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Table of Contents

Lead Story

Light alleviating a dark decline


Industry Update

Legislative outlook: Interchange bills less likely than ID fraud rules

First Data's composite security system - a game changer?

TSYS, FNBO enter joint venture

Trade Association News


GS Advisory Board:
Positive economic signs and actions - Part 1

Online banking in Canada:
What happens next?

Joseph Iuso
UseMyServices Inc.

Research Rundown

Selling Prepaid

Prepaid in brief

Win-win scenarios abound at Prepaid Expo


Are banks losing grip on payments?

Patti Murphy
The Takoma Group

Dial or smile

Justin Milmeister
Elite Merchant Solutions

Payments industry issues:
First quarter 2010

Brandes Elitch
CrossCheck Inc.


Street SmartsSM:
Parting thoughts for readers

Jon Perry and Vanessa Lang
Merchant Services Inc., Texas

Police warn of new skimming devices

Nicholas Cucci
Network Merchants Inc.

Ripples on the mobile Web

Dale S. Laszig
Castles Technology Co. Ltd.

Digging into PCI - Part 9:
Restrict physical access to cardholder data

Tim Cranny
Panoptic Security Inc.

Company Profile

Retail Decisions Inc.

New Products

A mobile payments bundle

MerchantWARE Mobile
Company: Merchant Warehouse

Statistical analysis of prepaid

The Stats Tool
Company: Stanton Consultancy Ltd.


Unleash the power of networking



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

March 22, 2010  •  Issue 10:03:02

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Dial or smile

By Justin Milmeister

I have spent the last eight years of my professional life building a merchant services company and have experienced both the good and bad that come with building and running your own business. An important question I faced early on in this adventure was whether to grow my business through outside sales representatives or have inside sales representatives calling on merchants to procure business.

Looking outside

At the early stages, like any new company, my business did not have abundant cash, so I had to make do with minimal resources. I chose to expand my business using an outside sales force, so I placed an ad in the local paper, and I asked friends if they knew anybody looking to make some extra money. I figured everyone knew a few business owners whom they could sign up and thereby earn some extra money for themselves.

My decision to focus on outside sales representatives was exclusively based on lack of available funds and the small office space I occupied.

Almost immediately I had a small sales force of five people; two of them were full time, and three were part time workers who just wanted to earn a little bit of extra money on the side. All were paid 100 percent by commission, so the cost to me was only my time in training reps and taking care of back-office functions.

Over the next year my sales force nearly doubled to nine, all whom resided and worked in my locality. The residuals had grown at a healthy pace, and at this point I decided to hire my first inside sales representative whose sole function was to telephone merchants nationwide to entice them to switch their payment processing to my company.

Moving inside

I was confident this would be the best way to capture the most customers in the shortest amount of time. However, until this point, I did not have the resources to have an inside salesperson.

I would now be responsible for paying someone even if he or she did not produce, given that the person would be an employee whose earnings would be reported on a W-2 federal form, as opposed to an independent contractor who would be paid only on production and whose income would be reported on a 1099 form.

In addition to wages, I had to come up with a compensation package that would incentivize this inside sales representative to perform. Given that this was new to me, I had to research the industry norms and then make a business decision on what would work best for my particular situation. I called on several companies to find out about their inside sales programs and responded to several ads placed in the local paper and various job sites by merchant service companies.

Based on my research, I decided to offer a tiered program that provided more income to the sales rep the greater the production. This created a win-win situation for both the sales rep and my company.

In a year's time this one inside sales rep who was dialing for dollars was able to build a residual stream that was greater than the nine outside sales representatives combined. In all fairness this inside sales rep was highly motivated and had more experience in sales than the outside sales reps, but I was sold on the inside sales program and decided to focus on inside sales to build my business.

I moved into larger office space and invested in technology, including a state of the art phone system. Over the next several years I built my inside sales staff and hired an individual to recruit, train and manage the outside sales reps.

For my company, inside salespeople are employees who work by phone; outside salespeople are independent contractors who call on prospects in person. I refer to the former as "dial" and the latter as "smile."

The old saying that the numbers speak for themselves was apropos when comparing profitability between my company's outside and inside reps. The inside sales force was by a landslide far more profitable and productive than the outside sales reps.

Comparing models

However I am a firm believer in not putting all of my eggs into one basket, so I have put the proper people in place to manage the outside sales force. However, I know my "slot machine" lies within inside sales.

The following is a list of the most noticeable pros and cons between inside and outside merchant service sales for companies. They are listed in no particular order of importance.

Dial pros include:

Dial cons include:

Smile pros include:

Smile cons include:

Choosing a formula

If you are a new ISO with limited capital, the outside sales program is the way to go. In addition to the costs being very low, it will allow a new company and its principal(s) to get a good feel for the industry and provide a better chance of closing deals with that smile.

As your merchant base and thus your residuals grow, it is prudent to invest in an inside sales force. If properly recruited and managed, you will likely see your merchant acquisitions grow along with your residuals at a much faster pace.

I believe a good mix of inside and outside sales representatives is a winning formula for a profitable venture. Whatever sales method you choose, whether it be over the phone (dial) or in person (smile) or a combination of both, good management, training and responsiveness to your sales force will be essential to your organization's success.

Justin Milmeister is the President and founder of Elite Merchant Solutions, which was honored last year by Inc. magazine as one of the top 500 fastest-growing privately held companies in the nation. He is also a member of The Green Sheet Advisory Board. Justin can be reached at, and more information on Elite Merchant Solutions can be found at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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