One question I get from a lot of agents in the credit card processing industry is, “How can I sell merchant services on a part time basis?” When I...
Hiring Sub-Agents to Sell Merchant Services Locally
When I started my processing career, I started with a captive processor who had a lackluster compensation plan and not much else. In this article I would like to discuss the sub-agent program and how you can use it to grow your business. First, let me define a sub-agent. A sub-agent is a sales agent […]
When I started my processing career, I started with a captive processor who had a lackluster compensation plan and not much else. In this article I would like to discuss the sub-agent program and how you can use it to grow your business.
First, let me define a sub-agent. A sub-agent is a sales agent who sells on your behalf as part of your organization. You set this person’s compensation which is usually less than the main agent because of training or other resources provided by the main agent. For the purpose of this article I am assuming that sub-agents you bring on would be local people. And I do recommend that anyone you recruit locally be brought on as a sub-agent. Otherwise, you are creating your own competition (not a good idea) by telling your sales friends about this opportunity and encouraging them to sign up as independent agents. Before you bring on a sub-agent, let me make a some recommendations about where you and your business should be. Make this a list of goals that you want to achieve before you will allow yourself to recruit agents in your local area. If you have already achieved these goals, email me and let’s schedule a phone call to talk about building your business with sub-agents.
1. You cannot manage others until you learn to manage yourself. There is really one simple question to answer here: do you have a schedule and do you keep it? If not, you are not ready to bring on sub-agents. Work toward getting a good system which works and which you respect just like a boss. When you don’t have a boss, your schedule must be your boss.
2. You must be tracking your numbers. What is your closing percentage over the last week or month? How many new businesses did you walk into this week? You should know the answers to these and many other questions because they are being tracked. Do not try to manage other sales people until you know what your numbers are and have a good system to track them. If you don’t have this yet, get out a spreadsheet and start tracking today. Within a few months, you will have a much better understanding of this business and know how to be a successful sales person and sales trainer.
3. You have a good way to generate leads. As much as you and I might love walking into a business cold turkey, most sub-agents will not do very well with this approach. You need to have a telemarketer lined up to call and generate appointments or have some other way of setting up leads. Side Note ***I’ll tell you one way of generating leads for sub-agents that works great for me. I find that the first meeting and getting the statement is the most difficult for new agents. Therefore, sometimes I will go out for six hours straight just walking into businesses by myself to say, “Hi, my name is James Shepherd, owner of a local processing company. I just happened to be in the area and wanted to find out who you are using for your processing?” Once they answer me, I say, “Really. You know what, I just happened to be out here today. However, tomorrow my area manager, Bob, will be here. Would you be able to have a statement ready for him to look at tomorrow?” This is sort of the opposite approach from most sales managers; they always want the sales rep to do the hardest part. I would rather do the hard part myself for a new agent because I know how to do it. I go in, make a good impression, and then pass it off to a new agent to close the deal. Closing the deal is actually much, much easier than making a good first impression and getting a statement. So if you focus on this part, your team will be very successful!***
4. At least three solid accounts (those happy for three or four months) in each ten minute by ten minute area where you want the sub-agent to start working. To have some references with which to start is important for the sub-agent. If you want the agent to focus on a thirty minute by thirty minute area, go get nine accounts in that area. They should be spaced evenly throughout. Get them active and processing for three or four months and make sure they are the happiest customers you have. Then send a sub-agent to that area.
5. Know what you are doing. I don’t know how to say this exactly, but if you still feel like this industry is a foreign language, you are not ready. Keep reading my blog and watching my videos for a few months and ask me questions as they come up. You will eventually get to a point where you feel comfortable, if not confident, talking to merchants about their processing. You need to have this before you offer yourself as the support person for a sub-agent. So, are you ready to bring on a sub-agent or two? If so, continue reading. If not, work on these five areas and file this article away for future use.
I. Compensation: Here is my recommendation for new sub-agent compensation:
- $100 in up front money per sale, as long as the sale meets the approval / activation bonus guidelines. This is the same for any size business and allows you to make $100 to $900 up front on each account the sub-agent sells. If you want to make a side bonus for larger accounts based on first thirty days processing, there is nothing wrong with that. I just think it complicates the plan and doesn’t add much motivation for the sales to do anything other than pick high volume clients rather than pounding the pavement like they should.
- Pay sub-agents on activation, even if you get paid on approval. Encouraging them to get the install done and to only get solid sales which are going to start processing is important.
- Pay Residual of 25% the first year, 30% the second year and 40% the third year on. Remember, these residuals would still be life vested as long as they achieve a certain level set by you. So you might say, “Once you hit $500 or $1,000 per month in residual, you get your residual for life as long as it doesn’t drop below that number, even if you are not with our company anymore.” This is a huge selling point!
- Offer two starter bonuses. One when you get thirty sales activated in ninety days. Another one from you to help them get off to a fast start. Give them a $500 bonus after they get their first five sales. Although this means you probably will not make much on the first five, it is a short term motivation to keep them going and get them some cash flow quickly. If you can get someone past five sales and keep them happy in the process, you may have just found a gold mine!
II. What should you offer?
1. Make sure they know that they are an independent 100% commission sales person right up front. Don’t beat around the bush with this part. There are certain sales people who only want to sell 100% commission; those are the agents you want on your team. They will love the idea of residual. Don’t try to “talk people into doing this.” Treat it like the great opportunity that it is and don’t sugar coat; good sales people hate that. Trust me, the last thing you want is someone on your team who you convinced to join up. This person will cling to you at the beginning and hate you at the end.
2. Training, training, training!!!!! You should offer training (in case you didn’t catch that!) Feel free to print any of my blogs and use them with your sub-agent. (Not the ones with compensation info…careful on this!) Have a daily meeting where you discuss a sales book, one of my blog articles, or talk about a new pitch you want to try. Meet at a local McDonalds, but get them trained and out in the field. Also, take them with you while you are selling. Trust me, you will hate this, but it must be done. Tell them to keep their mouth shut and their ears open. Tell them they can go with you and watch you for two days, then you will go with them for one day. Then you will do training in meetings each morning. ***BTW: When you go with them, let them fail. Critique afterwards rather than swooping in to save the sale. The sale isn’t as important as the sales rep’s knowledge, so let them falter and make mistakes. Warn them ahead of time that you are going to do this. I tell them, “Don’t even look at me when you are talking to the merchant. I am just there to watch and give you tips afterwards.” Their first five or six solo runs are going to be a disaster either way. At least if you are there, you can make them keep going and help build their confidence. After ten or fifteen stops, you will not believe the difference in their pitch. Watching this process is a lot of fun, too! :)***
3. Offer them some type of leads. Even just a list of businesses that you have gone through and think would be good ones to hit along with some references to use would be helpful. They must have a reason to get out in the field. You need to offer accountability more than anything else. Have them open up a google shared spreadsheet and track their results each day. Then discuss these results each morning along with your results. Don’t be afraid to talk about your results with them; tell them the real deal. How do you really succeed in this business?
4. Offer them freedom of schedule. These people are 100% commission, so don’t expect them to work nine to five Monday through Friday. Ask them to do two things only:
First, to be at a scheduled meeting each day with you.
Second, to turn in a schedule each Friday of their work schedule the next week. And expect them to keep it. If they can only work twenty hours the next week, that is fine. I just expect them to schedule which twenty they will work and work all twenty hours. If I call them during that time to get business done, I expect them to be working. You will most likely need this schedule to give your telemarketer anyway.
III. What not to do:
Don’t ruin your schedule and sales pipeline in the process. If I recruit ten new agents, five of them are never going to make one sale, not even one!!!! Three of them will sell for less than a month, and two of them will actually work out. Of those two, one will probably end up doing it part time with five to ten sales per month, and the other one will get fifteen to twenty. (This is for independent agents. Your sub-agent numbers should be a little better, but not much.) Now if I go out and sell for three hours per day, I can get one sale per day or twenty per month minimum. I get all the money from those sales. So how stupid would it be for me to recruit a bunch of people and let them mess up my personal sales schedule? If they can add money to my pocket, that is great. But I’m not going to let them take $2,000 out of my pocket so they can put $200 back in! Have certain times where you are out selling. During these times the sub-agents can do whatever it is they are doing, as long as it doesn’t include bothering you. You keep selling!!!! Tell the sub-agents that the main thing you offer is the opportunity to watch a real sales professional in action. If they want to learn from you, they will have to work around your schedule. I like to meet in the morning. This gets my day started off right and doesn’t take any of my time. Although it will be a pain if a sales agent wants to tag along, it will not mess up my personal sales. I will probably have to stay out longer than I was planning. The only time I really invest is the four or five hours I spend tagging along with a new sub-agent on the first few solo visits. Other than that, I answer a lot of phone calls in between sales visits and that is all.
Three more tips in closing: don’t bring on partners; don’t bring on partners; and whatever you do, don’t bring on partners!!!!!!!!!! Get the idea? Just because someone can sell, doesn’t mean he or she can run a business, be honest, or not drive you nuts. There are two types of people with whom you should work as your business grows: (1) independent contractors as you get started and (2) employees as you get larger. This is just my opinion from my own experience. I have watched friends of mine fall on their faces time and time again as they add partners and forget who is running the show. All kidding aside, bringing on sub-agents as independent contractors can be very lucrative with minimal time and money invested. If you are good at what you do, help someone else do it and make some money in the process.
Email me with questions: firstname.lastname@example.org
Read the previous article: Organizing Your Sales Leads into a Schedule
Read the next article: Are You Accountable