By Allen Kopelman
Nationwide Payment Systems Inc.
In business and in life, if you want a partner to stick around, you need to keep things fresh and exciting. That's what selling value-adds can do. Selling software, point of sale and other business solutions can help create long-term partnerships with vendors and merchants.
In a healthy partnership, both parties are free to leave whenever they want but choose to stay for the value, convenience and security that the relationship provides. In addition, providing multiple services to merchants increases customer longevity.
As I think back on all the different value-added services that my business partner, Dave Burney, and I have sold over the years, (and believe me, it's a long list), I realize that not all of them were software-based. PIN pads, for example, were huge back in the day, before the Dodd-Frank Wall Street Reform and Consumer Protection Act capped debit interchange fees, forever changing the game.
Check services were another big wave: merchants rallied to convert paper checks into guaranteed electronic transactions with quick payouts, a fast ROI for investing in a countertop check scanner.
Gift cards were big in the early 2000s, and today's POS systems feature built-in gift and loyalty programs, not just for their own businesses, but for leading grocery, food service, hospitality and retail brands. Leasing was once a money-maker, but we haven't leased equipment in over a decade.
Successful merchant level salespeople (MLSs) do not sell on price or place generic countertop POS terminals. They sell value, service and solutions and make it harder for businesses to switch or want to switch by locking clients in with multiple services, such as the following:
All of the above service offerings make it harder for businesses to switch or want to switch.
If you're selling software and POS systems, working with companies that offer solutions and hardware will give your clients a better experience and ensure that everyone has skin in the game. While you may earn a bit less residual income by partnering with a full-service provider, it's less risky than partnering with providers that may be processor-agnostic today but going after your clients tomorrow when they get acquired, which seems to be the trend these days.
Value-added solutions come and go. It's important to stay current with payment, compliance and technology trends. Alternative lending and merchant cash advance (MCA) are good offerings for clients with decent credit that are eligible for lines of credit.
ATMs, in the right location with sufficient foot traffic and a trustworthy cash management service provider, make sense if your machines process at least 200 transactions a month. An ATM is a $3,000 investment, on average, so make sure you get your money back. Here are some other examples of services that are trending now:
A merchant with over 100 stores has been with us for years, getting not just processing, but free overnight equipment replacement, a gift card program, chargeback management and PCI compliance. When a competitor came knocking, its rep realized how much effort, resources and money would be needed to provide the same mix of products and services and went away.
Selling value-added services can help create stickiness and long-term customer relationships, but certain rules apply. Before presenting a solution to a merchant, make sure it passes the smell test. First and foremost, consider how the solution will specifically add value to a merchant's business and addressable market. Steer clear of any add-on product that the merchant will not use or that costs them a ton of money, because if you do that, you could lose the account.
We had a merchant who did two cash advances with us, then contracted with a broker who promised a better deal. The broker's contract was charging the merchant a higher percentage because the business wasn't open seven days a week. The merchant eventually left us altogether and went bankrupt.
Another merchant bought gift cards from us, never sold any, and ended up resenting us, even though we had advised against using the solution. The takeaway, in both cases, is to make sure merchants understand what they are getting and how they will use it.
The rules of selling go double for upselling. Figure out what solution will work for each client and customize, customize, customize. Make a goal of presenting at least one value-added service every month, and you'll be surprised by how many merchants are receptive to these offers. There is no one size fits all—merchant stickiness will always be proportionate to the number and quality of products and services you offer. 
Allen Kopelman, a serial entrepreneur is cofounder and CEO of Nationwide Payment Systems Inc. and host of B2B Vault: The Biz to Biz podcast. Email him at allen@npsbank.com and connect on LinkedIn https://www.linkedin.com/in/allenkopelman/ and Twitter @AllenKopelman
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