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Features
Improve merchant retention:
Five quick steps
ecently, ePay Consulting Services contacted 2. Determine resource capacity: Most retention
The Green Sheet to share results from its latest operations balance resources between inbound
survey of acquirers and to offer tips on how and outbound retention campaigns and can
R payment businesses can be more effective in encounter constraints to allocated resources to other
retaining their merchant customers. campaigns.
According to ePay's report on the survey, titled Merchant Management should consider the capacity
Acquiring: Leading Practices in Retention Management, requirements to optimize workflow management
attrition is a growing concern for the payments industry. of its proactive retention campaign (for example, we
"As many as 50 percent of respondents are facing rising have five reps available that can contact 30 merchants
attrition of their merchant business with attrition rates each per week). In cases where there are resource
ranging from 20 to 25 percent," the consultancy found constraints, consider leveraging digital channels,
after surveying a cross-section of ISOs and acquirers statement messaging and email campaigns to target
that had "collectively transacted $550 billion in bankcard lower priority merchants.
sales for more than 1 million merchants."
3. Prioritize target customers: Once the business has
In addition, ePay stated that in an effort "to stem rising a view into its resource capacity and other channels
attrition rates, more than 60 percent say they have as part of its proactive retention campaign, the
changed the type of offers presented to merchants today target list described in step 1 should be prioritized
compared to three years ago." However, ePay found that and segmented based on key factors and thresholds
such offers are focused on price, and ePay believes this to yield better and faster results (for example, top
"is clearly contributing to the price wars" and not aiding priority merchants are based on defined revenue
with retention. and score thresholds, if applicable, and should be
contacted by a rep).
The consultancy endorses a more proactive approach,
claiming that those who implement a proactive strategy 4. Conduct pre-work: Often times, retention teams
focused on improved execution and timing experience may need to gather information and conduct
an attrition rate that is 2 percent lower than those whose analysis upfront in order to know more about the
approach is merely reactive. It goes without saying that customer and identify opportunities that will help
having a retention team is crucial. In addition, ePay the merchant before making the initial contact.
provided five steps designed to shape such a team to
become maximally proactive. Some examples of pre-work activities may include
scanning the prioritized list of target merchants
Excerpted, with permission, from materials provided by for business exclusions, current account status,
ePay, the five steps are: recent call history, last rate review and rate changes,
analysis of current rates and fees, downgrade
1. Identify at risk customers: Narrow your focus history, current equipment and account set-up,
to only those merchants with a high propensity and potential cross-sell opportunities. As a result,
to attrite by applying a data-driven approach. reps may find that an offer can be made without
While only few companies in the industry have negatively impacting margins and, in some cases,
begun to leverage predictive analytics and scoring add new net revenue.
methodologies to manage retention, most likely due
to limited resources and capabilities in this area, the 5. Determine best offer and execute: Based on the
survey results showed there is significant interest in outcome of the pre-work, retention representatives
using this type of approach in 2014 and beyond. should then be able to assign the best fit offer
available to specific merchants and be prepared to
For less investment and therefore less sophisticated deliver consultative services to merchants. Some
tactics, internal triggers and analysis such as companies experience lower attrition rates and
impending contract expirations, call history organic growth with fewer "give backs" when using
analysis and sales volume alerts can be leveraged a well designed proactive campaign.
to help identify at risk merchants. However, there
are drawbacks with using less sophisticated tactics For a full copy of the report, please visit www.
which can lead to too much noise in the data, epayconsulting.com.
inefficiencies and what some refer to as the risk of
"waking up a sleeping giant."
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53
Improve merchant retention:
Five quick steps
ecently, ePay Consulting Services contacted 2. Determine resource capacity: Most retention
The Green Sheet to share results from its latest operations balance resources between inbound
survey of acquirers and to offer tips on how and outbound retention campaigns and can
R payment businesses can be more effective in encounter constraints to allocated resources to other
retaining their merchant customers. campaigns.
According to ePay's report on the survey, titled Merchant Management should consider the capacity
Acquiring: Leading Practices in Retention Management, requirements to optimize workflow management
attrition is a growing concern for the payments industry. of its proactive retention campaign (for example, we
"As many as 50 percent of respondents are facing rising have five reps available that can contact 30 merchants
attrition of their merchant business with attrition rates each per week). In cases where there are resource
ranging from 20 to 25 percent," the consultancy found constraints, consider leveraging digital channels,
after surveying a cross-section of ISOs and acquirers statement messaging and email campaigns to target
that had "collectively transacted $550 billion in bankcard lower priority merchants.
sales for more than 1 million merchants."
3. Prioritize target customers: Once the business has
In addition, ePay stated that in an effort "to stem rising a view into its resource capacity and other channels
attrition rates, more than 60 percent say they have as part of its proactive retention campaign, the
changed the type of offers presented to merchants today target list described in step 1 should be prioritized
compared to three years ago." However, ePay found that and segmented based on key factors and thresholds
such offers are focused on price, and ePay believes this to yield better and faster results (for example, top
"is clearly contributing to the price wars" and not aiding priority merchants are based on defined revenue
with retention. and score thresholds, if applicable, and should be
contacted by a rep).
The consultancy endorses a more proactive approach,
claiming that those who implement a proactive strategy 4. Conduct pre-work: Often times, retention teams
focused on improved execution and timing experience may need to gather information and conduct
an attrition rate that is 2 percent lower than those whose analysis upfront in order to know more about the
approach is merely reactive. It goes without saying that customer and identify opportunities that will help
having a retention team is crucial. In addition, ePay the merchant before making the initial contact.
provided five steps designed to shape such a team to
become maximally proactive. Some examples of pre-work activities may include
scanning the prioritized list of target merchants
Excerpted, with permission, from materials provided by for business exclusions, current account status,
ePay, the five steps are: recent call history, last rate review and rate changes,
analysis of current rates and fees, downgrade
1. Identify at risk customers: Narrow your focus history, current equipment and account set-up,
to only those merchants with a high propensity and potential cross-sell opportunities. As a result,
to attrite by applying a data-driven approach. reps may find that an offer can be made without
While only few companies in the industry have negatively impacting margins and, in some cases,
begun to leverage predictive analytics and scoring add new net revenue.
methodologies to manage retention, most likely due
to limited resources and capabilities in this area, the 5. Determine best offer and execute: Based on the
survey results showed there is significant interest in outcome of the pre-work, retention representatives
using this type of approach in 2014 and beyond. should then be able to assign the best fit offer
available to specific merchants and be prepared to
For less investment and therefore less sophisticated deliver consultative services to merchants. Some
tactics, internal triggers and analysis such as companies experience lower attrition rates and
impending contract expirations, call history organic growth with fewer "give backs" when using
analysis and sales volume alerts can be leveraged a well designed proactive campaign.
to help identify at risk merchants. However, there
are drawbacks with using less sophisticated tactics For a full copy of the report, please visit www.
which can lead to too much noise in the data, epayconsulting.com.
inefficiencies and what some refer to as the risk of
"waking up a sleeping giant."
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