By Marc Beauchamp
When I was in the field, one of the first questions I would ask a merchant prospect when initiating the sales process was, "When was the last time you heard from your merchant services sales representative?" The answer was usually, "The day they delivered and installed my terminal." The merchant level salespeople (MLSs) mentioned had closed sales, but had failed miserably because they didn't create ongoing relationships that could have yielded significant future business.
Relationships between a company's representatives and their prospects, customers, distributors, employees and referral sources are vital to continued, sustained growth and stability. Loyal relationships with these valued individuals make for a profitable company and reduced merchant attrition.
So, why do so few MLSs focus on customer relationship marketing? My most frequent answer is lack of understanding of the potential profits in keeping existing customers happy versus constantly acquiring new ones.
Many merchants switch processors because their processors appear to be indifferent, which doesn't engender loyalty. Focus as much or more attention on merchant retention as you do on new customer acquisition. Don't be a victim of indifference. Develop a good relationship marketing program that takes into consideration both customer relationship marketing and customer acquisition via relationship marketing.
With well-planned relationship marketing, you can improve retention, and that will impact the bottom line. According to customer relationship management experts, companies can increase revenue by 50 percent if they retain only 5 percent more of their customers. We are facing some of the highest attrition rates in our industry's history. If you don't keep your name in front of your merchants, a competitor will replace you.
Many MLSs are driven, financially and philosophically, to make cold calls, pursue new contacts and acquire new customers. Often, however, they give little thought to nurturing relationships with their existing customers. Given that acquiring a new customer can cost five to seven times more than retaining an existing one, this is a costly approach.
Merchants who are continuously courted, interacted with and reminded of your company's presence are less likely to race off when competitors call. Making your customers feel recognized, known and appreciated can significantly help ensure their loyalty. It's also a great way to gain excellent referrals.
Look at how retailers market products now. Almost every major retailer employs a loyalty, frequent shopper, or preferred customer program, often via mobile app. They're not offering these out of altruism: they are utilizing cutting-edge relationship marketing programs because they drive profits.
Even with the best merchant retention efforts, some relationships will inevitably break down. For various reasons, merchants will cancel their contracts and choose another provider. But those relationships aren't always lost.
Repairing a broken relationship is more efficient than building one from scratch. But many companies mistakenly attempt to re-acquire lost merchants in the same way that they acquire new ones. Failing to use what you know about past customers—and what they know about you—to your advantage can cost you time and money. Using an automated system minimizes the chances of losing customers and streamlines the process of acquiring new ones.
Following are three tools that can help in building new and enhancing existing relationships:
Whatever method or tool you use, make sure you consistently nurture business relationships with prospects, existing customers, employees, vendors and business associates. Build trust, develop rapport and deliver quality service, and your sales will soar.
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.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.Prev Next