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Article published in Issue Number: 070302

Merchant retention: Secure it with lists

By Biff Matthews, CardWare International

Doing everything possible to retain merchant accounts is well-worth the effort. Remember, your financial reward is residual income. Success requires a methodical, two-pronged strategy. The first kicks in at the time of sale, the second every week thereafter.

As ISOs and merchant level salespeople (MLSs), a major part of your strategy should be lists: Start with customized questions regarding your customers' equipment and software. Lists must reflect the applications and equipment in use.

Questions must also factor in implementation: power source, phone lines or network connection such as dial-up, digital subscriber line (DSL) or Wi-Fi.

An effective list should also contain contact information for decision-making, and the fall-back people for different functions (telephony, information technology and so forth) on various shifts when the owner will likely be unavailable.

The trip-up is merchants are sometimes clueless about operations. They may forget, for example, that they have check guarantee, age verification or purchasing card applications. But you must address all of these for successful, trouble-free boarding.

Post-sale follow-up

A post-sale checklist focuses on issues related to your contract and pricing. Do merchants fully understand what they're getting for their money? An old saying goes, There are always three versions for every conversation: what I said, what you hear, and what was actually uttered. Agent-merchant communications are like that.

Also, like everyone else, merchants typically do not read their contracts thoroughly. Endeavor to uncover potential post-sale objections. And understand that clarifications are not deal-breakers.

The fear of bearing bad news is common, but groundless. It's far better to face consequences upfront, rather than down the line. The end-game is to build relationships that produce referrals. If customers believe quick sales are more important to you than preventing and solving their problems, you'll never succeed.

A few days after a sale _ even if there were no discernible gray areas to address _ it's time for a phone call to review the salient points of the contract. Ask questions about the agreement and its pricing. Test for understanding. You're not looking for trouble; you're just trying to anticipate and short-circuit potential difficulties.

Quality check

When a company I know receives an application from an MLS, its next step is a carefully constructed phone call to ensure the words in the contract and the merchant's grasp of their meaning are in sync. The company does not proceed unless this is demonstrated.

If the phone call uncovers discrepancies, the company will renegotiate a portion of the contract or return it to the MLS for revision. These calls, not the sales calls, are the true deal-closers.

Absent this type of process, make your own quality-check phone calls. Then, move on to installation and implementation - the intermediary steps toward long-term retention.


At this stage, it's vital to determine dates that are important to your merchants. For example, seasonal sales create the need for additional POS terminals. Planning for this is good customer service.

Build important dates into a customer relationship management database. Then, two weeks before a planned sales event, suggest an additional POS terminal and supplies to accommodate the added activity. Also, inform your processor, so it does not become security-conscious due to a spike in transactions.

Keep track of relevant anniversary dates, too. Sending a card or e-mail to congratulate a merchant on his five-year anniversary in business demonstrates that you're paying attention.

Heads up!

Another important consideration is weather. Merchants in the Southeast, for example, are exposed to potential hurricane damage several months every year.

It's important to be prepared to rapidly swap out waterlogged equipment and replace supplies. Advance planning is required to efficiently manage the aftermath of natural disasters.

Local news is also important. Something as seemingly innocuous as a street improvement means telephone lines are likely to go in and out of service for extended periods.

It might be a good time to suggest a wireless system. Merchants might also want to consider working with other retailers to establish a Wi-Fi hot spot.

One-time events, such as fires, might result in smoke and fire damage to merchants you serve. If so, how will this affect them, and for how long? Prepare contingency plans for various scenarios. You'll avoid panic and be rewarded with the loyalty - the retention - you seek.

Part of this process entails classifying your customers. If you're like most of us, the 80-20 rule applies: Craft your contingency plan so that you first take care of the customers who deliver 80% of your business.

What about you?

Additionally, do you have a contingency plan for your own business? Are you prepared for a weather event that adversely affects your office? Do you have a disaster plan? If so, that's great. But when was the last time you tested it?

Try this: Tell your vendor there's been a disaster, and ask how soon it can deliver 25 replacement terminals. If it indicates three weeks is required, and your contract says one week is allowed, what will the consequences be? Is the vendor going to reimburse you for expenses caused by lack of terminals?

Next, determine how to get replacement software. Then, tackle the biggest elephant in the room: Find out whether your processor really has redundant records in a fully accessible format.

Staying on top

Customer service involves more than planning for calamities. Software and security updates that affect merchants should be part of your ongoing conversations. Equally important are technology developments your customers will hear about from peers, the media and so forth.

Restaurants, for example, are moving to no-receipt transactions. Kiosks in many food establishments now allow ordering before customers are seated. Sometimes these kiosks have a payment capability.

Whatever is happening in your merchants' industries and communities is important to you, too. You want to bring ideas to your customers, not the other way around.

Consider a day at a tradeshow. Those held by the National Restaurant Association, National Retail Federation and Petroleum Marketers Association of America, for example, offer excellent opportunities to quickly learn about emerging technologies.

If tradeshows aren't the best solution for you, take advantage of seminars, webinars and other tools offered by equipment manufacturers, processors and software providers.

Get outside your comfort zone to see what your customers are facing. What you learn will not affect all of them. But your commitment to service will be rewarded tenfold.

Opt 'em in

One final idea on lists: Schedule some "permission marketing," through which merchants agree to receive regular communication from you. You don't want to overwhelm them, but substantive, relevant content is worth their time.

E-mail from parties unknown to recipients is losing its effectiveness - small wonder, since about 92% of all e-mail is spam. By garnering permission to add someone to an e-mail list, you assure your message is welcome, rather than ignored, or, worse, damaging to your business.

Focus on maximizing your residuals. Everyone will win. And you may never have to cold call again.

Biff Matthews is President of Thirteen Inc., the parent company of CardWare International, based in Heath, Ohio. He is one of 12 founding members of the Electronic Transactions Association, serving on its board, advisory board and committees. Call him at 740-522-2150 or e-mail him at

Article published in issue number 070302

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