Many times as I speak to merchant services sales reps, they seem a little lost about who they should be selling to. Should they go after large...
Which Retail Merchants Should You Target – Five Types of Merchants – Part 2 #TargetMarket
In yesterday’s post, we discussed restaurant types you should target, along with some tactical ideas about how to sell to them. In today’s post I want to cover the other most common type of merchant you should target: retail. Here are the three types of retail businesses you should target and how to approach them. #1 […]
In yesterday’s post, we discussed restaurant types you should target, along with some tactical ideas about how to sell to them. In today’s post I want to cover the other most common type of merchant you should target: retail. Here are the three types of retail businesses you should target and how to approach them.
#1 – Convenience / Small Ticket Retailers. These retailers sell on convenience. They may sell many different things. The way they make their money is by having a lot of customers who come in spending a small amount of money each time.
There are only two real challenges in making the sale. First of all, they are very busy, so talking with the owner can be a challenge. My recommendation for these business types is for you stop by and make a purchase (a pack of gum, etc.) Then simply hand them your business card while telling what you do, but don’t push forward with the pitch. Come back a couple days later to purchase something else and say:
“Well, since you guys are in a great spot for me while I am checking on my clients, I am probably going to be in here often now. I have a question for you. Do you know the name of the point of sale software you are using?”
This is the other challenge in selling the retail businesses. They usually have a POS system. Go back to yesterday’s post to learn more about this pitch. You can now come back a third time with the “good news” that one of your processors does integrate with this system. By breaking this up into several stops, you will be much more likely to gain trust and close the deal.
#2 – High ticket, Clothing, Wine, Jewelry, etc. These merchants are probably the easiest to sell. However, they generally ironically produce the least profits. Many of these business types will have one employee (the owner) and might process $8,000 to $20,000 per month in volume. Jewelry stores usually process more than this, but the average ticket is so high that you still don’t make much money on the transaction fee. And they typically have pretty good pricing already. That being said, you should absolutely walk into these establishments because you are almost guaranteed a contact.
I have found the best pitch for these goes as follows: “I am a local business owner. Basically, what I do is similar to an insurance broker but for payment processing. I am connected with most of the big processing companies. So I shop around and bring you back two or three quotes to review. (I can help you with this if you don’t how this is possible. email@example.com) These business owners like the idea of shopping rates.
One other tip: make sure you work with your processor to get the merchant approved for the correct “high ticket” size when you submit the application. The last thing you want is this merchant having transactions held by your processor due to risk.
#3 – Specialty Retail. I have a ton of specialty retail merchants in my portfolio. These merchants can be easily identified by their passion about their products. This could be a small custom furniture shop, a hobby store, or any retail store that is simply built around the owner’s personal passion. Again, these will probably not be your most profitable deals. But they can become the back bone of your portfolio, creating a stable income stream.
I have only one tip on how to sell these merchants, and it isn’t fancy or complicated. They need to trust you and like you. The way you accomplish this is to learn about their passion and then share yours. If you don’t really like selling payment processing or meeting business owners, stay away from these shops. These owners will be able to tell in ten seconds if you are not for real. When you walk in, you need to be overwhelmed with the amazing passion of this business owner and impressed with the way the owner has turned his or her passion into an income generator. Keep in mind, for these owners it isn’t all about the money. They are passionate and want to work with other local, passionate people. If you learn about their business and then tell them why you are so passionate about your business, the odds are you will make a sale and a new friend.
I hope these tips will help you in the field!
Read previous post: 5 Types of Merchants You Should Target – Part 1 #TargetMarket
Read next post: Five Sales Lessons from Bernie Sanders for President