By Roger McNamara
I walked down a hallway leading to a door that opened into a massive warehouse-like facility. Inside were machines standing on what looked like hydraulic stilts. I crossed a steel bridge to enter the belly of the beast, which would be my home for the next two days. I had prepared with ground school training so as to make friends with my new foe.
Would I be able to master what I had learned? Would I be able to fly the Airbus A320? Well, not actually the real plane, but a very expensive, Level D flight simulator at the Jet Blue University in Orlando Fla.? I was there to see if I could learn to fly an airplane millions of passengers before me had flown in. I would be trained by the best, Captain Wayne Phillips, a seasoned professional who had a great way of making the complicated sound easy.
As I waited for my session, parades of other pilots entered the facility to receive their training, too. Pilots came in many varieties. Some were there to switch aircraft, others were new to the airline, but the vast majority were returning for retraining. During the latter, which occurred every 12 months, they were put through their paces to refresh their knowledge and skills to make sure they still had what it took to remain on the job. Each pilot received that training from professional instructors, and they had to pass before they could return to work.
Remembering all of this recently got me thinking. Sales is quite a different profession than aviation. And the world of the merchant level salesperson (MLS) is as far from the airline pilot's world as you can get. Imagine if an airline took the position that once you got your pilot's license, you were good to go—indefinitely. "Mr. Pilot, you are good to go," supervisors would say. "You learned to fly 20 years ago; just keep doing what you are doing."
ISOs must address the reality of learning. It should never stop, because when it does, you stop growing. By nature, MLSs are used to calling their own shots, doing it their way. That has worked very well for the longest time, particularly in the business-to-consumer (B2C) space. In the B2C space, an abundance of opportunity kept the average ISO selling—even with race-to-zero pricing. If you had enough activity, you could make up for shrinking margins by signing a few more accounts to your book. Then, unfortunately, the plague of our generation arrived: COVID-19. The ships that had been sailing smoothly up to that point took on water. Businesses closed, leases lapsed, transaction counts fell and residuals plummeted. The abundant opportunity ground to a halt; the game had shifted. The new challenge is in the business-to-business (B2B) sphere.
Unlike B2C, B2B has been less affected from a payment's perspective. Also, by some accounts, it is a $10 trillion opportunity, with only 8 percent of B2B payment's currently on plastic. That in itself represents an amazing opportunity for the ISO community. Speeding to capture this market are a host of fintech companies that, essentially, are positioning themselves as the new payment terminal providers with software to digitize companies' B2B payments.
With as many as 30.2 million small businesses in the United States, the opportunity to sell in this space has never been greater. Yet it comes with some perils. Selling into the B2B space with the tried and trusted techniques used in the B2C world will meet with failure and wasted effort. Why? Because credit payments are considered the costliest of all payment types when compared with ACH, check and wire. Saving a company a penny or two on a B2B transaction when they already think 2.5 to 3 percent is too much will lead to credit being suppressed as a form of payment. Price is not a value lever, and if you are relying on Level III to save the day, think again.
Landing and servicing B2B accounts requires a different approach, which in turn requires the ISO to take a drastically different path. It requires the ISO to realize something the pilot has known for a long time: training is the shortest path to success.
This may be a hard pill to swallow for many ISOs; you are a fiercely independent group. The key will be to avoid insanity, you know: doing the same thing over and over again and expecting a different result. There are alternatives that can bring you in for a smooth landing because, just like pilots, nobody in this business wants to crash and burn.
Roger McNamara, president, Guide2Interchange, LLC, is a 25+-year veteran of the payments industry, most recently as the director of business development with American Express in the United States. He has sold more than $200 billion worth of card processing and now leads a B2B merchant sales training organization. Contact him by email at Guide2Interchange@gmail.com or by phone at 561-379-3151.
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