How to Sell Subscriptions to Large Merchant Accounts

The payment processing industry is shifting toward simplicity, such as cash discounting and flat-rate pricing.  This bodes well for green agents.  They can prospect small mom and pop places, salons, auto repair, pizza shops and sell them rather easily with these programs.

Are you lost?

However, those of you with five or more years of experience in payment processing may be getting lost.  I’m referring to those who understand how interchange works, how to read a processing statement, know what a gateway is, etc.  Perhaps you’re very good at sales, maybe making a fortune selling cash discounting.  (Good for you.)

As yourself, “How can I convert my knowledge to value?”

There are opportunities to leverage your payment processing expertise to make a lot of money. One such opportunity is in pursuing large merchant accounts. 

“Large” means businesses doing more than $200,000 in monthly processing volume.

These large accounts are not looking for cash discounting or surcharging programs yet.  They’re still all about cost savings.

What’s the difference?

One big difference for big businesses is their markup.  They pay $10,000 to $30,000 per month just for markup, not including fees.  With all that volume, there’s plenty of room to work in these big accounts.

Although pricing may already be low (15 basis points and $0.05), that is a lot on $4 million per month!  This is a great opportunity.

What’s the problem?

The problem with these large accounts is they don’t want to switch processors, at least not initially.  You may offer $7,000 per month in savings.  You’d expect to have a sale in the bag with that kind of savings.

But the merchant may have a POS system which costs a half million dollars.  And you don’t integrate with that system.  $7,000 per month in savings versus a new half-million-dollar POS is not so appealing to the merchant.

• Maybe the business has an ERP system.
• Maybe there’s an advanced accounting system.
• Everything is tied together in the business system.
• Maybe there’s just sheer operational concern of switching.
• Maybe the merchant doesn’t trust you enough. $2 million a month in revenue is a lot with which to trust a stranger!

How to get your foot in the door?

Use the subscription model!  Here’s an example pitch:

“Look, I know what I could save you if you switched to me for processing.  However, I get it’s not a realistic possibility, at least right now with all the integrations to deal with.  So, let’s do this:  I’ll make you an offer.  Although I could save you $7,000, I’ll guarantee to save at least $4,000 even with your current processor.  And I will do a full statement analysis every month.  I’ll send a report every single month on how much you’ve saved by working with me to lower the rates.  I can do that if you pay me a subscription of $300 p/mo.  That means you’ll get a lot of my time up front, so I’m going to get you to sign a 12-month agreement.  I’ll spend a lot of time renegotiating with your current provider, so you don’t have to switch.  Then I’ll look at your statement every month and give a savings proposal.  For that, you’ll pay me $300 per month.”

What do you get?

That $300 is all yours.  You keep 100% of it.  Depending on the size of the account and amount of savings you guarantee, the monthly amount could be $500 or $1,000.

What’s your job?

Most processors bend over backwards to keep a larger account.  Thus, renegotiating rates is usually easy. 

• After the merchant agrees to hire you and signs a contract for services, reach out to the current processor with wording like this:

“This company hired me to look around and find the best rates.  But my job would be easier if you’d just lower your rates down to $__.  Then I promise I won’t even look for anyone else; we’ll just work with you for another year.”

• Every month send a proposal showing where the business was and where it is now. Leverage a solution like our getisoamp.com. 
•  Use a statement dated before you started helping the business as the competitor comparison. Then use the new statement as a proposal.  Every month show the merchant that his/her investment of $300 saw a return of whatever the amount of savings generated.   

What are the benefits?

You’re building a long-term relationship which will have benefits for both sides.  The merchant will love having a payments expert to keep costs down.  You’ll catch any price increase or anything crazy going on.  The merchant has no more processing worries.

Down the road you can implement other helps like interchange optimization.  Usually during the time of your service contract, you can evaluate a way for the merchant to switch.  

After working with the merchant for 6 to 12 months, you’ll know the business’ system inside and out.  You can say,

“Look, after 12 months, you know the savings I can provide.  However, you’re still missing out on $___ a month in savings because I can’t implement interchange optimization with your current processor.  It’s too complicated.  But, if you switch to me, I can.  Here’s the great news!  I’ve found a solution that’s going to work with your current POS system.  It will cost you $10,000 to integrate.  Then we’re good to go; you can save the extra $__ per month.”

But, if not…

If you can’t make a way for the merchant to switch, you’ll still get paid forever!  You’re the business’ payment expert; they won’t switch without you.  Thus, you have the account locked in and are getting 100% of the revenue with only minimal work needed after the initial time invested.

Think this through.

Hopefully, many of you who are experts in payment processing will think through this idea.  Buying a list of large businesses in your area is not hard. 

Search for “businesses that do over half million dollars in revenue per month.”  Then go after them. 

You’ll be surprised how receptive they would be to a true payment processing expert.