For years now, we have published articles in this magazine about the need to shift from selling on price to providing value. Experts speaking at events throughout the payments and fintech sphere have been doing the same. Despite this, some ISOs and merchant level salespeople (MLSs) still make quick sales to merchants eager to save a buck, whether or not those merchants save a penny in the long run.
In his Street SmartsSM article "How do you measure success?" The Green Sheet, Jan. 28, 2019, issue 19:01:02, Steve Norell spoke to this problem. "The ISOs that do heavy online recruiting and followed by a six-hour online training session, and then provide appointments that are poor, at best, only care about one thing: getting these poor neophytes out the door and writing deals," he wrote. "It's all about getting the merchant to sign the app because the ISO lowered their pricing and allegedly saved the merchant money. … Despite the fact that our industry has morphed from this model, much to the surprise of many, it is still being used by ISOs, albeit less and less."
Overall, however, after considerable effort on the part of professionals through the industry, the word has gotten out that not only is it a good idea to focus on value, it's essential to remain competitive in an increasingly disrupted payments landscape.
It's not just our competitors who may outsmart us; it's our merchants, too. Long gone are the days when ISOs and MLSs were merchants' only source of information on payment processing. The Internet changed this dynamic ages ago.
Now, big data brings merchants even more power – and not just for understanding customers' behavior. As the concept of providing value continues to gel, merchants are getting better at determining specifically what they want from us in terms of quantifiable improvements our products and services can to provide. In Value as a Service: Embracing the Coming Disruption, business consultant Rob Bernshteyn described an example of quantifiable improvement as, "this much saved, this much improvement in lead generation, this much improvement in revenue, and this much improvement in employee retention."
To meet a new breed of better-informed merchants, we must become adept at quantifying the value we bring to the table. We are value-as-a-service (VaaS) providers in addition to providers of hardware, software, processing and all the customer service activities associated those things. We can't merely say a particular POS system will make a business more efficient and offer a couple of general examples of how this might work. We need to explain exactly how we will increase efficiencies and boost profitability. The specifics of VaaS offerings will vary merchant to merchant and vertical to vertical. Ideally, the value provided will not be a one-time thing, such as eliminating one paid position, but an efficiency that will continue to pay benefits long-term.
So, how good are you at quantifying the value you bring to your merchant customers? They will to want to know with more specificity than ever before. It will pay to be prepared.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.Prev Next