By Peggy Bekavac Olson
Merchant acquirers, ISOs and merchant level salespeople (MLSs) struggling for growth share a common complaint: they have a hard time signing new merchants because they're up against other firms willing to sell the same services at lower prices. They're frustrated at always having to sell on price. Their businesses are reeling from razor-thin margins and the constant downward spiral of price compression.
No matter what you charge for transaction processing and related support services, a merchant prospect will routinely be promised comparable services for a lower price by the next MLS who walks in the door. So if you're serious about growth, what should you do to overcome this challenge without resorting to lowball pricing tactics?
First, understand the buying behavior of merchants seeking transaction processing services. Intuitively, you know you can't expect them to pay you more than they pay the competition for similar services.
When merchants believe that two or more vendors are basically the same, they will consistently select the lowest priced. So, if the only differentiating factor between your business and the competition is price, merchants will always choose the cheapest option.
When you give merchants good reasons to do business with you, you rise above competing solely on price. The key to success is to differentiate your products, services and company in the minds of potential merchant customers. In differentiating your company, you provide value that others do not. Take time to identify your company's core strengths and determine how you bring value to merchants.
Deep soul-searching is often required to figure out what makes your business, as well as your products and services, unique and special to buyers. You need to understand and identify what factors your company brings to the table that no other company can or does.
Unfortunately, understanding your value and identifying or creating true differentiation aren't exactly easy. Here's where I hope I can provide some help. Although, you will likely find countless ways to differentiate your business, following are several methods to help you quickly distinguish yourself from the competition.
These, plus other customer service initiatives, will go a long way toward differentiating your business from the competition.
2. Be an expert. People want the best. They like to know they are working with the most qualified salesperson and payment processing company. So focus on becoming an expert. Use a consultative approach to give information and advice that mean something to merchants. You'll find the process of selling your products and services will become considerably easier when you're not just another payment processing vendor out pounding the pavement.
3. Solve problems. Differentiation can be achieved by solving merchant problems. Try to discover prospective merchant pain points - the things that keep them up at night, such as monthly statements that are hard to read and understand, reconciliation or chargeback issues, numerous downgraded transactions, or technology difficulties. Then offer viable solutions to alleviate the problems.
4. Meet additional needs. Listen to prospects and identify additional products and services that they find desirable, like check processing, gift cards, loyalty and rewards programs, ATMs, merchant cash advance, inventory tracking, customer relationship management tools and more. Being a single source for a variety of payment and business services can be a great differentiating attribute. Your merchant prospects won't have to patch together a solution, because they can handle everything through you. They also won't need to worry about multiple vendors pointing fingers at each other when things go wrong. And meeting additional needs creates stickiness, giving you greater merchant retention.
5. Offer marketing materials, programs and promotions. Go beyond offering traditional window clings and POS signage. Merchants will love your attention in helping them increase sales and drive revenue. So helping with brandable marketing collateral, incentives and promotional assistance can provide the differentiation needed to clinch a sale. Think about becoming a sponsor for Small Business Saturday, whose sponsorship is led by American Express Co. And help mom-and-pop merchants increase sales not only on the Saturday after Thanksgiving, but every Saturday throughout the year.
6. Provide ongoing merchant training and education. Conduct in-person training, and create and offer training videos, too. Providing customized tutorials and quick reference guides on making card-present and card-not-present transactions, performing returns and voids, ending and submitting a batch, completing the end-of-day process and identifying fraud are great ways to add value long after the initial sale.
Again, the ways to provide differentiated value to merchants is infinite. Your success lies in understanding how, to the buyer, you're unique and better than the competition and then effectively communicating these attributes to prospective merchants.
When making statements about the value you deliver, explain how or why what you say matters so you don't end up sounding trite or like others making similar claims. Buyers want to understand what the message you bring really means to their businesses and how it is different from others spouting the same messages.
So if you're struggling to win new business and battling the competition over price, examine your company and your offerings to make sure you're differentiating. Once you understand how you're unique, don't be shy about telling merchant prospects how you stand head and shoulders above the competition. It will propel them to choose your organization as the one they want to do business with and thereby help you drive sales.
Peggy Bekavac Olson founded Strategic Marketing, a full-service marketing and communications firm specializing in financial services and electronic payment companies, after serving as Vice President of Marketing and Communications for TSYS. She can be reached at 480-706-0816 or email@example.com. Information about Strategic Marketing can be found at www.smktg.com.
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