By Steven Feldshuh
Merchants' Choice Payment Solutions East
Surveys can provide businesses with a wealth of information about their customers and prospects. Today, more than ever, businesses are seeking details about customers' purchasing habits and are using survey data to retain their current customers and generate new business. And several companies, such as Silicon Valley-based SurveyMonkey, are focused entirely on providing a better experience through surveys.
I decided to do an informal survey on what merchant level salespeople (MLSs) are looking for in a processor. To make the survey somewhat reliable, I asked MLSs to evaluate products and services likely to be dear to their hearts, based on feedback from agents in the field over many years. I asked them to rank from 1 to 10 each item on a list I provided, 1 being least important and 10 being most important. They didn't have to order them, meaning some items could have the same rank.
Below are the questions I sent out. I was hoping that about 50 percent of the surveys would be returned. I sent these questions to MLSs who work with me or who had previously worked with me:
In looking at the responses from the field, it appeared that the No. 1 item that MLSs all agreed upon was the last item: Honesty of company. Not surprisingly, with a few exceptions, that item rated a 10, meaning it was most important. Given that all the sales agents this survey was sent to have had other industry relationships, this result wasn't unexpected.
I've had to deal with some uncomfortable situations with processors during the years. I have worked with companies that just stopped paying residuals; cut residuals by 50 percent, since I had no longer submitted new business; or gave reports that showed little or nothing. It's not unusual even today to find ISO groups that still have the rip-off mentality or who train their agents that the business is based on leasing equipment at high costs.
The next items in order of ranking were a virtual tie: Clear, low cost buy rates and Compensation/residual split. I received some comments on these items along with the check marks. Several agents stated they had signed agreements and though their Schedule A reflected an all-in cost of $0.04 (as an example), other factors bumped their cost up by $0.01 to $0.03. Other monthly fees were not fully spelled out, and some responses indicated they still were not sure how a BIN fee or bank sponsorship fee was calculated.
Regarding the residual split, I received two responses from MLSs who thought they were receiving a true 65 to 70 percent residual share of 100 percent, but it turned out to be 65 to 70 percent of what their sales office was receiving, which was only 75 percent out of the total.
So I learned it is important to spell out the fees, and indicate expenses as best as possible with notes or examples. It appears after reviewing some Schedule A's that accompanied the survey, (thank you guys) that listing expense items requires drilling down a bit and insuring that the agents understand it.
Remember if they omit an expense when writing an application, their profit margins won't be so exciting, and it does affect ISO profit margins as well.
Overwhelmingly, on almost every returned survey, these three items were next in line. I was surprised by the importance of platforms, since I thought that wouldn't be a significant factor. The growing consensus was that with all the growth of POS systems finding their way into even the smallest merchants, VAR sheets are being requested on a regular basis. The importance of being able to easily board merchants on processors integrated with software is a huge factor. We hope our own processor is reading this, because software integration eliminates additional fees to the merchant, and it is a speedier setup. Also, no one wants to refuse a merchant because your processor or processing platform doesn't work with the merchant's new software.
The significance of having an agent support person was a surprise: it came in with an average importance of only 5.5. Being a small ISO, I thought this would come in with a rating of 9 or 10. The only explanation I can think of is that our processor's customer service and tech support give above average support, and our duplication of what they do isn't as important as I thought it would be. I know my lead support person Georgia Safos is amazing at her job and spends most days solving the mysteries of our industry for our clients. But it also appears a lot of our agents never call us or call infrequently, so the importance of my office isn't high on the food chain.
Across the board without exception these two topics scored the lowest, or of least importance. It may be that most of our group members already are familiar with terminals, POS systems, gift cards and loyalty products, and they are not looking to change. The product offering finished a little below terminal offering. Products, with the exception of credit and debit card processing, scored the lowest.
I do believe a lot of the products pushed by processors today have merit; however, for the small merchant looking at pricing and support, having analytics or payroll products just doesn't seem to have enough momentum for our agents. I absolutely wish that we could sell products like these to merchants for many reasons, but it appears our MLSs are myopic in their approach to businesses.
This survey did not have control groups, and the return rate was a disappointing 10 percent, not 50 percent. Several participants didn't sign their surveys and several others who did sign didn't want their names mentioned in this article.
I would like to thank the following for not only completing and returning the survey, but also for providing additional comments and related documents: Richard Reid; Dominick Viesta; Gary Shull; James Cawdron; Ed Dimas; Laura Kowalsky; Rafael Guzman. Because of their support and the support of many other MLSs, I was able to put together these thoughts.
Steven Feldshuh, President of Merchants' Choice Payment Solutions East, has 18 years' experience in sales and ISO development. Directly prior to joining MCPSE in 2012, he was President of Payment Partners. In his current position, Steven devotes the bulk of his time to assisting agents in building their portfolios. Contact him by email at firstname.lastname@example.org or by phone at 212-392-9202.
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