here is an old saying: "A fool and his money are soon parted." I want to know how the fool got the money in the first place. As part of the merchant processing business and a reader of The Green Sheet, I can only assume that you are not a fool, but rather someone who wants to be successful.

In this article, I list 12 important steps you should take to build a productive and valuable sales organization and three steps to ensure that you end up with the value that you have earned.

1. Plan Your Organization

   The best merchant processing sales groups concentrate equally on sales and customer service. I have seen too many groups-top-heavy with sales or technical support-and they invariably fail. Think of both sides of the equation.

   For example, Electronic Exchange Systems (EXS) was started twelve years ago. My partner, a customer service manager, and I, a marketing manager (both considered equal parts of the company), have learned the value of maintaining a balanced organization. Whenever we moved in one direction more than another, the company suffered. Think of your organization as a true partnership of sales and service.
   
   

2. Decide on Your Marketing Plan

   Determine the basic marketing tools you will use, and then put your plan into motion and be patient. Keep in mind that all of the various ways to reach your prospects have both value and faults. Whether you use mailers, telemarketing (I will explore this topic in a future article) or door-to-door direct sales, if you monitor the results and are willing to adjust your plan according to the demands of the marketplace, you will make sales.
   
   

3. Pick Your Processing Path

   If you sign with a down-line organization or directly with an acquirer, try to get as close to the processing source as possible. Find out who makes the underwriting decisions, how to get your downloads, where the originating information is located and whether you are first, second or third in line.

   Also, check references of the office that supports you and to which you send your business, and check the references of the processor. Don't go into this business with blinders on. There are many respectful players in this industry, but there are also many who are not. Be careful.
   
   

4. Study Sales Techniques

   Much of your efforts will be lost if you don't understand that the sales job is a trained effort. You need to think about it, train on it and teach it. Fortunately, there are many sales books available that can help you with the sales cycle and sales techniques, including cold calling, handling objections and closing. No one is a born salesperson, but all of us can sell if we understand that it requires a trained skill set.
   
   

5. Study This Industry

   This industry is constantly changing, and it presents many challenges. There is also very little documented information available to help you understand the industry. There are many confusing and overlapping concepts and terms such as determining how to read statements and what happens to the money, capture, pre-authorizations and void.

   Do your research; credible sources of training are available to you. The Electronic Transactions Association (ETA) conducts an excellent basic training course; EXS and other acquirers offer many options for training such as in person, on conference calls or through Web sites. Find these resources, and then use them to study and learn the business.
   
   

6. Make Value-added Products Part of Your Arsenal

   Value-added products make you the expert, give you presentation material and provide other streams of income. Remember: the days of simply lowering rates to uneducated merchants to get easy business are over.

   The more products you sell to merchants the longer you will retain those merchants and the residuals. EXS believes that the magic number is selling two additional products related to processing in order to solidify a merchant relationship forever.
   
   

7. Work on Building Multi-streams of Income

   Don't get complacent with income coming in from processing residuals. Unlucky things do happen: checks don't show up, mistakes are made, and offices go away. Even when you get problems corrected, it still can take months to straighten out an accounting error.

   Build up streams of funds from other sources. Check services, ACH services (we have built this into a very lucrative relationship), American Express income, loyalty programs and supplies are just a few ways to add additional streams of income. Don't depend on one source of income to run your company.
   
   

8. Don't Put All of Your Eggs in One Basket

   Even if you have a contract with a processor and you are happy, cover your back. Have an alternate source for all your services. Situations completely out of your control such as acquisitions, underwriting changes and conversions can affect the way you do business today. In order to ensure the continuity of your sales efforts, make sure you can move quickly and that you have an alternate source for your business. Don't get caught holding applications with nowhere to send them.
   
   

9. Mine Your Merchants

   The first sale is the hardest. Look to your merchant base. You can sell upgrades and additional products to your merchants along with supplies. Every time you make contact with merchants ask them for referrals. This is the best business for referrals I have experienced in my 30 years of sales. Work your merchants for additional income and future business.
   
   

10. Sell at a Fair Price

    Typically, competition and market pressures determine the price of a product in the marketplace. But in our industry, it is hard to determine the correct selling price. If you sell too high, the next person that walks into a merchant location could threaten you and your leasing company with cancellation potential and a loss of income from the new sale. It happens. The leasing companies are not designed to have leases go bad; they will look for recourse.

    If you sell too low and too easily, you are not valuing your time, experience or your organization. Don't sell yourself short. It is too easy to sell for no profit. You have to find the correct selling price for your area and your type of merchants, but be fair. Take this concept to heart: If you sell at fair price, you will sell more and build up customers, prospects and residual income. Don't live and die on each terminal sale, and don't sell yourself out of business.
    
    

11. Don't Inventory Product

    Terminals and software can be easily drop shipped and remotely programmed. Don't carry inventory. It works against your cash flow, and it has IRS implications. Check prices of equipment with suppliers; prices range and there always seems to be a better deal available. If you purchase directly from your processor, keep them honest by checking prices on the open market.

    Finally, don't buy demonstration equipment unless you feel it is necessary to make sales. If an organization is trying to force equipment on you, then there may be other problems with that organization. Be careful with inventory, it is a company killer.

    
    
    

12. Be Consistent

    Work the hours, plan your work, do the job and look the part; this is the only way to be truly successful. Don't take Fridays off, don't go home early and don't give up. This is a profession, and the only way you are going to make it work is by being a professional.

1. Be Legal

   Make sure that your contracts with offices through which you are selling are thorough and protect your right to sell and your residual stream. Have a lawyer check the contracts. Make sure that the offices have the accreditation to write the contracts. Contact the processor to ensure that you have a solid foundation for your growth.

   What happens if a sale or acquisition occurs? You should not only ask this question, but you should get an answer that also makes sense. Be in compliance with the Visa/MasterCard rules and regulations, and represent yourself and your company in accordance with the associations' rules. Pay your sales tax, pay your payroll taxes and stay legal and in line with Visa and MasterCard and government agencies.

   
   
   

2. Don't Get Involved In Fraud or Misrepresentation

   The quickest way to lose your residuals and the ability to sell processing is to commit fraud. If you get leases funded without equipment, omit pricing on the merchant application and do not disclose hidden fees or cancellation polices; if you do, you are committing fraud. Acquirers do not want to take your residuals, but it is their responsibility to act in the best interest of their merchants, processors and sponsoring banks and all of the card associations.

   Don't put acquirers in a position that makes them take merchants and income from you. ISOs, monitor your sales representatives; you are responsible for their actions as much as your own. Stay on the legal, ethical and moral path, and you won't have to worry about your income. As long as you live up to your responsibilities, your income is safe and should be guaranteed. Be accountable and be responsible.

   
   
   

3. Keep Climbing the Ladder

   In this business, you should always be advancing toward the next level. Move from sales person to group, group to office, office to registration, registration to taking liability, and then you are destined to succeed. If you become complacent, attrition will eat away at your residuals and merchant base.

   Even if you determine that you are best suited at a particular level, keep trying to be the best you can be in that arena. Set goals for yourself and your company and then achieve the goals.

This growth builds residuals, which should become more important to you than terminal sales; it also builds industry respect and makes and keeps you significant in this industry.

These are the concepts that I have used to build EXS over the years. These, along with valuable partners and a team of dedicated, hard-working employees, have made it possible to be where we are today, growing to the next level.

Garry O'Neil is President/CEO for Electronic Exchange Systems (EXS), a national provider of merchant processing solutions. Founded in 1991, EXS offers ISO partner programs, innovative pricing, a complete product line, monthly phone/Web training, quarterly seminars and, most of all, credibility. For more information, please visit www.exsprocessing.com or e-mail Garry at garry.oneil@exsprocessing.com