By Dale S. Laszig
DSL Direct LLC
Scalability is a hot topic in today's business community. Entrepreneurs must demonstrate to prospective investors that their startup businesses can go very wide very fast. Modern day gladiators who bring their business plans to television reality shows like The Profit and Shark Tank will be kicked to the curb if they haven't done their homework. Applicants with inflated valuations or unrealistic return on investment models may hear Kevin O'Leary say, "You're dead to me."
Most merchant level salespeople (MLSs) associate the word "multiple" with portfolio acquisitions, in which a collection of merchant accounts is sold for many times its book value. Selling a book of business may be the ultimate goal for many MLSs, but there are other, more immediate ways to scale a business, create new revenue streams and accelerate growth. This article explores the mathematics of scaling and specific strategies that MLSs can use to achieve extreme success.
Grant Cardone, author of The 10X Rule: The Only Difference Between Success and Failure observed that successful people are 10 times as focused as average people on achieving goals. "It takes the same amount of energy to have a great marriage as it does an average one, just as it takes the same amount of energy to make $10 million as it does $10,000," he wrote.
Cardone believes the difference between successful and average people can be measured by their level of focus and precision. Successful people are adept at "setting the right targets, estimating the mandatory effort, and operating at the right level of action," he wrote. He noted that average performers typically set goals too low and subsequently fail to achieve their objectives.
Cardone described success as infinite and inexhaustible and said there will always be plenty to go around, but many people fail to understand that principle. "Unfortunately, most people look at success as though it is somehow a scarcity," he wrote. "They tend to think that if someone is successful, it will somehow inhibit their ability to succeed."
In his February 2012 TED Talk, Peter H. Diamandis proposed that scarcity is contextual because most resources are abundant, just slightly out of reach. Diamandis and Steven Kotler's book Abundance: The Future Is Better Than You Think described how advanced technologies improve access to critical resources. They used the example of an orange tree: "If I pluck all the oranges from the lower branches, I am effectively out of accessible fruit," they wrote. "But once someone invents a piece of technology called a ladder, I've suddenly got new reach. Problem solved."
In his book Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company, Andy Grove, former Chief Executive Officer at Intel Corp. used the term "10X Force" to describe how disruptive technologies can suddenly change everything. Much of the change happens quietly in the background until suddenly it explodes with the force of a tsunami.
"In the face of such '10X' forces, you can lose control of your destiny," he wrote. "Things happen to your business that didn't before; your business no longer responds to your actions as it used to." Grove suggested that such disruptions can have a profound impact on an industry's entire value chain.
Clearly, it's better to be the disruptor than the disrupted. Deborah Baxley, Principal at Capgemini, a multinational management consulting corporation, applied Grove's 10X factor to payments, noting that emerging payment schemes must be at least 10 times better than consumers' current experience to achieve mass adoption.
"Merchants can achieve the 10X factor using three common denominators for success," Baxley said. "Think of them as the Three E's: ease checkout, eliminate friction and enable marketplace." She went on to say that in-app payments ease checkout by eliminating the need to wait for a server to bring a check, take away a credit card and return with a printed receipt. Line busting with roving salespeople eliminates friction. Creating trust in marketplaces through features like ratings and reputations can drive entirely new types of commerce.
Excel Capital Management Inc., established in 2013 and based in New York City's financial district, has been steadily growing its channel partner network and digital footprint. Excel President Nathan Abadi and Managing Partner Chad Otar reflected on the company's evolution from a cold calling merchant cash advance company to a technology-focused alternative lender.
"We have grown into a multifaceted technology company," Abadi said. "People use our online platform to apply for a loan, comparison shop and find the right funding channel."
Otar added, "It was never our intention to be an exclusively online company, where people apply and get approval without a human touch. For us, this business has always been about relationships; we specialize in educating our clients and helping them find the best product fit."
The partners hired a marketing team to help them build their social media presence through regular Twitter, LinkedIn and blog posts that highlight industry trends and discuss the pros and cons of various nonbank finance options. An industry consultant recently stopped by and pointed to a yellow legal pad and pen and asked, rhetorically, "What is that?"
The pen and legal pad have since been replaced by a customer relationship management system that Otar said has performed well and exceeded expectations. "It took a while for our agents to get used to the CRM, but it has significantly improved our process flow," Otar said. "Workflow automation helps us manage expectations. Loan originators are notified when we start to work on a file. Continual status updates throughout the process make it easy for reps to follow each deal as it goes through the pipeline."
Otar noted that the company has been leveraging its social media and technology platforms to tailor its messages and create targeted marketing campaigns across a diverse demographic spectrum. "It's a generational thing; the newer generation doesn't care as much about the personal touch," he said. "Millennials want everything fast and are comfortable using the online tools. Our 35- to 40-year-old customers still appreciate getting calls."
MLSs can help merchants scale by providing the services, solutions and support they need to grow their businesses. Their success is tied to their merchants' success. MLSs with an abundant mindset also have a competitive advantage. They see no scarcity of prospective merchant customers, only the need to improve their reach.
Dale S. Laszig, Staff Writer at The Green Sheet and Managing Director at DSL Direct LLC, is a payments industry journalist and content provider. She can be reached at firstname.lastname@example.org and on Twitter at @DSLdirect.
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