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Education
Conversely, you may find the MLS is
the salt of the earth, contributes time
to charitable organizations and has an
impeccable background. This information
is extremely important.
3. The best thing to do is to meet Joe MLS
in person for lunch. Look him in the eye,
see how he dresses and presents himself
and, most importantly, find out how
smart he is. I've used one rule over and
over in these situations: always be the one
asking questions. If possible, never offer
information about you or your company
that your competitor could use against
you. If you do it right, the conversation
will be one sided without appearing so.
Plan B applied
Here's an example of how I used this method to
respond to the competitive threat. Merchants
started to cancel and were switching to the
same company. Often, it was the same MLS.
I met with a merchant who had already
moved and obtained a copy of the app, the
competitor's marketing material and the name
of the MLS.
The MLS was quoting a flat rate pricing,
which is not uncommon, but it was under cost.
It doesn't take a genius to know that not only
will this not work, but it will also most likely
change. The app showed just one rate, and
the only other fees were an annual fee and a
PCI fee. Other than that, it was 1.85 percent.
We waited two months to see what was on
the statement, and the merchant was being
charged exactly what was on the app. At this
point, all I could do was say good luck, and if
anything changes, call me.
About six months later, I received a call from
another former merchant who had switched
to this ISO and wanted to come back,
claiming he'd been misled by this ISO. I was
able to obtain the app, current statement and
marketing program information. Everything
was the same except for the statement. The
rates were significantly higher than the rates
on the app.
The merchant asked the ISO why the statement
rates were higher than those on the app. The
answer was Visa and Mastercard had enacted
rate increases in April and in October, which
allowed the ISO to increase rates despite the
fact that neither card brand increase pertained
to this merchant. The merchant also asked
why he was being charged fees unrelated to Visa and Mastercard,
and the company said the merchant was sent a letter announcing
fee changes.
Much to gain
So what did I achieve from this exercise? I now knew how this ISO
worked and what the company's weak points were for use in the
future. My company then provided each of our MLSs a copy of the
competitor's marketing material, copy of the app (merchant name
blacked out) and copy of the statement showing the discrepancy in
the rates. (I did call one of the competing MLSs to have lunch, but
the rep declined.)
Whether or not you want to use any of my suggestions is up to you
but consider this. When I started in this business in 1995, few MLSs
were in the market. Most, MLSs did not pursue existing merchants
in an effort to move them. That's because at best only 60 percent of
merchants were taking credit cards. A huge untapped market of
merchants wanted to take cards and buy or lease a terminal. That
was where the money was.
In addition, the pricing was simple and concise. There were nowhere
near the fees that have been added over the years. Thus, we all made
far more money with little competition, including the banks, which
wouldn't even take card-not-present merchants.
Today the industry has flipped 180 degrees, and if you don't know
your competition and are not willing to use the information you
have compiled on them to your advantage, the odds are you will
continue to lose merchants at an alarming rate.
Steve Norell is director of sales at US Merchant Services Inc. Based in Port St. Lucie,
Fla., he oversees the USMS sales force and maintains the company's bank and proces-
sor relationships. You can reach him by email at steven@usmsllc.com or by phone
at 772-220-7515.
Marketing is a necessity for every
business, large and small.
707.284.1686
Sales@greensheet.com
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