hile ancillary means auxiliary, helping or subordinate, ancillary services are essential to most traditional service businesses. Ancillary services are also called add-on services.

An experienced ISO sales manager knows that no matter how good his own company's program is, if existing merchant customers, or potential clients, are not courted with the convenience of full-service, one-stop shopping, it's an almost certain bet the customer's overall satisfaction will fall short of expectations.

When merchant level salespeople (MLSs) share experiences, reasons they give for a "bad" sales month often sound a lot like this:

• The accounts I called on wanted a deep discounted price because we had nothing unique.
• The merchant account store manager decided she's had it with salespeople peddling the same old stuff with the same old storyline.

Sound familiar? Sellers take note: When packaged with your base product and service offerings, value-added, business-building services are the key differentiator upon which a quality merchant account program can be built.

There are many ancillary services to choose from. They range from cash advance programs, to gift and loyalty card programs, to debt collection programs to e-commerce solutions, just to name a few.

The dough re mi

A brief look at the typical needs of a small retail account makes clear the importance of ancillary services. Let's start with a simple premise. What does any small business need more than management, more than organization and more than operational procedures? Capital.

Why? It needs capital to fuel inventory, fund marketing, offer e-commerce solutions and provide customer service. Without capital, any small business is doomed. So why not include cash-advance services in your product offering?

For example, at Cynergy Data we offer several ancillary services, including cash advance programs. Through our affiliate, Merchant Cash & Capital, we offer alternative financing to small retail businesses. Cash advances can help merchants open new locations, build inventory, create unique in-store merchandising or simply advertise their product offerings.

Such funding solutions enable ISOs to grab the attention of targeted merchant accounts they would otherwise be unable to attain by offering a standalone primary product or base merchant processing. This is just one example of an add-on service that would help increase merchant account interest and thus incremental sales for your ISO.

In our industry, the competition between feet-on-the-street MLSs is fierce. Profit margins for processing are increasingly under pressure, and equipment sales are getting ever more difficult to make, given the proliferation of free-terminal programs.

More and more agents are figuring out that selling ancillary services is a win-win strategy for beating competition and growing profit margins.

Add-on services build income for merchants and income for MLSs. Plus, sales agents who add incremental revenues to their sales portfolios will most likely stick with your ISO longer. And, as you know, keeping good, productive sales agents is less expensive than recruiting new, unproven ones.

The add-on amplitude

Take the case of a restaurant merchant account manager who was responsible for growing sales. He creatively devised plans for selling newspapers with take-out coffee. Additionally, he rented headsets to patrons so they could watch movies while they ate - just like the airlines.

He even provided a kids' playroom for his patrons' toddlers, so parents could enjoy a quiet restaurant meal without needing to find and pay a babysitter.

Wild ideas? Perhaps. But ideas that were nonetheless complementary to the restaurant's core product offering - ideas that drove incremental sales.

Teamwork is everything. The merchant employees must work together to create a successful program. ISOs must help train and direct them on how best to do this.

This brings us back to a fundamental question. How much time, money and sweat should an ISO spend packaging and pushing ancillary services?

It depends on how effective those ancillary services are at differentiating your ISO. Is it not worth the time and effort if your MLSs are struggling with closing each merchant account sale?

Think about this: Do you want your ISO to compete for the traditional merchant processing business, or do you want your ISO to compete as the full-service, one-stop-shopping solution for growing merchant customer sales?

Remember, to merchants, the former makes your ISO relevant for the day; the latter makes your ISO relevant for life.

Mike Grossman is the Executive Vice President of Sales for Cynergy Data, a merchant acquirer that distinguishes itself by relying on creativity and technology to maximize service. Cynergy offers its ISOs: Vimas, 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 Mike Grossman at mikeg@cynergydata.net