ere's a scary thought for Halloween: POS acquiring is a mature market. This nightmare haunts many business managers dealing in a crowded, highly penetrated marketplace.

Let's put those fears to rest by examining some of the market realities that make the POS terminal business a thriving industry despite high levels of saturation. The key to success in a mature market is the ability to deliver differentiated solutions at varied levels of functionality and cost.

In growing market segments, the living is easy. More buyers understand the benefits of the given technology; competitors jump on the bandwagon with products that offer similar functionality, which initially spurs more demand; buyers are more than willing to pay premium prices, so everyone in the supply and distribution chain makes a ton of money; and market leaders emerge and alliances take shape to bundle products with services.

Then, things really start to get interesting. The market starts to mature; heady growth rates slow; price cutting impacts profit margins; cheap knockoffs with no differentiation start to bottom feed on laggard adopters; some producers get chased from the market; and some survivors acquire failing companies and "kluge" together disparate product lines in order to buy market share.

On the producer side, product differentiation becomes key in a maturing market. On the selling and distribution side, education and savvy become premium factors in making the sale.

Rather than offering a lineup of different "boxes," we should instead partner to sell merchants one "product" with different entry points and solution sets.

In some ways, the POS industry is not really that mature. The market has often relied on technology differentiation rather than solution differentiation.

The history of the personal computer (PC) market can teach us some lessons. In the POS business, we've operated in the Intel 386 vs. Intel 486 mode for too long; the industry has sold old architecture products at a low price and new architecture products at a high price.

In the PC business, until relatively recently, it was a pure technology play. Sellers sold low-end buyers older architecture such as Intel 386-based systems, while higher-end customers purchased higher-end products based on the Intel 486.

As the PC industry matured, producers changed the manner in which they differentiated their products. For several years now, consumers have acquired relatively low-priced systems using the same core processor as higher-priced business systems.

The differentiation comes in configuring the devices for different needs, such as basic Web-surfing and CD/DVD usage on the low end, or high-quality multimedia or graphics-intense design on the high end.

In the POS industry, it's time to start focusing on solution selling rather than technology selling. That's one reason why VeriFone introduced the Omni 3730 and Omni 3730LE models earlier this year.

Our goal is to provide you, ISOs and merchant level salespeople (MLSs), with an entry-level solution that will put value-conscious customers into one cohesive product family that also serves higher-end customers.

Technology is a given. Multi-application technology is now firmly established, but what you need are programs that bring them together with value-added service providers and processors to tailor effective solutions for different tiers of customers in the marketplace.

We believe it's most effective to arm you with varied pricing options that use the same interface and run the same basic applications.

Essentially, this enables you to sell one product, but a variety of solutions. It also provides a path for "up selling" new low-end customers to a high-end solution in the future.

Segmentation is a basic strategy in fostering growth in a highly penetrated market. It becomes an issue of discovering customers' core needs.

Are customers primarily focused on reducing costs, increasing profits, creating new revenue opportunities, improving customer service or making employees more productive?

The key in meeting those needs is to provide a tailored solution and not just a box. Do customers need a simple solution with basic debit and credit card processing, or one that they can use for generating additional revenue such as phone card top up?

Do they need a system that they can upgrade next year when their business expands or when rising profitability makes it possible to stretch out in new directions?

Your core strategy should be to learn and deliver baseline functionality across multiple products. Everyone needs a certain core level of functionality.

But from there, you must figure out which customers might be appropriate for EBT acceptance, for instance, or which merchant locations are ideal for phone card activation and top up. Or, perhaps, a growing grocer is in need of a time accounting system.

You should avoid going into sales calls and offering a choice between old and new product families that leaves prospects' heads spinning and unable to make decisions.

Sizing up and selling these customers on varied solutions is a lot simpler and more effective if you present one core platform with varied tiers. By doing this, you immediately reduce the complexity of the sale and eliminate the customer's quandary of choosing between a less expensive, older device that is a technical dead end, or a more expensive device with more functionality and an adaptable platform.

Serving customers with tailored solutions will turn them into repeat customers. It will also generate increased referral business as they describe your expertise and savvy when talking with their peers.

Relying on a unified product family will not only make you more successful, it will also simplify your life. A unified product line shortens your learning curve and makes it easier to become an expert. And expertise makes you more valuable to the customer.

No matter what level of service your merchants require, your future success relies on saving them money now and providing them with fast, secure and reliable payment processing well into the future.

Doug Edwards is National Sales Manager for VeriFone's Indirect Channels. Contact him at doug_edwards@verifone.com .