By Dee and Emily Karawadra
Impact PaySystem
In this edition of Street SmartsSM, we discuss the connections and synergy between value-added products and services, a consultative approach to sales, and strong customer retention. It's a winning combination.
How can you be perceived as the best choice in a market full of ISOs, merchant level salespeople (MLSs), processors and other Merchant Service Providers (MSPs)? The competition is steep: merchants are marketed to daily via targeted ads, social media, telemarketing and cold calls in their business. What can an agent do to stand out from the crowd?
Our experience tells us that the answer is service and value-added products. Value-added services are additional benefits consumers can receive when they purchase a product or service. They are add-ons that can go a long way toward building goodwill and customer loyalty.
In addition, value-adds can significantly increase revenue if offered for a discounted price to customers. Today, for example, value-added products and services can come in the form of gateway services, POS integration, gift and loyalty cards and programs, sales data marketing platforms, mobile processing apps, faster access to cash, and merchant loans.
According to a report by Deloitte, merchants are willing to pay 7 to 9 percent to companies like Google that envelop the ecommerce payment transaction within the online shopping context and deliver sales. This means a merchant will pay 7 to 9 percent for a full payment service that delivers sales and ease of use versus 2 percent interchange for payments alone.
This should be music to the ears of professionals in the merchant services industry. Finding value-added products that will best enhance your merchants' payment experience is the key to success. MSPs know how to sell terminals to merchants as a solution, and they do this every day. But what we need to refocus on is selling them a terminal or solution that is more sophisticated and supports value-added applications.
We see this in solutions like the Clover, Poynt and various POS systems. With these, merchants can utilize add-on services. A time clock, payroll, age verification, gateways, gift and loyalty cards, and sales tracking services are just a few.
Today, a well-versed MLS can use gateways as a value-added product to secure long-term business from merchants. As an ISO or MLS, you should be able to observe a POS system and do the homework of figuring out where it can be placed. Is that POS certified on your processor? If not, is it certified on a gateway you have access to? Once you establish the connection and know how to board it, tie in your value-added products, such as same-day or next-day funding or a gift card solution. By figuring out the logistics to board the deal, you will demonstrate your credibility to your merchant.
Often merchants have had little to no luck getting in touch with their POS merchant service providers, as they were signed up when they purchased their POS systems. They have no idea that they have options or that in most cases, they can change processors, provided the processor is certified.
The ability to take a consultative approach in offering your products and services is a necessity with today's more complicated merchant setups. I often tell our MLSs and sales partners that I welcome the more complicated merchant deals because it does give me the ability to consult and find solutions that they need. This allows us to go in and add on other products and services to help ensure the longevity of the relationship. We are able to do this and often are not offering them any savings, but rather a solution and convenience.
One of my passions in the payments industry is the creation and use of technology. As we progress through the evolving payment space we see the need for new technology. The traditional stand-alone terminal does not fill the need of the vast majority of merchants any longer. The need to streamline services and convenience has far exceeded the capabilities of traditional terminals. What this brings to us is the opportunity to add on products and services through an integrated approach.
Find a solution that does this with your ISO or one of your processor partners. If you're able to place First Data business, then the Clover is a great vehicle to do this with. If you have access to gateways likes USAePay, Authorize.net or eProcessing Network, their merchant console may be a great solution to deploy to merchants with an ecommerce site and brick-and-mortar shop.
Many of these systems load products and track inventory at multiple fulfillment centers and via ecommerce traffic. In addition, many of these gateways have automated clearing house (ACH) integrated into their console, where you can collect payments via ACH or recurring ACH.
The goal is for the agent to become a consultant, rather than just a sales rep. When you help link these types of value-added products in a single place, that brings value to the merchant and helps mitigate attrition.
Here are the questions that ISOs and MLSs and other MSPs need to ask themselves: How many value-added products and services can you tie into one merchant account? How do these services and products fill the needs of merchants and make their lives easier?
Are you their one-stop shop for payment related services and products?
Also, if you can let the answers to the following questions guide every merchant sale, your attrition rate will be extremely low: What are your products and services worth to your merchants? Why are merchants paying 5 to 9 percent to companies that have a POS system that also ties to the ecommerce shopping cart, yet are complaining about your pass-through plus 20 BPS? How do they define value?
For many merchants, it first comes down to cost. Are you providing a service or product that is saving them money or time? For some merchants time is money, and they value their time over the cost. Other merchants will spend every waking hour at their business, so time is not a concern, but cost is.
I hope this helps you think about the importance of consulting versus selling. Making full use of value-added products can help the bottom line, but more importantly, it will give you many a customer for life.
Safari njema! 
Dee Karawadra is president and CEO of Impact PaySystem, and Emily Karawadra is the company's chief financial officer. Since 2001, Impact PaySystem has been a leading provider of payment processing technologies and services to merchants throughout the United States. Through alliances with payments industry leaders such as Chase Paymentech, First Data, Buypass, Sage and more, Impact PaySystem offers tailored solutions to meet the unique needs of each merchant. Dee and Emily will welcome your questions and comments at dee@impactpays.com and emily@impactpays.com, respectively.
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