Take a mental picture of a few small business clients with whom you work and ask yourself truthfully, “Will this Small Business Client Exist in 10...
Who should I sell as a new merchant services agent?
Recently I have had the opportunity to work with about twenty brand new agents. This was a fresh reminder to me of the issues a new agent in this industry faces. I have been working with agents now for several years and very little surprises me. But this week I was surprised! I have […]
Recently I have had the opportunity to work with about twenty brand new agents. This was a fresh reminder to me of the issues a new agent in this industry faces. I have been working with agents now for several years and very little surprises me. But this week I was surprised! I have identified the main issue which is keeping these agents from their full income potential, and it isn’t what you are probably thinking. This particular group is working hard, staying busy, and motivated to succeed. They have gone through our training and have a basic understanding of the industry. They seem fairly confident in their abilities and have no problem talking to business owners. So what is holding them back? They are investing time in the wrong clients. Let’s talk about who the right clients are first. Then we will move on to some tips on identifying the wrong clients.
How to Sell Merchant Services in 6 Steps
If I could write an eBook knowing what I know today and then go back in time and deliver it to myself 10 years ago when I first got into this industry, this would be the one! CLICK HERE TO DOWNLOAD
When you are a new agent, your target market is as follows: independently owned, physical location businesses in your own local market with five or less locations which are doing over $2,000 per month in credit card volume through a standard credit card terminal (not a POS System.) These merchants are the easiest to sell, the most likely to buy, the most profitable with which to build your portfolio, and the least likely to cause you headaches during the installation process. If you want to get off to a fast start, you want to target these businesses!!!! Let’s logic a little bit more about this, so you can see why I am giving this advice to new agents.
First of all, understand your limitations and advantages as a new agent. Your key advantage is that every business in your local market is a potential prospect at some point in the life of your business. Since you are new and have never walked into any businesses before, you could probably prospect for thirty hours per week for two or three months staying within fifteen miles of your home office without ever wearing out your welcome. Your limitations are you don’t have references, your knowledge of advanced industry concepts is still lacking, and you need cash flow to build your business.
So let’s think about this advantage and these limitations logically. You have an unlimited number of businesses to visit during your first two months but have limited knowledge of advanced industry concepts (like POS Systems and conversions from PayPal to traditional processing) and need to build cash flow quickly. Therefore, doesn’t it make sense that you would only invest time walking into businesses and meeting business owners who are the easiest to sell, install, and service and are the most profitable for you? Here is a list of specific action steps I would encourage you to adopt during your first two months in this business as a local, independent sales agent:
- When you walk into a business for the first time and see a POS System instead of a standard terminal, turn around and walk out. Make a list of these businesses. Once you have thirty accounts under your belt, email me. I will give you some great resources to work with and switch over POS Systems. Then you can go back to these businesses. But at the beginning, most of these prospects will want references you don’t have (because they are bigger and more established.) They will take valuable prospecting time away from easier sales during the long protracted installation process. And they will provide you with complex and confusing processing statements and reports that you will be expected to understand.
- Don’t sell your out-of-state or online business friends and connections. You may have some friends who would probably go with you even though they are out of state or process online. To sell them and see how it goes before you commit to a local prospecting strategy is very tempting. However, your thinking should be, “My friends are a valuable connection to me. I am going to wait until I know what I am doing and have some experience under my belt before I contact them.” Out-of-state and online merchants are probably five times more difficult to sell and walk through the installation process. So why would you want to waste time on this now when you have hundreds of businesses within a few miles of your house that you can easily sell, install and service? If a friend who is not local or processes online contacts you, be honest. Tell your friend you’re still learning and will follow-up in a few months once you are confident you can evaluate his or her unique needs and provide the best solution possible.
- Don’t sell online or mobile processing merchants. (The one exception would be a standard merchant who needs a mobile or online processing solution in addition to the standard account.) As a new agent in this industry, you need to focus tightly on your target market. Mobile processing merchants and online merchants are always either more difficult to sell and set up and/or much less profitable than a standard merchant.
- If a deal has less than $25.00 total monthly profit, walk away quickly! Again, the enemy here is time spent doing one thing which could be used to do something else that is much more profitable. There are things you can do to increase profit on an account. You should talk to your sales trainer about this. However, once you have exhausted the options and know the profit is this low, move on. On a merchant who has $25.00 or less in total profit, you are going to make $12.50 per month with an up-front bonus at either $0.00. So why spend all the time necessary to sell and service this deal, when you could use that same time to sell a deal which would pay you $200 or $300 up-front and $30+ per month of personal profit?
- Never pay more than six times your monthly profit up-front to get a sale. Out of desperation and nervousness many new agents use this and/or their up front compensation to close deals that are not profitable enough to justify this investment. NEVER, NEVER, NEVER!!!! promise to pay a merchant anything up-front through this program or from your own up-front compensation until you know what the monthly profit will be.
So you might be wondering, “Where do I find these target market merchants that are so profitable and easy to sell?” Finding them is not difficult. 75% of physical location, individually owned retail / restaurant businesses fit the criteria mentioned above. Just walk into any retail / restaurant location in your market that has a physical location to walk into and is not corporately owned. You have a 75% chance of being right where you want to be. As soon as you realize you are not in the right kind of business, STOP SPENDING TIME ON THAT DEAL and start spending time on another deal that is part of your target market. Put these “non-target market” deals on the back burner. Visit them again in three or four months when you will be better equipped to evaluate and sell these deals.
I hope this helps you make your time more efficient!
James Shepherd “Always Leveraging” firstname.lastname@example.org
Read the previous post: Quick Marketing Tip – How to Sell Merchant Services
Read the next post: Growning Your Merchant Services Net Worth