Merchant Services is by far one of the best and most dynamic industries to be involved in, and we are fortunate to be in an industry that offers residual income. As ISOs, we work hard in order for our residuals to increase month over month, however, in order to maximize your residual growth, you must learn to manage its enemy, attrition!
Attrition is a nasty word in our industry, because it’s synonymous with loss of income, in fact the average annual account attrition is approximately 21%, however, it doesn’t have to be so. The first step in minimizing attrition is to make sure that your sales process is one that supports a lower attrition model. Here are a few simple tips to minimize attrition immediately and protect your hard earned residuals.
- Race to Zero! Are you or your sales agents neglecting customer care and hoping your prices are enough to keep your customers? If so, you are most likely to have a higher attrition rate, because it won’t be long before a competitor comes along to offer your merchants additional savings, and since there is nothing to prevent the merchant from leaving, they will likely switch to your competitor, and they will continue to play this game as the race to zero plays itself out. Additionally, only selling on pricing breeds poor salespeople, with little to no actual selling skills. This will unquestionably have an impact on your bottom line.
Migrate Away from Countertop Solutions! If you are still caught up in offering a free countertop solution, then you should consider migrating towards a more sophisticated POS solution. Why you ask? Because countertop solutions may easily be switched to a competitor with a simple reprograms. Even if you lock the device, your competitor is likely to offer your merchants a free replacement. So countertop terminals do not provide the merchant with enough incentive to stay with you. However, offering your merchants proprietary POS systems will drastically combat this.
A good POS system will enable your merchants to operate their entire business through the POS system, from taking orders and managing inventory to employees clocking in and out, and everything in between. The extent of features offered by such a POS system is often more than enough to persuade a merchant to remain a loyal customer to you. Most merchants value running their business efficiently over a small savings offered by a competitor, and best of all, as a proprietary POS system no other processor may reprogram their system. A good POS portfolio has an average annual attrition rate of only 5%!
Don’t Play Hide and Seek With Your Merchants– Many sales agents fall in love with the idea that since they are in sales that they should not have any role in customer service. That may be OK if you were not in a residual based business, or if you don’t care about having a high attrition rate, but the reality is that we are in a residual business, so you must make some time to be there for your merchants, otherwise you risk losing that recurring revenue. Contrary to popular belief, Merchant services are not a one-time sale, so the merchant must be sold every single month in order to stay with you. I am not advocating that you become a full time customer service representative for your merchants; I’m simply suggesting that you make yourself available and return calls, and ensure that the proper department is handling the merchant’s issue. Most of the times simply returning the merchant’s call in a timely manner could be the difference between retained revenue or loss of revenue. I recommend dedicating a short time in the morning and again in the afternoon to return all customer service calls, so that the rest of the day is available for you to obtain new business.
Be Transparent- Nothing I mentioned above matters if you are not transparent with your customers. I cannot emphasis enough the importance of this step, because if your merchant feels that you have misrepresented, then you can rest assured that you will lose that business. Aside from the fact that it’s a very unethical practice, we are in a recurring revenue industry, so it’s also not beneficial to the long term growth of your business. Being transparent simply means making sure that the merchant understands what rates and terms they are signing up for, and not to make promises that you cannot keep. It sounds like a simple step, but I’ve found this to be challenging for many sales people.
Initiate Contact- Last but not least, feel free to check up on your merchants regularly just to make sure that they are happy with their service. Don’t always wait for the merchant to contact you when there is a problem, and don’t assume that because you haven’t heard from the merchant that everything is running smoothly. Take the initiative and call your merchants monthly, or quarterly just to check up on them. This will demonstrate to the merchant that you are dedicated to service, and that you are simply a phone call away should they need you. You will be amazed at the power of this simple step.
Aaron Nasseh is the founder and Chief Executive Officer at Finical Inc. His extensive sales and management experience includes having previously served as the General Manager of CardPayment Solutions and Vice President of Sales at iPayment Inc