The Green Sheet Online Edition

October 10, 2016 • Issue 16:10:01

Street Smarts^SM

Are you in the payments matrix?

By John Tucker
1st Capital Loans LLC

The great Morpheus in The Matrix film told Neo, "The matrix is a system, and that system is our enemy." I've been involved in the payments industry as an independent agent since January 2007. That's nearly 10 years of seeing the best (and worst) of our industry from all angles. That experience has shown me that the majority of merchant level salespeople (MLSs) in our space fail within 12 months of entering the industry.

Many of these MLSs were incompetent. However, I believe most were just not equipped with strategies to succeed because of being a part of our industry's version of the matrix. For this article, I'm going to focus in this matrix.

The matrix is a mom-and-pop network

On websites like CareerBuilder, Monster, LinkedIn and Craigslist, our industry's recruiters and sales managers routinely recruit MLSs with offers like the following:

• $10,000 signing bonus! No experience needed! Sign up today!
• Most of our agents make $100,000 per year and spend most of their time playing golf!
• No experience needed! We will train you! Make $100,000 per year!
• Got student loan debt? No worries! Make $200,000 per year with no experience!

Now, of course, these messages are 100 percent rubbish, but what are all of these messages designed to do? They're designed to recruit thousands of inexperienced individuals to sell for free (they cover their own expenses and pay for their own insurance) to build up a registered ISO's mom-and-pop network. Said network could consist of 5,000 MLSs who bring in an average of five applications over one year (25,000 apps).

With 70 percent getting approved and boarded, that leads to 17,500 live accounts. The average annual bankcard processing per account might be $50,000, which means the ISO boards $875 million in new volume. Collectively, the network of 5,000 MLSs brings in a staggering amount of volume, but individually, I estimate at least 95 percent, or 4,750 of them, do not do well.

• Most will be in the industry from only three to nine months.
• Most will not make hardly any income at all from their direct selling efforts.
• Many will use unscrupulous tactics and leave merchants they sign in a bad place.
• Many will hate the sales profession when they leave the industry.
• Many won't break even in terms of recouping their expenses.
• Many will be told they just don't have what it takes.

The matrix's defective sales training

To the 5,000 MLSs in the mom-and-pop network, the registered ISO usually provides some of the worst professional training I have ever seen. I'm not sure you can even call it "training" because it does a sub-standard job of equipping MLSs with the tools, resources and strategies needed to craft a successful career. Instead, this is the rubbish that's provided to that network of 5,000 MLSs:

• Every merchant needs to work with us; there's no reason any merchant should not say yes.
• Here's a sales script. Repeat it word for word to a merchant in person or over the telephone. Let's role play so I can see how good you can memorize this script. Make sure to breathe and speak slowly now. You can do it.
• If you find a merchant's current pain point, attack it vehemently, and make sure to memorize this list of objections so when a merchant says X, you say Y. Be relentless.
• Park your car down any street and take this binder full of brochures into any of the nearby retail shops to begin conversations. Stay out there at least 10 hours a day and you will be on your way to $100,000 per year.
• Open up the Yellow Pages and call merchants at random to promote our products. Make about 300 untargeted calls a day, and you will be on your way to $100,000 per year!

Here's how to really make it

As an alternative to the above tactics, I offer the following suggestions:

The opportunities today reside in the selling of complex solutions to resolve merchants' complex problems, not in selling basic merchant processing where, through the use of the Internet, most merchants know more about merchant processing than new MLSs.

• Begin with market research: Conduct secondary and primary market research to identify and become knowledgeable about new market opportunities and the unique, complex challenges, areas of confusion, regulatory and market changes merchants in those markets face.
• Continue with product innovation: The market research you conduct will enable you to determine the segments you want to serve and your unique value proposition. From here, envision your product and partner with service providers, manufacturers, etc., who can help bring your vision to the market.
• Structure your agreements: Make sure your compensation is structured with 100 percent lifetime vested residuals, starting from day one, with no minimum volume requirements, no minimum new deal quotas, etc., and no agent signup fees.
• Structure your strategic marketing: Determine how you will communicate with your particular segment and make sure you are well aware of all national, state, and local marketing regulations so that you can market legally and without potential consequence of fines or imprisonment.
• Structure your capital foundation: Use the 0 percent interest offers from many of the nation's top credit card issuers. They will usually make the offer in exchange for you paying an upfront 1 to 5 percent fee. For example, you could borrow $25,000 using one of your cards with a 0 percent interest promo for 18 months with a 3 percent upfront fee ($750). You could use the $25,000 for marketing, leads, data, etc., bring in new sales volume and pay off the card before the 0 percent interest promo ends. This means you will bet on an 18-month, $25,000 loan for only 3 percent.
• Widen your circle of influence: Network with other professionals at tradeshows, trade associations, chambers of commerce, business clubs, and on LinkedIn and other social media to exchange referrals. You help build their businesses; in return, they help build yours.

Get out of the matrix

It's time to step out of the matrix of horrible sales training that is too prevalent today. Play to win. The successful players today are not randomly cold calling out of the Yellow Pages or popping up at merchant locations unannounced to pitch rate savings or free terminals.

Successful players are creating innovative products for targeted market segments, developing strategic networks, making good use of business capital to do wide-scale marketing via the diverse media available today. Break out of the matrix, follow what works, and sustain your career longevity.

John Tucker is Managing Member of 1st Capital Loans LLC, as well as an M.B.A. graduate and holder of three bachelor's degrees in accounting, business management and journalism. Tucker also has over nine years of professional experience in commercial finance and business development. You can contact him by email at tucker@1stcapitalloans.com or by telephone at 586-480-2140.

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