The quintessential value-add

In an age when ISOs struggle to boost profit margins and distinguish themselves from competitors, the services of National Benefit Programs LLC represent the ultimate value-add, according to NBP Chief Executive Officer Mark Zisholtz.

"Many ISOs are looking for ways to increase their revenue base, and one way to do it is with value-added products," Zisholtz said. "Well, we have the most comprehensive and best merchant benefits product in the entire industry. And what makes these benefits special is they're all business benefits."

NBP's merchant benefit program offers 50 total benefits, spanning 20 business categories. For example, the category of shipping might include UPS services as one benefit and other mail or shipping services as additional benefits. Further offerings include office supplies, hotels, car rentals, legal services, payroll services, web design, computer products, and document and data destruction, among others.

A club meant for business

All services are purchased in bulk and sold, through resellers, at major discounts to merchants. NBP markets the program to banks and ISOs. "For ISOs and other merchant providers that want to cut attrition and increase revenue, this is a great way to do it," Zisholtz said. "We have improved on the merchant club concept, which usually consists of just a few benefits, and we've expanded that into a full suite."

The program functions similarly to a discount club card used at retailers or grocery stores. The difference is that NBP's product is marketed to businesses, not individuals, and its discounts apply to a broad range of services offered by a host of providers, each one individually contracted with NBP, according to NPB President and Director of Sales Gary Alloy.

"If you want a pair of shoes, if you want a discount at the cleaners, don't come to my website," Alloy said. "But if you want shipping services, come to my website. If you want car rental and electronics discounts, and if you want legal benefits through the Legal Club of America - if you want things that help businesses grow and save money - come to my website. We are in the business of helping other businesses grow and thrive."

A tool to boost retention, revenue

For ISOs and merchant level salespeople (MLSs), the merchant benefit program is a valuable tool in driving revenue and retention, according to Zisholtz. He said ISOs pay a monthly fee to subscribe to the merchant benefit program, and an added perk is that ISOs and MLSs selling the program are themselves eligible for the program - free of additional charge. "Obviously, that increases loyalty and increases competence," Zisholtz said.

Zisholtz noted that resellers are required to buy the merchant benefit program as it is packaged, rather than picking and choosing what program services to buy; however, they can integrate their own value-adds into NBP's product suite. "They have the ability to add whatever benefits they want," Zisholtz said, adding that resellers also have considerable leeway regarding pricing.

Alloy said that merchants commonly benefit from services they wouldn't normally think of purchasing and that the breadth of offerings ensures the package is optimized for the greatest number of people. "There may be a benefit that I love that somebody else might not, and somebody else might love a benefit that I'm not interested in," Alloy said. "Our goal is to take care of everybody's needs, including ones they might not [foresee]."

Assistance with marketing, implementation

The merchant benefit program also includes a multilayered marketing campaign for ISOs. So when they join the program, ISOs must upgrade their websites to include listings and descriptions of the NBP product suite, as well as incorporate technical changes for hooking into NBP's platform.

All of that work is performed by NBP staffers, usually in conjunction with one technical point-person working for the ISO. NBP further relieves the ISO of burden by overseeing the continued maintenance of the site and the online marketing of value-adds, Zisholtz said.

As for design, ISOs can decide either to change their website's overall aesthetic or simply incorporate NBP into their existing design and color scheme. "We custom build every merchant benefit site, and it's completely private-labeled," Zisholtz noted.

In addition to providing web help, NBP's marketing services also include a private-label email campaign to prospective and existing merchant customers, according to Zisholtz. "We'll typically email the merchant twice a month, and it will look to them like the email is coming directly from our client," he said. "We can do a generalized email campaign or, if the ISO wants to feature certain benefits or products, then we'll focus on those."

Incomparable volume discounts

NBP's services are available not only to a business itself (for, say, ordering bulk office supplies), but also to each individual worker it employs.

Thus, employees of companies enrolled in the merchant benefit program can use the benefits for personal needs related to travel, shipping, legal services and the like. "Primarily merchants use it, but they can share it with their employees," Zisholtz said.

According to Alloy, NBP is the country's largest provider of bulk services and products to businesses. "Nobody has a program as big as ours," he said. "And when I sign a contract with a vendor, they have to give me a benefit that's better than anywhere else, including anything that's offered on [the Internet].

"You want to get a benefit from UPS? It won't be as good as my benefit [on shipping]. Nobody is ever going to call me up and say, 'I can get this benefit equal to or better than what you offer.'"

NBP's services are not only cheap but uniformly first-rate, Zisholtz pointed out. "We're saying, 'Hey UPS, we're going to provide you with a whole bunch of volume, and in exchange for that volume, we want to be able to buy your services at a much lower cost," he said.

Zisholtz also said NBP has every incentive to see its services used. "We provide access to large numbers of people out there, and what we're doing is leveraging that power. And ... we want people to use our benefits.

The more people use our program, the more leverage we have to negotiate top quality discounts with our partners. That's why our discounts aren't available to the general public - because we're providing our [distribution] partners with business."

A program meant to be used

To further emphasize how important it is for businesses to use the benefits the program provides, Zisholtz contrasted NBP's offering with insurance plans, in which the providers hope clients use the provisions as little as possible.

NBP doesn't seek to deny or restrict benefits in any way; it instead actively encourages merchants to use them.

Zisholtz added that merchants who seek legal help get legal help; employees who require dental care receive it; and a business that orders huge quantities of discounted office supplies gets the quantity it demands - no roadblocks, no exceptions.

Zisholtz also contrasted NBP's program with offerings that typically function as loss leaders - the attractive but ultimately unprofitable services that ISOs, as well as many other businesses, use to entice prospective customers but which they prefer those individuals would never take advantage of.

"As an example, some ISOs or processors will have a terminal replacement program but won't charge a fee for it, and it becomes a loss leader," Zisholtz said. "Others may charge for it, but there's low participation. We'll take a program that's generally unsuccessful, integrate it into our package and make it highly profitable."

Growth based on customers' needs

Zisholtz and Alloy co-founded NBP in 2009, and both have backgrounds that overlap considerably with their current work. Zisholtz was a lawyer who specialized in corporate and employment law, and he dealt extensively with the merchant benefits industry. Alloy has worked in the discount benefits industry for more than 35 years.

Zisholtz said that upon founding NBP, both he and Alloy called merchants around the country with a single question: what value-added benefits do you lack that you're most in need of? In large part, the responses they got from that question determined what NBP included among its benefits.

At the end of 2011, NBP added another officer when it brought in Diane Vogt Faro as its Executive Vice President. Faro has worked for over 30 years in the payments industry, including as President of Global Merchant Services for First Data Corp.

She was also the President of the Electronic Transactions Association for the 2004 - 2005 term and is a founder of the Women's Network in Electronic Transactions (W.net).

"She brings a tremendous amount of experience and industry knowledge, and the fact that she's part of our team is a very strong validation of the quality of our product," Zisholtz said.

The company continues to rely on feedback as it expands and tweaks its package to best meet the needs of the market. "We're constantly interacting with clients, and they give suggestions of benefits to get for them," Zisholtz said.

"We had a client who recently surveyed its merchants and asked what they'd like to see added. Wireless provider was the most popular response." Soon thereafter NBP added a wireless carrier to its benefits package. What comes next will, of course, depend on what NBP's customers want.

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