hy buy the cow when you can get the milk for free? So the saying goes, and in our industry, in which processors offer merchants one discount after another, it's an important message to remember.

Since the introduction of "free terminal programs," free POS equipment and services and lower and lower discount rates have become increasingly common.

In the race to win business by underselling the competition, short-term profit has eclipsed long-term growth. Merchant loyalty is a lower-than-ever priority for many processors, ISOs and agents.

Many salespeople who have worked in this industry for years are beginning to wonder if it's still possible to make a steady, substantial income by retaining merchants instead of chasing new ones with promotional gimmicks and unrealistically low rates. There's good news: It is.

To become truly successful as ISOs and merchant level salespeople you have to do more than give away things for free, collect equipment bonuses and move on.

To succeed in the long run, you need to get merchants to "buy the cow," i.e., develop loyalty to your processor and not simply benefit from the gimmick-of-the-week approach by switching companies every time a new salesperson walks in the door.

Of course, promotions are still an extremely effective way to win new business if handled properly with long-term goals in mind. Following are a few techniques to employ to make sure that your promotions deliver long-term value long after they have ended:

Step 1: Show Merchants How You Add Value

To many merchants, a processor is a processor is a processor. As salespeople you know that many business owners care only about the bottom line and consider the various processor options to be largely interchangeable.

To develop loyalty in merchants once a promotion has expired, demonstrate all the ways your business stands out from the competition.

Make sure that new merchants get the most out of your service. Provide them with information about all the value-added programs your company offers, from gift cards to online account management and merchant referral programs, and follow up to ensure that they're using all options available to them.

Chances are that your processor is unique in a few ways. Your job is to show merchants why they'd be foolish to switch their business to another company that can't offer anything more than a tenth of a percent off the discount rate.

Step 2: Make Sure New Merchants Are Treated Well

All processors strive to deliver the highest level of service possible to every merchant. But if new merchants experience a major problem soon after sign-up, their impression of your company might be instantly and permanently destroyed.

Serve every merchant as well as possible, but encourage staff to exhibit particular patience, restraint and follow-through skills with new ones.

Step 3: Make Sure Promotions Are Good for Agents

The greatest promotion in the world will be a disaster if there's no compelling reason to sell it to merchants. The simplest way to create an incentive for feet-on-the-street reps is to offer cash. Pay in full, pay on time and pay often.

If allowing new merchants to process without fees for two billing cycles, for example, some sales reps may express concern that their profits will be lower. This is simply not true when reps are paid residuals as though their merchants were paying full price for processing.

Reps still collect checks for every fee the merchant would normally be paying. The only difference is that the merchant will pay less. The result: helping reps boost their merchant portfolios during the slowest months of the year.

Step 4: Show the Big Picture, but Don't Forget the Fine Print

Many ads in our industry offer benefits that seem too good to be true. Without providing supporting information and details, an offer such as free processing will be met with serious skepticism by ISOs, agents and merchants. Explain exactly how the program will work, where the money will come from, and the reasoning behind it. It's also helpful to provide easy-to-understand sales materials that can be distributed to merchants. If you let merchants and reps see the big picture, including the fine print, they will be much more enthusiastic about your promotion.

Step 5: Your Secret Weapon: Merchants Are Lazy

How many times have you been waved away by a harried merchant who says something like, "I might be interested in processing, but right now I have a business to run"? The vast majority of merchants would like to find a processor that works well for them.

They would also like to sign a contract with an agreeable rate and spend the rest of their time focusing on other elements of their business. Don't give merchants a good reason to take a meeting with the next rep who cold-calls them. Keep them happy, play fair and keep your dealings above-board. Merchants who don't trust you will move on to a new processor tomorrow.

Keep merchants processing comfortably and profitably, and they won't make the effort to switch their account to a competitor. You'll keep cashing the residual checks for years to come, while the competition struggles to keep a healthy, loyal merchant portfolio after their latest sales gimmick has expired.

Nancy Drexler is the Marketing Director and Sam Neuman is the Communications Specialist of Cynergy Data, a merchant acquirer that distinguishes itself by relying on creativity and technology to maximize service. Cynergy offers its ISOs: VIMAS, a cutting edge back-office management software; Vimas Tracking, a ticketing system that makes responses to customers fast, accurate and efficient; Brand Central Station, a Web site of free marketing tools; plus state-of-the-art training, products, services and value-added programs, all designed to take its ISO partners from where they are to where they want to be. For more information on Cynergy e-mail Nancy Drexler at nancyd@cynergydata.com .