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Competing With Square on Price
Most of you have this mindset about Square pricing, “I can’t compete with Square. They have the flat rate, making it really simple.” And most...
I’m sick and tired of sales people walking out of merchant locations because they see Square. They think they better just move on to the next merchant. That approach might have worked a couple years ago, but Square is fast becoming a strong contender. We are in business to compete; we want to beat […]
I’m sick and tired of sales people walking out of merchant locations because they see Square. They think they better just move on to the next merchant. That approach might have worked a couple years ago, but Square is fast becoming a strong contender. We are in business to compete; we want to beat our competition. Today I’ll teach you part one on how to compete against Square by selling Clover and Poynt.
Unfortunately, most ISOs and agents aren’t getting any training on how to compete with Square. There are many markets right now where Square is very, very prevalent. If you don’t know how to compete with Square, you’re in trouble.
Are you ready to learn about Square’s 2 weaknesses?
There are some weaknesses of Square’s platform which we can use to our advantage.
#1. Lack of support and training for merchants. Although Square’s technology has become significantly better, there are no representatives in the field to train merchants in using the technology. Therefore, businesses miss the benefits.
If you see a Square register on the counter in a business, proceed with your usual opening and small talk. Then you could say,
“Probably a big reason you got Square was for the technology to help you grow your business and cut costs, right?” [The merchant agrees.] Then you continue, “Okay, that certainly makes a lot of sense. Let me ask you a question. How has the Square register helped you so far to increase your top line revenue or cut expenses?” The merchant is probably going to realize that it hasn’t helped.
Then you can point out the problem that Square doesn’t come WITH the support and training to help merchants understand and implement the system.
You can say, “You need somebody that actually understands these systems to help you implement them, right? So, you really want a company to provide that extra layer of support and training. There are many powerful point of sale systems available. Square is definitely not the most powerful; it’s on the lower end. I can show you much more powerful systems. But all that power is meaningless unless you’re using it, right? Let me show you something real quick.”
Show the merchant a system like Clover or Poynt and explain specific benefits that you would help them implement.
#2. The core promise about simple, flat rate pricing is not entirely true. Without knowledge to implement the technology, merchants choose Square mainly to take advantage of the simple 2.75% flat rate pricing (which is now 2.6% + $0.10 with the latest price increase).
What a big mistake they made in that case!
Go to squareup.com and click on their pricing. Use the drop downs to choose the Squarer Register. You may be surprised to find that the Square register, which is what most physical location merchants are using, is not 2.75% flat rate (neither are any of their solutions after the recent price increase.) Complications such as a per-item fee and non-swipe fees have been added. These changes not only undermine their claim of simple flat rate pricing, they also remove the advantage Square had with small ticket merchants.
Some merchants loved Square because they enjoyed the simplicity of a dongle on their phone, so they decided to get the Square register. They’re now paying more than 2.75% effective rate depending on their average ticket.
Next week, in part two I’ll reveal the best strategy to clinch the victory in this competition with Square. They have a very sizeable chunk of business because our industry hasn’t launched a concerted effort to compete with them. Don’t miss the conclusion of this subject in my next episode.
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