By Jeff Fortney
Clearent LLC
Few would dispute that the best source of new business is the referral. A referral serves as an automatic door opener, enhancing your credibility; it turns cold leads to warm, making them easier to close. All merchant level salespeople (MLSs) prefer working referrals to chasing cold calls, mainly because referrals require less time start to finish, opening time for other sales opportunities. Given this efficiency, business derived from referrals may be more valuable, even if it is priced lower than cold calls.
However, even with these unquestioned benefits, many MLSs are not highly motivated to meet the challenges involved in generating a significant number of referrals.
When MLSs are asked where they generally look for referrals, common answers include friends, software companies, vendors and others who also sell to businesses. They will also tell you they attend networking meetings and events to help find leads.
Some MLSs say they ask their merchant customers for referrals, but few say they actively work their merchant base for leads. There are many ways to increase referrals from clients, and you can do so in ways that benefit your customers.
Two examples: creating and distributing newsletters and sharing cost control tips.
Newsletters sent on a consistent basis are an effective tool in keeping your name in front of merchants. They don't need to be lengthy and don't always need to be about payment processing.
Realtors have mastered this art. Many will write a two-sided newsletter with information on home services and neighborhood specials. Generally, they include only brief mentions about home sales.
The difficulty in preparing a newsletter is content. It's obvious what a realtor provides and, as such, content is easy to identify. For an MLS, it's easy to drift into either useless information or techno-speak. The need to be brief and spur interest makes it even harder.
One idea is to highlight one of your merchants (with his or her permission). This will inform other merchants and increase your rapport with the highlighted merchant as well.
You can also provide pertinent updates regarding the industry. Information regarding Payment Card Industry Data Security Standard compliance is a prime example of a beneficial service, if clearly written in words merchants can understand.
Other options include coupons, or notices of discounts and referral bonuses.
Consider having a stack of newsletters with you when making sales calls, as well as hand-delivering copies to local merchants.
A common sales technique is to ask for a copy of a prospective merchant's statement and say, "I can save you money." Since this remains the most common sales practice in our industry, why aren't you taking this one step further and approaching your merchants with ways they can help control their costs?
This is contrary to what many have been trained to do. Others will tell you this costs you money because it takes away from your selling time. However, if your competition is claiming cost savings, your proactively showing merchants cost control measures builds their confidence in you, making them less likely to listen to competitors' claims.
Teach merchants the proper transaction handling steps to ensure they receive the best possible rates. Tell them to swipe all cards whenever possible. Emphasize that they should answer every question the terminal asks when accepting payments. For merchants priced at interchange pass through, go into more detail, emphasizing the various requirements of each category.
It is not uncommon for MLSs to teach merchants cost control measures when they install or download terminals. However, to generate referrals, it's important to reach out to your customers regularly. The key is identifying opportunities as they arise. This requires that you monitor your portfolio monthly.
Do this at the beginning of each month. Look for merchants who have had either an increase in costs or a significant volume increase. An increase in cost without a volume increase is a key indicator.
Acknowledging increased volume shows merchants you're aware of their success; it also provides an opening to remind merchants of their initial training.
To monitor effectively, you will need access to your merchants' data or statements. Also, it's important to show merchants how their actions can help control their costs. (It is not prudent to attempt this exercise if there is a change in pricing during the month you plan to analyze.)
After you have completed your cost control evaluation, remind your merchant that other MLSs will promise to save them money. Tell them that when it happens, they should call you before taking any such promises to heart.
Then close your conversations with, "I'm sure you know merchants who signed with their processing partner and never saw them again. Do you think they would benefit from my services? I'm sure I can help them, too."
The key to success is to actively seek referrals. Using a newsletter and training merchants on cost control measures are two steps you can take to gain their trust - and gain leads. The time you spend on both activities will be worth it.
Jeff Fortney is Director of Business Development with Clearent LLC. He has more than 12 years' experience in the payments industry. Contact him at jeff@clearent.com or 972-618-7340.
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