n the following interview with The Green Sheet, Harvey "Lee" Sullivan, a merchant level salesperson based in Sacramento, Calif., describes how he made the jump from a career in public service to one in the payment processing industry. He also outlines his steps for choosing a processor, names the merchants he prefers to work with and why, and shares what he calls the "Columbo" approach to cold calling.

The Green Sheet: What brought you into this business?

Harvey "Lee" Sullivan: After having worked in the public sector as a youth counselor, parole agent and management analyst for the state of California for 20 years, I thought I'd try business in the private sector. I started Business Payment Solutions, where the core product was bank drafting services for local health clubs and karate studios.

I quickly realized that the MPA earned at Pepperdine and my previous public sector experience left me ill prepared to make a living in business. Now I wish I had earned an MBA, as those skills are more widely appreciated in both the public and private sectors.

GS: How did you segue from bank drafting to merchant services?

HLS: To promote my business I joined a business networking organization. These organizations typically only allow [in] one member from each business category to avoid conflicts when a business referral is made [from one member to another].

When one of the members requested merchant services I declared that I would fill that slot. My untrained merchant services [career] began, [and I had] no idea of [how] to proceed or what to do next. The next two weeks were a nightmare trying to figure out enough of the business to complete my first deal.

GS: Describe your training. Was it adequate?

HLS: I got signed up with a processor and thought that was all I needed, but soon found out I needed to find an equipment provider and lease company and then figure out what a download was. Since the processor I chose previously didn't have a training program because of their low rates, I couldn't even rely on them.

I also realized that I needed to find a processor that did more than give me a rate sheet and point me toward the streets. At that time, there was no widespread use of the Internet so I couldn't just go online and shop for processors.

GS: What should a successful training program entail?

HLS: [At my company we] require agents to at least have a working knowledge of computer and Internet functionality, which wasn't an issue when I started. What I do, and teach my reps to do, is always represent the best interests of the merchant to your processor, and always represent the best interests of the processor to your merchants.

Never oversell a merchant. My reps know that we would rather walk away from a deal than try to sell a lease to a small restaurant with no [customers] in a "go nowhere" location with an inexperienced [owner].

GS:Is there anything specific that only experience could teach?

HLS: What I did learn from that experience was the value of good, solid customer relations. My first customer had to wait two weeks for what I can do today in 24 hours in my sleep, but because of the way he was treated he is a constant referral source. Just a couple of months ago I sang at his wedding.

GS: How do you choose a processor?

HLS: I choose a processor now based upon several factors:

a) Comprehensiveness of product mix.

b) Customer and technical support availability. Whether or not it is in-house and 24/7, and [equally] important, the hold time. Also, those companies that have cross-trained technical support and customer support personnel will save you a ton of time.

c) Whether or not there are policies in place, and actually followed, regarding competition with agents, either by selling additional products directly to your customers, or by knowingly signing up your reps directly. I've dealt with both situations with different companies within the last year.

d) Compensation plans. How long do you receive residuals on your merchants? Even lifetime residual plans often come with hidden caveats. Some are only paid while you are turning in a certain amount of deals within a given time or as long as your residual stream is above a certain level. In the event of a disability or some other circumstance preventing you from selling, this residual stream dries up and leaves you parched while the processor benefits from what would have been your money. Look for plans with lifetime residuals for the life of the account period.

e) Look for companies that have a training program and materials that are readily accessible. Products and laws are always changing.

GS: Are newcomers entering a different world?

HLS: Today, newcomers are blessed with an array of resources at their fingertips if they are technically savvy. Newcomers today have a much [larger] pool of resources from which to draw information regarding products, services, selling techniques, motivational information and online merchant services offered by some processors. [However,] no matter what the training resources are, the only thing that still matters is having the motivation to get before merchants and understand why you are there: It's not to sell terminals. What merchants will buy is business success through increased profits regardless of the means.

GS: What has changed significantly in the industry since you first started?

HLS: a) The advent of widespread Internet use by merchants. When a merchant mentions shopping for terminals on the Internet, forget profits from equipment sales unless a low payment, and therefore yield, is utilized.

b) The advent of free terminal programs. Like cell phone companies, if you don't at least have a free terminal program available to you, you will find it harder and harder to compete. Newcomers with little or no residual streams are presented with a rougher introduction to the good times this industry provides. However, this is easier to turn to your advantage in terms of merchant retention and therefore even greater residual streams in the future.

c) The Wal-Mart lawsuit settlement. Creates a great opportunity to discuss debit processing, the additional interchange tiers and promote online debit sales instead of the reduced debit card processing rates.

GS: Do you prefer to work with specific types of merchants?

HLS: I like working with new merchants, doctors and restaurants. New merchants are plentiful and need the service. You have a great chance if you get to them quick enough and have a marketing strategy that distinguishes you from the pack. If you can take your ad and interchange the name on it with any other company, and the ad is still accurate, you don't distinguish yourself.

Doctors have a hard time with insurance co-pays, and you can show them how a merchant account helps prevent them from writing off many co-pays they never receive. Showing high-end restaurants how to save with debit at the table makes you a hero and sometimes includes great meals.

GS: How do you approach cold calling?

HLS: With a merchant I have never met before, I like the Columbo approach: "Hey, why did you run that card like that and pay five dollars more than you had to?"

This often leads to them asking you questions, making you their consultant of choice at the moment. And if all goes well, they'll be asking you to stick around and check out their statements. This works better than walking in with a briefcase and tie much of the time.

GS: What, in your opinion, is the ethical state of this industry?

HLS: Working as an independent sales office with merchants on one hand and processors on the other sometimes creates an ethical dilemma. Honesty and integrity require that you only participate in transactions where everybody wins, which are extremely easy in this business.

In past years, with relatively large sums of money [being] made with large leases and high equipment prices a lot of "get rich quick regardless of ethics" types were drawn to the business. [This] had somewhat of a tarnished reputation because of it. Now that the immediate cash is not as lucrative, I believe a more honest, service-oriented MLS-force has changed that image positively.

GS: How important are industry events and trade shows?

HLS: Fortunately, the local and national tradeshows as well as processor-sponsored events are available for training and to meet the voices you talk to on the phone every day.

This year alone I have attended the [Electronic Transactions Association] ETA, the [Western States Acquirers' Association] WSAA, and an event put on by United Bank Card in Ft. Lauderdale, Florida.

It's important to attend your processor's events to fully understand their products and processes and facilitate easier transactions.

It is just as important to attend the regional association events to get a broader perspective of the whole industry. If you don't attend these events, your view of the industry can only be myopic. There is no other way to see the overall industry.

GS: What has kept you in this industry?

HLS: I stay in this industry because it is always changing and challenging you to do the best at staying on top of new products and developments. If you do, you will provide invaluable service to your clients and be handsomely rewarded in terms of compensation and the joy [from] the friendships you make being a true resource for your merchants.

GS: How has The Green Sheet helped you?

HLS: My first true glimpse of the industry was when a friend brought me a copy of The Green Sheet, which was about half the size it is today. Explaining the virtues of The Green Sheet in this forum would be preaching to the choir.

I will say, however, that without the resources discovered through The Green Sheet my merchant services career would have been short lived.

GS: Any final comments?

HLS: Having come from the snail-paced, decision-making public sector to the lightning-quick decisions and changes of this industry has been exhilarating. The opportunity to make substantial income based upon one's own decisions ... of what to present and to [whom] is unique.

When I left public service I believed that going into the merchant services business was reducing my life from dealing with people to dealing with widgets.

However, I know that by leveraging my knowledge and experience in this industry, to place widgets correctly greatly improves the lives of my clients by giving them the tools to not only stay in business but to prosper.