travel around the country speaking with ISOs, and one of the common things I hear is, "How can I make my relationship with my merchants stronger so that I am less likely to lose it to the next guy who walks in off the street after I have just left?"

The best answer I can give them is actually one I learned when I managed a cash-management sales department at a major California bank. We used to call it "putting the handcuffs on the customer" (the bank had an Old West theme - think stagecoach). By this we meant that, if you have done a good job of cross-selling, at some point the customer will be accustomed to using some critical services that you provide, and it will be too painful for them to switch to another bank.

For example, if you have your customers sending remittances to our lockbox, you are using our controlled disbursement point, you have stored repetitive templates for ACH origination and wire transfer, you have direct deposit of payroll, you are investing in our mutual funds, you have a credit line, we've issued you credit cards, etc., etc. It is a LOT of work to change banks.

Why do banks do this? The answer is that banks make most of their money off a small number of accounts. You have heard of the 80-20 rule (you make 80 percent of your money off 20 percent of your customers), but in banking it is more like a 110-10-30 rule: You make most of your money off 10 percent of your customers, lose money or break even with 30 percent of the customers and make a middling profit off the rest. The other reality is that a surprisingly high percentage of new accounts (at retail) are closed in the first 90 days, and it is (no surprise) very expensive to get a new account.

How can ISOs learn from this experience? Most ISOs have done a good job of handling the merchant's credit and debit processing, but often there are few additional "hooks" to cement the merchant relationship. The marketplace is so competitive today that it is not good enough just to provide satisfactory processing and customer service. There already is enough churn with your own salespeople; you don't want to have churn with your customers, too! However, it is not just a question of throwing a bunch of options at the merchant and seeing what sticks; it is critical to be focused on critical services that the merchant needs that are similar in nature to transaction processing. We are constantly looking for applications like this, but they are hard to find.

Recently, we found an application that fits the bill. One of the most interesting aspects is that the solution also allows for paying for equipment for any ISO-related application, which I find to be very powerful. Last week I met with Dominic Antonini, who runs a company called Telcombrokers. Dom understands how the ISO world works and has tailored a solution accordingly.

Question: What are the advantages of your company?

Answer: Telcombrokers is a master agency representing the products of most major telecom providers. We offer customers the best rates we have negotiated for local, long distance, Internet and data services. The customer gets a rate discount by going through us, but the service, customer service and billing are still provided directly by the carriers, ATT, MCI, Sprint, Qwest, Pac Bell, etc. We use our volume to negotiate for our customers, then we get a percentage of their bills each month from the carrier we switch the customers to. We must switch the customers to get paid.

Q: Why are you interested in working with ISOs?

A: We are always looking to partner with sales professionals that deal with business decision-makers. I believe ISOs can leverage their existing relationships to bring in telecom business and create additional revenue streams for themselves. Also, by bundling products and offering more services, they can provide bigger solutions and get in to more accounts. An example is "Equipment for Services."

Q: What is "Equipment for Services?"

A: We are always able to save customers money, but sometimes customers want something more tangible. One of our carriers will offer large customers who spend more than $10,000 per month this option. Instead of just lowering their rates, they will work an equipment lease into the deal. The customers can lease any equipment they want, and a portion of their phone bill goes to the lease payment. Many times customers have to pay only a small portion of the lease or even none at all as long as they stay with the service. Let's say a customer spending $15,000 a month can save 30 percent by switching. Instead, we can offer them 10 percent savings and have the carrier pay a lease payment for them up to $3,000 per month! ISOs wanting to get large customers to lease equipment can overcome the equipment cost by having the carrier pay the lease payments for the customer.

Q: What are some other cost-justification options you have?

A: Even if customers do not qualify for Equipment for Services, we have a simple spreadsheet that shows customers how much they will save if they switch to a plan we recommend. It shows the savings on a monthly and annual basis. If a customer is spending $2,500 a month on phone services and we show them how to save 35 percent, then in effect they can pay for a new service or equipment that costs $875 a month straight out of their savings.

Q: How much do companies really save?

A: I have found savings for every company who has ever let me look at their phone bills. The average savings are about 25-35 percent, but I have many customers that have saved more than 65 percent if they switch both their local and long-distance service.

Q: Is telecom experience needed to get started?

A: We offer both "Referral Agent" and "Managed Agent" programs. As a referral agent, an ISO will provide a warm introduction to the customers. We will copy them on our recommendations and savings proposals and do all of the work. When we sign the customer, we share a part of our commission with the person who referred us in. The next step up for someone who wants to be more involved and get more commission is what we call a "Managed Agent." As a Managed Agent you are given a sales manager that helps you every step of the way. Your sales manager will have all of the knowledge and experience needed and will receive an override on what you sell. This motivates the sales managers to do all they can to help you close deals! By bundling Telecom with merchant transaction sales, I think a sales person can increase their income by 50 percent and create a base of more loyal customers. See our Web site at www.telcombrokers.com for more information.

Brandes Elitch is National Accounts Manager for CrossCheck, Inc. He can be reached at brandese@cross-check.com.