative to explain the next steps at that time, not later. Walk your new customer through the submission process, the departments involved (don't forget to include the download builds) and the time each step will take.
Here's an example of what I mean. Personalize it to fit you:
Let me explain the next steps. Your agreement will be submitted and boarded. Underwriting will have to review, and once approved, a download will be built for your system. At that point, your system will be downloaded, and you will be ready to see the benefits we discussed. This total process can be as short as X or as long as Y.
Finally, ask this question in your own words:
May I share my greatest fear? After we get you up and running, someone or something will influence you to not use our services. I fear that you won't reach out to me personally at that time. Is there any reason I should have that fear?
This one question plants the first seed of retention. Even if there are struggles in set up, or issues arise, the merchant will feel you are his or her advocate. All you need to do is tend to this seed, and let it take root.
If you do this correctly, your merchant retention will grow, as will your ongoing return on your merchants. Signing alone does not create the return; it's just one step in the journey.
Jeff Fortney is a Payments Professional with over 25 years in the payments world. He can be reached at 972-618-7340. His email is firstname.lastname@example.org.
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