New Customers are an Adrenaline Rush.
But for an MLS, the Real Brass Ring is Retention.

It's Not as Sexy, But It's Better for Your Wallet . . .
and Your Reputation

By: Biff Matthews, President, Cardware International

Retaining a merchant account, despite the inevitable onslaught of competitor lures,
is well worth the effort required.  As with insurance agents and other specialized sales
professionals, the financial reward is residual income.  To build that base, in my view,
you need a methodical two-pronged strategy.  The first kicks in at the time of sale;
the second every week thereafter.   

It’s deceptively simple, but a major part of the “time-of-sale” strategy is lists:
intelligent lists of questions regarding equipment and software.  They must be
customized to reflect, first, what the merchant runs now, and what equipment
supports those applications. 

There are also questions regarding implementation: power source and phone lines,
dial-up, DSL, Wi-fi.  The trip-us is: merchants are not always the most knowledgeable
about operational details.  They may make the decisions, but operational details might
not be front and center.  A merchant may forget, as one easy example, that he has
check guarantee, or age verification, or purchasing card applications, all of which
must be addressed if boarding is to be successful and trouble-free. 

The goal, as with many things in life, is getting expectations and reality to merge. 
And that’s a challenge tailor-made for good lists. 

The list needs to include all contact information for decision-making, and the fall-back
people for different functions (telephony, IT, training, etc.) on various shifts when the
owner will likely be unavailable. 

Prong #2, the post-sale check list, focuses on issues related to the contract, and pricing.  
Does the merchant fully understand what he’s buying, paying for, and getting? 

There’s a saying that there are always three versions for every conversation:  what I said,
what you hear, and what was actually uttered.  Merchant understandings are like that.   

Also like everyone else, they, as a group, do not thoroughly read their contracts.  
As a sales professional, the MLS should attempt to uncover what could become
post-sale objections, and understand that clarifications are not deal-breakers.  
The fear of bearing bad news is common - but unfounded in terms of its consequence,
when addressed on the front end.   

The end-game is to build a relationship that produces referrals. If the customer
believes you’re focusing on the immediate sale, rather than trying to prevent and
solve future problems, you’ll never get beyond the original contract term.

Fast-forward a few days:  Even if there were no discernible gray areas, it’s time for
a phone call to review the salient points of the contract.  Ask questions regarding
the agreement, and its pricing – test for understanding.  You’re not looking for trouble,
just trying to anticipate and short-circuit potential difficulties. 

When a company I know receives an application from an MLS, their next step is a
carefully constructed “quality check” phone call to insure that the words on the
contract, and the merchant’s understanding, are the same.  They don’t go forward
unless this is demonstrated.

If the phone call uncovers discrepancies, the company will re-negotiate a portion
of the contract, or return it to the MLS for revision.  These calls, not the sales calls,
are regarded as the true “closers” of the sale. 

Absent this type of process, the MLS would do well to make a “quality check” call
of his or her own.  Because then, we can move on to install and implementation –
what I consider the intermediary steps to long-term retention. 

In this stage, things to determine include dates that are important to that specific
business.  Seasonal sales create the need for additional POS terminals, and planning
for this is just good customer service.  Build these dates into a CRM database for each
customer, so two weeks before a planned sale event, you can suggest an additional
POS terminal and supplies to accommodate the added activity.   Also be proactive with
your processor, who could become security-conscious if there’s a large spike in activity.

It’s also helpful to determine relevant anniversary dates for the business.  Sending a
card or email to congratulate the merchant on his 5-year anniversary in business is a
gesture that demonstrates you’re paying attention.

Other events we pay attention to are weather and local news that impacts clients.
Merchants in the southeast, for example, are exposed to hurricane destruction
potential  several months every year, and it’s important that you’re prepared for
waterlogged swap-outs and fast supply replenishment.  Plan and anticipate, so you
can manage the aftermath of a natural disaster, rather than the other way around.  

Local news that impacts merchants is also important.  Something as seemingly
innocuous as a street improvement means landlines are likely to go up and down
for weeks or longer.  (Is now the time to consider wireless?)  Merchants might also
want to consider working with other retailers to establish a Wi-fi hot spot.  One-time
events such as a fire nearby means there may be smoke and fire damage to deal with. 
Will your merchant be up or down, and if the latter, for how long?  The bottom line is: 
have plans and contingencies for various scenarios, and you will be rewarded with the
loyalty – the retention – you seek, while avoiding panic scenarios.

But speaking of panic scenarios, do you as an MLS, have your own contingency plan? 
Are you prepared for a weather event that affects your office?  You heavily influence your
recovery or demise based on how you answer this.  If you have a disaster plan, that’s
great.  But you’re not fully off the hook here.  When was the last time you tested it?   

Call your vendor, tell them there’s been a disaster, and when can they deliver
25 terminals?  3 weeks, they say?  Well, the contracts say one week.  Now what -
and what are the consequences going to be?  Are they going to arrange temporary
re-location and reimbursement for the difference in expense?  

Next, determine how to get replacement software.  Then, tackle the biggest
elephant in the room:  Does your processor really have redundant records,
and in fully accessible format?  Hmmm. 

Part of this process is classifying your customers:  A,B,C,D.  If you’re like most of us,
the 80-20 rule applies.  And you need to craft your contingency plan so that you
first take care of those that deliver 80% of your business.

Of course, there’s much more to customer relationships than planning for calamities. 
Software and security updates that impact merchants should be part of your ongoing
conversation.  But equally important are technology developments they’ll hear about
from peers, the news media, etc.   

Restaurants, for example, are moving to no-receipt transactions.  Kiosks in many
food establishments now allow ordering before customers are seated - and sometimes
these kiosks have a payment capability.  Whatever is happening in the merchant’s
industry and community is important to you, too.  To keep up, without spending all
of your time doing it, consider a day at a trade show.  Those held by the National
Restaurant Assn.,  National Retail Assn. and Petroleum Marketers Assn. offer
excellent opportunities to learn about emerging technologies quickly.  
So you can be in front of the curve for your customers.

And what about those “receipt less” transactions?  Well, with developments such
as this, you want to bring the idea to your merchants, rather than the other way
around.  If trade shows aren’t the best solution for you,  take advantage of seminars,
Webinars and other tools offered by equipment manufacturers, processors and software
providers.   Get outside your comfort zone and understand what your customers are facing.
What you learn will not effect all of them, but your commitment to service will be rewarded
tenfold.   (see first paragraph.)

One final idea on lists:  schedule some “permission marketing,” where merchants agree
to receive a regular communication from you.  You don’t want to bury them in “stuff,”
but communication that is substantive and relevant is worth doing.   Send to “A”
customers monthly, B customers every other month.  There is no doubt that email is
losing its effectiveness for those who are not expecting to receive it – small wonder,
since, by recent estimate, 92% of all email is now spam.  By garnering permission first,
you assure your message is welcome, rather than ignored, or, worse, counter-productive.

Biff Matthews is President of Thirteen Inc, the parent company of
CardWare International.  He is one of 12 founding members of the ETA,
serving on its board, advisory board and committees.  (740) 522-2150.

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