Payments is a competitive space. Between different processors, major platforms and resellers like independent sales organizations (ISOs) and payment facilitators (PayFacs), merchants have a lot of options. That makes cutting through the noise a difficult, but necessary, part of running a merchant services business. So, the question is: how?
In this article, let’s look at four practices you can follow when approaching merchants to help you stand out from the crowd, including:
- Tapping into existing relationships and familiarity
- Solving obvious problems with a merchant’s existing services
- Offering clear and definable value propositions and financial incentives
- Putting the prospect’s interests above all else
By the end, you’ll walk away with practical examples that you can start using right away in your merchant conversations.
1. Tap Your Network Level-by-Level
Entrepreneurship is on the rise. According to Global Entrepreneurship Monitor, 19% of American adults between 18 and 64 are either in the process of starting a business or they own and run one that is less than 3.5 years old. That’s the highest rate of U.S. entrepreneurial activity in GEM’s 26 years of tracking.
Why does that matter? It means, on average, one-in-five of the working-age adults you know are in the early stages of some kind of business venture. And every business needs payments. That makes your existing network one of your best sources for prospects, made all the more powerful by the fact that those business owners already know, like and trust you.
Don’t Be Afraid to Solve Problems for People You Know
Some agents are hesitant to reach out within their personal network because they think it’ll reflect badly on them or cause discomfort. But remember that every business owner is already being approached by reps who have no connection to them. Hearing from you isn’t a burden; it’s the chance to talk to someone they know has their best interests in mind.
What might that look like?
It’s as simple as saying, “How’s business going? I’m working with a payment processing company, and I think they might be able to help you lower your processing fees. Do you want me to put you in touch?”
We’re not talking about a hard sell, here. It’s the easiest, softest approach you’ll ever get to take. Even better, it puts you in a position to not only launch a potential deal but also to offer real help and savings to people you know.
It’s also a great way to unlock follow-on opportunities. Business owners know other business owners. So, just like those 2nd and 3rd level connections on LinkedIn, your network’s networks can be a big source of opportunity. And asking is the best way to get those word-of-mouth referrals.
If you’re not already looking for opportunities within your network, it’s time to start. As long as the payment solutions you’re offering come with real benefits, it’s a huge win-win.
2. Begin With What is Within Reach
Whether you’re reaching out within your network, working a vetted lead or approaching a business cold, the key to getting things started is finding a compelling problem you can solve — an anchor — and putting it at the center of your early discussions.
Throughout your sales process, you may find a whole list of high-value solutions you can offer, but at the start, look for opportunities that are easy to understand and will catch a merchant’s attention.
Easy Approach Anchor: Cash Surcharging
Here’s an easy example you’ve probably seen a thousand times but may have never given a second thought: surcharging.
How many times have you walked into a convenience store, gas station or any number of small retailers and seen a little sign at the checkout saying credit card payments carry a surcharge, either as a flat fee or a percentage of the sale? That little sign is a big opportunity.
Surcharging has become extremely common now that contactless card payments are the norm. Merchants don’t want to get dinged two to three percent, so they pass on the charge. But customers hate it — enough to drive almost half out the door.
In contrast, cash discounting, which is the opposite of surcharging, offers shoppers a lower price for paying cash. Instead of tacking on an extra fee at the counter, the merchant is offering customers a discount on the price they saw on the shelf. That’s an extremely powerful reframing.
According to the Fed, less than 4% of cash transactions are discounted. That means, even though a better alternative to surcharging is available, merchants aren’t using it. Why? Because many payment providers can’t or won’t support it.
As an NMI partner, you can. That means every cash surcharge sign you see is an opportunity to start a conversation. And, even if it doesn’t lead to a sale, at the very least, you’ll be educating a merchant on a feature they might not know about and making a positive impression.
3. Make the Value You’re Offering Impossible to Ignore
Payments are a mission-critical part of every business. They’re necessary, whether merchants want to deal with them or not. However, because most don’t want to think about payments, many merchants end up overpaying for their payment services. Once the system is up and running, the default mindset is that “good enough” is good enough.
As a solutions provider, to tackle that mindset, you have to go in with a value proposition that’s clear, easy to understand and immediate.
Unless the merchant is actively seeking a new provider, any potential change in service is asking them to reengage with processing. Since that process is not enjoyable for them and takes time away from their core business, it can be difficult to get that ball rolling.
Think of it as merchant inertia. Merchants at rest tend to stay at rest, unless you apply a strong enough motivating force. If you engage with a merchant, your value proposition —the motivating force — should be crystal clear. Otherwise, merchants will say “thanks, but no thanks.”
Lean on No-Obligation Comparisons To Make Value Easy to Understand
Some of the most powerful tools you have at your disposal are statement comparisons. Don’t just tell the merchant that you can save them money; show them the value behind what you do! This is important because, while it’s easy to say “I’ll save you money,” that might not always be possible. In these cases, you’ll need to match the rate and position value instead. Thankfully, no-obligation comparisons can help in finding other “problem areas” that you might not have thought about, which can uncover pain points that you can help with.
For the merchant, the prospect of changing providers can feel high-friction or even scary. But sending a few months’ worth of statements is an easy ask. With a partner like NMI, it takes a couple of minutes and costs nothing. Then, with the data in hand, you can complete a side-by-side comparison that will very quickly clarify the potential benefits switching will have for both the merchant and you.
If you’ve run these comparisons before, you’re probably already familiar with how common it is for merchants to pay huge fees without even realizing it. Putting that number on paper and saying, “Here is exactly how much I could save you,” may be the single most effective way to overcome merchant inertia and make it clear that the effort of switching providers is very worthwhile.
4. Remember You’re Solving Problems, Not Just Selling Services
Whether you’re helping people in your personal network, looking for opportunities to drive improvement or helping a merchant see potential savings and value, if there’s one thing to take away from this, it’s that the sale itself is secondary to the solution.
The payment services you offer need to save merchants time, money and headaches. They need to make a merchant’s business more streamlined and profitable. If they don’t, then that merchant is probably not a great audience for your message. And that’s ok. Not all merchants are. But if you always start with the merchant’s interests in mind and keep the benefits you offer their business at the core of everything you do, merchants will be easier to approach and closed deals will follow naturally.