By Jeffrey I. Shavitz
Before my tenure with Street SmartsSM ends in March, I feel compelled to write about "additional" services. Wait. Before you stop reading, I am not planning to discuss the basic ancillary services, often referred to as value-added services that have been written about extensively over the years in The Green Sheet.
As a small business owner for most of my career and having worked with small to midsize business (SMB) owners for the past 20 years, the concept of offering and bundling synergistic product offerings is very close to my heart. I've carefully studied the psychology of independent business owners and what they are looking for as they grow their companies.
I've thoroughly examined hard facts and survey information and attended seminars by leading business strategists who study what makes SMB entrepreneurs click. I understand what makes prospective merchants want to buy from you – whether it's merchant services or a host of other products and services.
As a result, an approach I endorse, and use myself, is to bundle together numerous products and services, all of which help SMBs grow their companies and, along with that, to become a reliable resource for SMBs. Once I establish a trusted relationship with an SMB owner, I can then provide additional services such as credit card processing and others that help on the expense side.
Many of us are calling on the SMB segment, and numerous products and services could help these independent business owners run their companies more effectively. These include insurance, payroll, telephone, data analytics and numerous others, and they are much more than "additional" services.
Also, many business owners I have worked with are in survival mode (I understand this well, having run a few SMBs myself). Forget doing a one- or five-year business plan; how about a one-day or one-month plan? If you, as an MLS, can better understand and appreciate the mindset of your customers, the more easily you will sell them what they need, be it credit card processing or a number of other business services. You must draw upon their emotions, not just offer to reduce their credit card processing fees by a few basis points or remove their monthly PCI-compliance fee.
I have written four books on business, but I really am not an avid reader of literature. However, I was just helping my daughter with her high school English project on Shakespeare, specifically Hamlet. One quote read, "The readiness is all!" What does this mean to you? (Now I feel like your teacher.)
To me, the connotation specific to this article is that we, as MLSs, must be ready and willing to understand the pain points of our customers – really understand what we are selling. Although this may sound like semantics, what are you really selling? Are you selling a rate, are you selling the opportunity to help a merchant realize his or her professional dream? What are you selling?
Please don't just sell rate. That's my preamble. Now I'll share perspectives from others in the industry on the importance of card processing versus other offerings. The names used are those MLS Forum members selected when registering for the forum at www.greensheet.com.
Steve Norell wrote, "If you don't start offering other products or services you are dead. I've taken the attitude that you should no longer make credit card processing the primary product, and that credit cards should be the ancillary product.
"Look at the POS world. When Mercury got into the arena, the POS resellers started with and ended with POS. The credit card piece was sold almost like a kitchen printer. The merchant didn't even ask what the rates were. That is what we need to start doing. What that product service is will be up to you as an MLS/ISO but when you start to see monthly revenue drop you clearly need to find a new honeypot."
Tongue-in-cheek, Vend Shop posted, "I'm working on a deal to sell bottled air to China! Lord knows they need some clean air over there. Seriously, I heard a news story about a guy in Canada that is trying to sell clean air to China … that would be a neat scam to get onto … kinda like selling bottled water was a few years ago and now it's a big hit, although unnecessary."
Dee Malik wrote, "Core services would be financial products, receivable purchasing, also known as MCAs. I lead with those, so Steve's post is pretty spot on. We also added SBA loans and other optional capital products. I have a PC (more of a hustle not even a hobby yet) business that I work, but I want to use it partly for merchant services as well. We were really excited about adding what we thought was a perfect fit, a POS company, but it fell through.
"Clearly, the future of merchant services will include POS products and services. Consequently, later this year I will revisit this opportunity. … I have a good merchant services partner, good receivable purchasing partner, and check and gateway as well. I plan on strengthening those relationships while marketing their services."
BigRed_Dave posted, "I always lead with credit cards. Although I have additional services, I want to be known as their trusted credit card provider first. Cross selling and up selling occur after they experience my cc service, and thus that ancillary product becomes a much easier sale."
NWBC's approach differs from BigRed_Dave's. "Merchant services is my ancillary product ... albeit a good paying product, but sold primarily as an ancillary product to the other services offered," NWBC wrote. "On our main merchant advertising it's listed under 'other services.' Some of my products I'm actually making more money if I don't handle their processing."
Forum member jdeckard agreed with NWBC's approach, stating, "I made a shift about four years ago, and the ancillary product became the primary. Easier sale … less headaches ... larger market... and not nearly as much BS. But what do I know?"
I promise that this is my last article on ancillary services before I am "retired" from Street SmartsSM authorship this spring.
Jeffrey I. Shavitz is Chief Executive Officer of TrafficJamming LLC, which is a virtual business group for entrepreneurs and small business owners to help grow a company's sales (traffic = customers in his language). His experience in payments includes co-founding Charge Card Systems Inc., which was sold to Card Connect in 2012; Alternative Merchant Processing, dedicated to high-risk merchant processing; and Charge Card Funding, involved in the cash advance space. Jeff has published four books: Size Doesn't Matter — Why Small Business is Big Business, which became an Amazon No. 1 top release in both the business and entrepreneur categories; Small Business Aha Messages; The Power of Residual Income – You Can Bank on It!, and Networking – Get Connected. He can be contacted at 800-878-4100 or firstname.lastname@example.org; his websites are www.jeffshavitz.com and www.trafficjamming.com.
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