By Marc Beauchamp
As 2019 closes out, you may want to consider new ways or strategies to distribute your products and services. Are you stuck selling and marketing to the same hyper-competitive merchant categories? Are you thinking out of the box and testing unique marketing strategies your competitors aren't?
With COVID-19 remaining with us for the foreseeable future new innovative strategies and tactics need to be deployed to attract, qualify and convert more merchants. The status quo will not get the job done.
If you're not getting the results you want, consider expanding your distribution channels. What do I mean by distribution channels? Distribution channels are independent avenues that facilitate the sale of your products and services. Think about how merchant services are traditionally brought to market: banks contract ISOs who in turn contract merchant level salespeople (MLSs) to sell their wares. In essence, an MLS is a distribution channel for the ISO.
Software is another example of an industry that relies on multiple distribution partners. Software companies use value added resellers (VARs) to sell, install, train and maintain their product offerings. The majority of B2B companies utilize multiple distribution or indirect sales channels.
Implemented correctly, new, independent distribution channels can be powerful sales drivers for your company. What's attractive about creating indirect sales channels? It can quickly impact the bottom line while keeping selling expenses to a minimum. And in most cases, the product is complementary to what your distribution partner is already offering to its existing client base.
The five steps to landing and empowering a new distribution channel are to identify natural partners, develop their role in the process, set clear expectations, develop and deliver training, and create a sales support system. I'll explain each in detail.
The most important step in the process is identifying the best potential partners. Ideally, you are looking for people selling, recommending or serving your target merchant. For example, if your target merchant category is auto repair facilities, you want to research and approach potential partners specializing in that market.
How do you find them? Look for the target industry's trade associations, publications, wholesalers, local chapters or industry experts. Identify key player that would be a good match. Some examples might be consultants, trainers, software companies, marketing companies, equipment vendors and trade groups.
Depending on the type of distribution partner, the potential partner will have different roles in the sales process. Determine whether the company or individual will be doing the actual selling and appropriate paperwork or will just be referring a warm lead to close.
Use a commonsense approach. If the prospective partner is currently not meeting face to face with your key target and doesn't have a large sales force, it may be better for you to work the entire sales process in-house. You could even develop tiered programs based upon role, such as: affiliate, sales partners or authorized reseller. Keep this in mind when developing a compensation program: a good rule of thumb is the more they do, the more they make.
To ensure a successful relationship, both parties must have a clear understanding of what is expected. You must concisely define this in your agreement, as well as articulate what you expect of the relationship and what your partner can expect from your company. Also, specify sales goals and targets. This will give you a yardstick to measure whether the arrangement is a success. It's paramount that all parties know, understand and commit to their respective roles.
The roles assigned to each participant will drive training development. As you well know, our industry can be fairly complex with product features, underwriting guidelines, risk management, security concerns and the merchant boarding process.
A key factor that will determine success is whether your new distribution partners and their teams are trained thoroughly. Make sure you develop a comprehensive program that meets all their needs and is easy to implement. Training is the key. Many new partnerships look great on paper, but if you can't mobilize the sales force, it will never gain flight. Partners need to have confidence in their ability to explain and sell your products.
Another key component is sales support. Put a system in place that allows new distribution partners to access sales support material. This can be accomplished by developing an easy to navigate website that provides all the necessary documentation and marketing material.
If you are a small organization and don't' have the resources to support a large sales network, train one of your new partner's key employees to be the first point of contact. Give this individual the tools to be successful. Do it right the first time, and you'll be rewarded with fewer support calls and increased sales. Also, make sure you are reaching out consistently with online training opportunities and program updates. My team has implemented sharing weekly case studies to rave reviews.
Distribution channels are an attractive, flexible way for companies to develop new markets and additional revenue. Synergistic relationships come in all shapes and sizes, but the best relationships and partnerships are the ones that benefit all parties. Focus on creating win/win distribution programs, and you will be well on your way to growing your merchant portfolio.
Marc Beauchamp is author of Survive and Thrive in the Merchant Services Industry and founder of Bankcard Life, a community for payments professionals. He is offering a free copy of his book to all payments professionals at www.bankcardlife.com/greensheet. Marc welcomes your comments and feedback at firstname.lastname@example.org.
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
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