The Green Sheet Online Edition
August 24, 2009 • Issue 09:08:02
Blackjack savvy applied to merchant acquiring
It was the last weekend in June. School was out for the summer and many of our customers were on vacation with their families. Desiring some downtime, Vanessa wanted to head an hour north to a tribal casino in Oklahoma. She loves the sounds of the casino and the thrill of playing blackjack, also known as twenty-one.
A regular blackjack player was sitting next to Vanessa at the table. He commented that he needed another eight hours of play to hit 20. The gentlemen explained that if you played 20 hours of blackjack by the end of July, you would be automatically entered into their $500,000 blackjack tournament.
I knew what was going to happen next. It's like when the toddler you have with you at the grocery store spies the candy displayed in the checkout lane.
On the drive home, Vanessa brought up the tournament. She said she had always wanted to play in one. I thought if I kept quiet and gently ignored the subject, it would go away. I was wrong.
The next week, Vanessa mentioned the blackjack tournament more than health care reform was debated on the major news networks. It was time to address the subject, and I relented to her wish of pursuing the big contest.
We set simple ground rules. They were:
- There would be a maximum monetary loss, beyond which Vanessa would not continue playing. She had to clock 16 more hours, and losing thousands of dollars for a desire to play in a tournament was not on the top of my list.
- She had to valet the car - no walking alone to the casino.
- She would only play at the casino during day-light hours.
Emotion versus logic
Last Saturday, I was working on a project for a customer. It was going to take most of the day. Vanessa thought it was a fine time to make the trek to the casino.
By day's end, she had clocked in eight of her required 20 hours. On Sunday after brunch, we drove to the casino and spent the next five hours getting to 13. Seven hours were left. Our first rule had held; Vanessa was breaking even.
The first 96 people who met that 20-hour threshold would be allowed into the tournament. Everyone after that would be put on a standby list. The thought of putting in this much time and being relegated to a standby list didn't sit well with Vanessa.
I realized the casino had approached this tournament as we sell to merchants. Understand and go for the customer's emotional - not logical - sense, and you'll win the deal.
But to win at blackjack you must keep your head. When seated at the blackjack table, you and the rest of your fellow gamblers are playing against the house. Blackjack is science as well as luck. Hit on 16 when the dealer shows a face card.
Double down when you have an ace and four when the dealer shows a six. It's statistics. Keep your emotion out of the game, and play the odds.
When we play against the house, it is similar to ISOs vying for a customer. All of us at the table are looking to win this customer over. Some of us look to win by the seat of our pants.
Others use statistics, human behavior and other known variables to gain an advantage. Nothing irks me more than when the dealer is showing a face card and someone at the table "holds" with 14. In our business, that's different. I like my competition to hold with 14.
The house versus the player
The 20 hours Vanessa had played to qualify for the tournament were played against the house. But competition play is much different. In our last two and one-half hours toward the magic 20, we were educated.
Sarah, a semiprofessional blackjack player and Sam, our dealer, were explaining that tournament play was nothing like playing against the house. In tournament play, you are playing against other players. The objective - don't bust. Make the other player bust.
Since there would only be 18 hands per tournament round, you needed to maximize your winnings. Plays I would consider sacrilegious are common in tournaments. Splitting face cards, standing on 14 and doubling down on a natural blackjack are ways to maximize your winnings.
Vanessa whispered to me, "I wish I could be cutthroat."
It's not being cutthroat, I thought. It was understanding the socially acceptable rules and mores of this subculture. It was a different way of thinking.
While playing against the house felt similar to the plight of an ISO, competition play can be likened to business against business. I had a deeper understanding and appreciation of the mindset of a tournament player.
It's only business
While we were at the casino, a pit boss shared with us stories of elderly women coming in and playing the tables. They had lost all of their money. At the tables they would cry and say, "I have no money for rent or food."
The stories the pit boss told were heart wrenching. Some readers may think, "How could you stand to stay in that business?" But is the casino business any different than any other? Whether it is entering into a contractual agreement or sitting at a table with rent money, we know what is at stake.
Putting your emotions aside, you realize that the casino is just a business. It is there to make money. And casino workers have probably heard every conceivable sob story under the sun. Like the leader of a doomed business venture, the elderly women had a dream. But they were greedy; they didn't plan; they didn't make rules for themselves and follow them.
In business our rules are contained in our playbook. It's our business plan, our mission, vision and guiding principles. As sponsors of a program called Project New, we help first-time business owners develop a sales and marketing plan.
According to the U.S. Small Business Administration, two-thirds of new businesses survive at least two years, 44 percent survive at least four years, and 31 percent survive at least seven years. (Those numbers were culled before the current economic fallout began.)
Let's look at the negative side of the SBA's numbers. One-third of all new startups will never make it past year two, 56 percent won't make it past year four, and 69 percent won't see year seven.
In October, we will have our annual corporate off-site meeting. All of our notes, changes, additions and deletions get updated in our playbook.
Even if you are a one-person shop, have a business plan. Especially in these economic times, it is important to understand your cash flow, income statement and balance sheet. These financial tools should be factored into changes in your business plan.
20 for Twenty-one
At noon on Monday, Vanessa made it to 20 hours. She was number 50 out of 96 to qualify for the tournament.
On Sunday, she will sit at the table with blackjack professionals. Even if she doesn't finish in the top 10, the 96 entrants have a chance to win $10,000 in cash or a 2009 Mercedes Benz.
Vanessa is studying tournament play. Win or lose, she will always be a professional and a winner. We'll let you know how it turns out.
Jon Perry and Vanessa Lang are the owners of 888QuikRate.com, an ISO based in Ft. Worth, Texas, that was named Small Business of the Year by the local newspaper, The Star Telegram. For more information, tweet them at http://twitter.com/dfwcard, comment on their blog at http://merchantservices.cc or visit their profile at http://linkedin.com/in/jonperry or http://linkedin.com/in/vanessalang. Alternatively, you can contact Jon and Vanessa by phone at 817-857-3557 or by e-mail at firstname.lastname@example.org or email@example.com.
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