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Table of Contents

Lead Story

Economic hang-ups: Will payments wilt?


Industry Update

Visa shoots for largest U.S. IPO ever

Vermont interchange bill a cry for help

Interchange act coming back stronger

TSYS joins the mobile fray

Data Treasury: Billions in the balance


Jim McMahon

ATMs and a changing biz model

Travis K. Kircher

Optio Solutions LLC. - Kinder, gentler collections

Recessing, depressing economy


Card stripes, prison stripes - security required

Biff Matthews
CardWare International


Street SmartsSM:
Biting the ISO that feeds it

Dee Karawadra
Impact PaySystem

Shower candidates, grow your ISO

Curt Hensley
CSH Consulting Inc.

Secret's out: How to snag merchants

Maxwell Sinovoi
United Bank Card Inc.

PIN-ing profits

Scott Henry

Annihilate attrition

Jeff Fortney
Clearent LLC

Setting the stage for stupendous sales

Daniel Wadleigh
Marketing Consultant

Company Profile

Cutter LLC

New Products

Brand protection the Teleblock way

Teleblock Do-Not-Call Blocking System
Call Compliance Inc.

Software for streamlined processing

Company: NitroSell


Here comes the sun - and the dust pan





Resource Guide


A Bigger Thing

The Green Sheet Online Edition

March 10, 2008  •  Issue 08:03:01

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Annihilate attrition

By Jeff Fortney

A merchant portfolio earning significant residuals is the gold standard for all independent merchant level salespeople (MLSs). It is an ongoing revenue stream and a valued asset. It is why most decide to venture into the payments arena.

Building this portfolio is hard work. It requires consistent effort, a thick skin and the ability to communicate clearly. As it builds, the rewards are tangibly evident. Yet, as these portfolios start to grow, a slow, but persistent, attack eats away at the returns. This enemy is attrition.

Attrition is as unavoidable as the scourge of age on the body. If this inevitability is just passively accepted as a part of business, the effects can be devastating.

For example, major processors strive for an attrition rate of 20% or less. For them, that is an acceptable level of loss. Ask yourself, though, could you handle a 20% loss in income?

Unfortunately, most MLSs have little or no grasp on what causes attrition. It takes a sudden loss for them to ask, what happened? There are two principal types of attrition:

  1. Organic attrition: This occurs when a business closes or is sold.
  2. Competitive attrition: This occurs when merchants perceive they will receive better service or will substantially reduce costs with someone else.

Although organic attrition can be expected, merchants who sell their businesses should be considered as potential retention targets. Even so, the majority of retention efforts must be targeted at competitive attrition.

Start at the close

The key to fighting attrition is to start the fight before the first merchant leaves. This begins at the sales closing.

During the signing process, it is imperative that you establish expectations beyond the immediate future. Make it clear to your customers that they will be courted by many.

Ask them to promise to call you should they ever be tempted by a competitive offer. Then promise them you will stay in touch. These two efforts are linked; it's the relationship that matters.

As your portfolio grows, you should spend 5% of your time contacting and maintaining relationships. Stop by merchants when you are nearby just to check on them, not to sell upgrades or more services. Be visible, and remind them at every opportunity that you are there for them.

During the initial stages of your career, you may find you are able to see your clients monthly. As your portfolio grows, however, it will be necessary to reach out in alternative ways. These may include mailers, phone calls and other contacts that do not require face to face meetings.

Require data

Even though you may be building positive relationships, situations often arise that can result in merchant loss. These can be salvaged if they are discovered very early. The key is data access. You must have access to frequently updated processing data. It will be the key to retaining merchants.

This hinges on your processing partner. The selection of a processing partner should not be based solely on what you will earn, but also should include a discussion on data access.

Without timely data, initial retention efforts have no chance for success. You must have at your fingertips daily batch information and historical data relative to merchants' processing volumes.

Ideally, reporting should include identification of merchants who may be at risk. This can be provided in varying forms, from list notifications to graphical analysis.

Bottom line: If your partner does not provide you key information on your portfolio, your partner must be responsible for identifying potential attrition situations.

If the company is unwilling to take that responsibility and refuses to give you access to data, you will be fighting the attrition battle with a squirt gun.

Spend 5% of your time reviewing this data, looking for abnormalities in processing volumes. Once identified as at-risk, merchants should be immediately contacted. You must be clear that you have seen a decline in processing and are worried.

Be blunt. Ask if there are any problems. If the answer is no, then ask them specifically if they are switching to another service provider.

During this conversation, be open to discussing and comparing costs. Don't immediately agree to match the offer they have received.

Talk about the costs of conversion, and if you have an early termination fee in your contract, remind your client that the processor would likely be assessing a cost for termination. You can reduce your rates, but there is value in what you do. Don't give that value away.

So, budget 10% of your daily time on these retention efforts. Then spend the rest of your day on sales activities, building your portfolio and replacing the few who leave due to organic attrition.

Attrition is a part of the business, but by executing a retention plan early you can keep it low. MLSs who have recognized the need to battle attrition have seen it drop to as low as 5%. The rewards are great, the effort minimal - if you start today.

Jeff Fortney is Director of Business Development with Clearent LLC. He has more than 12 years experience in the payments industry. Contact him at or 972-618-7340.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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