By Jeff Fortney
Whenever I write on a topic, it is my goal to provide an objective approach. I don't want emotions to have sway in any article; that would make it editorial in nature, not educational or informational. I have found it to be relatively easy to remain objective in almost all instances, despite challenges inherent in remaining objective when discussing one's profession.
However, as I write now about the pandemic and its effect on ISOs and merchant level salespeople (MLSs), it's difficult to avoid emotion. Our industry lost many good people as a direct result of COVID. We also lost many indirectly from the effects of the lockdown.
I remember the day the lockdown began as if it were yesterday. I know we all hoped it would be short-lived, but quietly we surmised the financial impact it would have. We may have hoped it would be no worse than a recession. In recessions, some merchants have a downturn in sales volume or are forced to close. Yet there are always others who are all but recession proof.
It was tough to admit the pandemic wasn't going to result in recession-like impacts and instead was going to result in a sudden stop in almost every way. As it happened, we couldn't help but be emotional. I know I was, and in talking with MLSs over the past 16 months, I know they were, too. Shock, concern, anger, fear, disorientation and other negative emotions often surfaced at the same time. In combination, they led to frustration. And frustration can be paralyzing if not met head on. The only way I know to address frustration is to take some action, any action.
After the shock wore off, I knew that the only way to tamp down my frustration was to reach out to each of my partners and have a conversation. My objective goal was to make sure they knew they were not alone, and to make sure they knew I was here and wanted to listen. I also hoped to help them come up with actions they could take immediately. My subjective goal was to talk to others who faced challenges similar to mine. I needed to know I was not alone.
It turned out the actions that worked for the colleagues and partners I contacted paralleled mine: call their partners and let them know they were not alone. Those conversations led to outbound calling to their merchant partners with three goals in mind: to listen to their concerns, to let merchants know they would support them in any way they could, and to determine what merchants planned as their next steps—even if they hadn't thought of any next steps yet. For restaurants, the actions centered on phone orders, online orders and pick up. They knew the shelf-life of their products was forcing them to do something. Retailers didn't have the same shelf-life pressures. As such, they tended to have little to no immediate actions planned.
During our calls, one consistent action was clear: agents were considering or even already removing the monthly minimums, if any. In some cases, it was prudent to treat merchants as seasonal businesses, turning off all fees. It was the right thing to do. But it wasn't an easy thing to do, for my colleagues knew it would cost them money as well. Nevertheless, many led with this as a conversation opener. They wanted their merchants to know clearly that we were all in the same boat.
As one month led into two and three, restaurants continued to adapt. MLSs discovered that the elimination of minimum fees didn't result in the extent of financial loss they anticipated. A large number of restaurants were processing at 60 percent or more of their previous monthly averages. For the retailers, though, it was a different story.
For MLSs, also known as independent sales agents, a PPP loan was likely not an option. Several ISOs, however, may have leveraged PPP loans. By month four, most MLSs became what can best be described as antsy. Success in our industry truly is found in selling. And agents wanted to sell. Some had tried to learn how to telemarket, but realized early that the skill sets for face-to-face selling and telemarketing were very different. (And even the most experienced telesales reps found merchants unwilling to engage with them).
As I continued conversations with ISOs and MLSs, I reminded them to monitor how the merchants in their market (specifically) reacted to this extended lockdown. I also noted that their reaction might require the agent's assistance.
For example, I had observed that many retailers were moving to curbside delivery. Nurseries would ask consumers what they wanted to purchase and bring it to their car. Since many consumers were homebound, a large number of them turned to gardening and landscaping. But curbside ordering and delivery proved to be slow, as nurseries typically did not have a handheld solution or other appropriate solution for this type of transaction. ISOs and MLSs who were in conversation with them found they could sell into these types of merchants.
From these and other observations, agents found success selling mobile solutions to their merchants. They found ways to support online item ordering using hosted payment pages. In essence, they were able to help their existing merchants sell, and in return, they were building loyalty. They also approached others to offer such solutions to prospects who were operating similarly to their current merchant customers. The opening line many used was, "How are you accepting cards today with curbside?" That question opened many doors.
Even so, the number of new merchants signed was low for most. The high-risk market was still seeing new signings, but the low-risk market production was the lowest I can remember in my many years in this business. It goes without saying that many in our industry suffered immensely. By February 2021, numerous merchants were able to open in some fashion, and the new normal took hold.
Today, we are still dealing with market instability. Some locations are open; others remain fully or partially closed. But in the new normal, we can't go back to the way we sold before, nor can we sell cost savings alone. Several factors have changed not only how we sell, but also to whom we sell. ISOs and MLSs that promote and rely exclusively upon one way to sell are finding it difficult to get sales.
Sadly, some agents will feel they can't adapt, fearing they won't be able to compete. I can say without question, they are wrong. That is what I intend to prove—starting with my next article.
Jeff Fortney is vice president ISO relations for Signature Payments. A long-time payments industry executive and mentor, Jeff is focused on strengthening and developing partnerships and evaluating new business opportunities. He can be reached at 214-458-1379.
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