By Jeff Fortney
The Strawhecker Group
In the past, when a new year began companies would set new goals and targets and develop plans for growth. And optimism was palpable—even if it was a recessionary period. C-suite executives and merchant level salespeople (MLSs) alike took part in planning and devising action steps to meet new targets.
In my many years in the professional world, I never experienced a period even remotely comparable to the one we endured from the end of 2019, throughout 2020 and into the beginning of 2021. No recent history can provide us with direction for this time, which remains unsettled a year after widespread COVID vaccination efforts got underway. The last pandemic that had an impact of similar consequence was back in 1918 and 1919, when the world was ravaged by a virulent strain of flu.
So, how do you plan at a time like this? In 2020, I dare say, we planned to just survive. During conversations with colleagues in the payments sphere, I found the majority felt the same way. We defined long-term planning in months, not years. In early 2020, I talked about my 100-year-old uncle, whose philosophy was to live day to day. I encouraged agents to think day to day, since potential merchant clients were not even sure they could survive the year.
Improved conditions in 2021 allowed for some long-term planning, but again, the uncertainty of the pandemic lingered. And as the year drew to a close, just when we thought we were settling down, we became flooded with Omicron. Now, as we approach the end of January, some people believe we are facing another challenging year.
I would argue the opposite. I believe the year presents opportunities we haven’t seen in the past two years. Why? If you have read any of my articles over the past several months, you can probably answer that question. Yet, when I converse with ISOs and MLSs, I can still hear fear and loss of confidence. Thus, I think it's time I discuss options to overcome this loss of confidence, and adapt to the new normal.
Try this 15-minute self-assessment. Begin by looking inward. To be successful, you need to realize that what worked in 2017 simply won't work today. That doesn’t mean you abandon the skills and experience you have gained. In fact, if you look close enough, you will realize you've already started to adapt that experience to today’s new normal. Whether or not you intended to, you've had to make changes to address our new normal conditions to survive. You just need to amplify those changes.
Next, choose one immediate step to take that is based on the new normal conditions, and execute that step. Here are a few options:
Once you have executed your chosen step, it's time to move to the right side of the payline, that is, it's time to sell. But before you start making calls, examine the market again, not just viewed through the new normal, but also through a historical perspective. Specifically, examine the market as if it were a recessionary period.
I am not saying the market is in a recession. I am saying the opportunities that stand out today parallel those that typically climb to the top during a recession. Just look for the signs. In 2009—during the Great Recession, which led to major changes to our industry—people were negatively affected in all markets and industries. Many of us found that the merchants we targeted in 2007 were no longer ideal targets in 2008.
For example, during a recession, new car sales drop, as people usually decide it is wiser to repair their cars than replace them. If you take a look at that market today, the inability to get inventory, both new and used autos, has led to people choosing to repair rather than replace their vehicles. This is just one example. The demand for repair rather than replacement can be found with major appliances and other products, as well. In many industries, supply chain issues have seriously impacted delivery of new items, making repair the only option.
Other shifts also become obvious when examining the market in light of our new normal. In conjunction with identifying high-value opportunities, you also can adapt your dialog to include comments about logistics issues, lack of inventory and the impact these have on your prospects' sales.
Here is one possible scenario. A question you can ask early in a conversation with a merchant is, "How has business been throughout this time of uncertainty?" After acknowledging the merchant's response, work in a simple statement such as, "I have heard that the ticket sizes seem to be larger for many merchants like you. Yet the margins seem smaller. Have you thought of different ways to manage costs, including the card acceptance costs?"
Another similarity between today and a time of recession is the prevalence of worry. Merchants and consumers are worried about the future. There is no certainty. As with a recession, we don’t want to play to that fear today. We want to help offset it. We won’t be able to eliminate fear, but by helping merchants address issues by examining their current pricing model and enabling them to offer necessary alternatives in today’s new normal, we can help them be on better footing to meet the challenges ahead.
Jeff Fortney, a senior associate at The Strawhecker Group, is a long-time payments industry executive and mentor. He is focused on sharing his industry knowledge and experience with others to help them grow their business. He can be reached at 214-458-1379.
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