Acquiring: The Tech Touch—And the Human Touch

Kevin Woodward

Small-business owners want new technology that helps them grow their businesses. But they also want a sympathetic ear and a ready smile. How merchant sales has changed—and hasn’t changed.

The small-business owner has been the bread-and-butter client for many independent sales organizations and acquirers, but in the midst of rampant technology change, along with a bevy of self-service payments products, an altered effort may be needed.

Smart phones and tablets are the poster children for much of the change that consumers and business professionals alike now incorporate into their daily lives. Merchant-service providers are not immune from this. Indeed, the always-connected consumer, whether at home or inside a store, is having a profound impact on the merchant-services business and altering sales strategies.

Already on the path to retirement, the selling-on-rate-alone strategy is being quickly displaced with another, one that requires greater sophistication on the part of a merchant-services company and its salespeople. It’s one that may endear the small-business owner to the MSP, and one, in the long run, that may have a positive impact on that old bugaboo—attrition.

Why is this happening? Small-business owners want more tools to grow their businesses, and the advent of tablets and smart phones is empowering that demand.

“It’s in the process of shifting dramatically,” says Elizabeth Rector, senior vice president and general manager for mobile and e-commerce at Vantiv Inc., a big merchant and card-issuer processor based near Cincinnati.

Smaller businesses are thinking more and more about ways to better understand their customers, she says. In turn, that is altering how they regard payments. With valuable data tied to the transaction, such as the size of transaction and frequency of purchase, merchants want tools that let them use that information to learn more about their consumers.

“They’re thinking more and more about how they can better understand their customers and how their customers buy,” Rector says. “Payments are really shifting from something they thought about as a financial decision to one that is about what the customer experience is going to be like.”

Indeed, in a report published last year by Adil Consulting, an Omaha, Neb.-based payments-consulting firm, 55% of 817 merchants named increasing their sales as a top priority for the year. Only 2% said reducing costs was a top priority.

“Merchants don’t really think about payments,” says Adil Moussa, principal at Adil Consulting. “When they do think about it, it’s as a tax on top of everything else they pay.”

An Emotional Pitch

So then how do merchant-services providers, independent sales organizations, and acquirers get merchants to think about payments as more than a “tax?”

In many situations, the small-business owner is beset with a myriad of decisions that she must make daily that have long-term strategic value to her business, Moussa says. In these instances, he advises sales agents to assume the prospect will be reactive, instead of proactive. “If you’re dealing with a merchant who’s a single owner, most of the time she’s so busy her response is going to be gut level,” Moussa says.

“The problems that merchants face represent pain points,” Moussa wrote in his “Understanding Small Merchants and the Methodologies to Acquire Them” report published last year. “Pain is mostly emotional.”

Selling to the emotion associated with the merchant’s pain, such as long hours keeping an owner away from her family, “… is a more powerful incentive and selling message than talking about return-on-investments, savings in processing costs, etc.,” he says. “The decision-making is, therefore, emotional rather than rational. The same principles that are used to advertise to consumers work extremely well on small merchants.”

Those principles usually entail some benefit to using the product or service, such as saving time or money.

Electronic Merchant Systems takes a similar approach with its prospects, says Dan Neistadt, chief executive at the Independence, Ohio-based ISO. “The approach we take is not how much money I can save you, but how much money I can help you make,” Neistadt says.

That perspective means sales agents can then sell many types of products, he says. “We can bring the full capabilities of the company to bear regardless of the size of the merchant,” Neistadt says. In addition to traditional point-of-sale services for card-present and card-not-present transactions, EMS also offers a mobile POS app and reader that carry one swipe fee—2.25% regardless of the card presented—and no monthly fees, a service micro-merchants might use.

“You’re no longer walking away from micro-merchants,” Neistadt says. “In fact, you have a high-quality, less expensive product in hopes that someday the micro-merchant grows sufficiently enough to be a brick-and-mortar merchant,” Neistadt says. “Regardless of the size of the merchants, all merchants have a desire to be bigger.”

Even if a merchant has that desire, persuasion may still be called for, says Brad Staudt, vice president of sales at Clearent LLC, a Clayton, Mo.-based ISO. Even with the upheaval, real and perceived, from new competitors like Square Inc., the sales process still requires persuasion, he says. “At the end of the day, a lot has not changed,” Staudt says. “It’s the same sales process. The same objections.”

The Eye Roll

Clearent sales agents are taught the most common merchant objections and ways to counter them. With the advent of new payment technology like mobile POS readers and apps, one objection in particular seems to be gaining ground: the eye roll. This classic expression of skepticism is a signal to Clearent’s sales agents they must do more to separate themselves from the competition, Staudt says.

Yes, when that happens, it helps that the sales agent’s products are technologically distinct, but the greater issue is trust, he says. “It’s all about trust and building the relationship,” Staudt says. “It’s harder to do now because so many merchants have been burned in the past. Merchants are hungry for someone they can work with, with no surprises, someone they can trust.”

That can be especially vital as merchants contend with the variety of payment services available now. “I get calls every day about flat-fee processing, iPad POS devices,” Staudt says. Merchants see ads from the likes of Square and they’re trying to understand them. “It really opens an opportunity,” he says.

There’s no question in Rector’s mind that mobile devices are accelerating change in the payment-services business. “The more proficient the business owners are with mobile devices in their own lives, the faster the business adoption will be because of how close their business lives and personal lives are to one another,” she says.

Still, sales agents should use that opportunity to earn the merchant’s trust, Staudt says. “Once you do that, they’re more willing to show you their pain,” he says.

One way sales agents can build that trust is with the proper demeanor and language, Moussa says. The sales pitch has to be friendly, inspire trust, and be very direct, he says. His recommendation is to speak with a merchant as one would when speaking with friends. “It is about creating a sense of familiarity instead of being a stickler about grammar and style,” Moussa says.

For example, Moussa suggests avoiding the use of the word “merchant” because that is rarely how the small-business owner identifies himself. “If you’re talking to a merchant and referring to them as a merchant, that’s where you’re losing them,” he says. Other suggestions include dropping the payment industry jargon and using simple phrases, such as “take credit cards” instead of “payment acceptance.”

Such tactics may aid ways sales agents can better know and understand what their merchant prospects are looking for, says Vantiv’s Rector. “The market is moving fast and we’re finding that some are tech-savvy and already own their own devices,” Rector says. “They’re fully well-versed in downloading applications. There’s also another group of businesses that are accustomed to ordering or buying their solutions and having all of that packaged for them.”

In addition to traditional payment-processing services, Vantiv launched two mobile POS products in the past year, including a mobile POS system with a cash drawer, scanner, printer, and inventory management and marketing software.

With these products, Vantiv and its sales agents, like those at EMS, have more to offer merchants. “It’s now being able to broaden the conversation to the real question of how they’re engaging their customers, and how they’re seeing their analytics and performance,” Rector says.

Sales agents can help merchants answer questions such as which of their customers are their best ones, she says. “The questions have changed and broadened, but the fundamentals of how we build these relationships haven’t changed.”

Harkening back to Moussa’s model of selling to the small-business owner, Rector says the successful sales strategy is derived from how one thinks about the merchant. “The way we’ve approached it from the beginning is, it’s an understanding of the fundamentals when selling or servicing a small merchant, the difference is the decisions they make are very personal,” she says. “Good or bad decisions they make are the difference between whether they take their families on a good vacation or stay at home.”

Finding Comfort

If the relationship building is a constant for merchant sales, does that mean any sales agent can sell to today’s merchant? Very likely, but it’ll require adaptability. At Clearent, Staudt says some salespeople are reluctant to take on a new product, especially if they’ve built their residual income on tried-and-true payment products.

“It’s hard to teach them new things,” Staudt says. “Some are willing to adapt to new things.” Typically, he uses incentives and education to help them.

Regardless of technical aptitude or age, the central quality Staudt looks for is motivation. “We look for the truly motivated, who have a history of outside sales,” he says. “We try to understand their daily lives. The ones who are more techy are willing to try new things.”

And those with little payment experience often are much more willing to sell new products because they don’t know the difference, Staudt says.

At Vantiv, Rector says salespeople need to have some technical proficiency, especially if they are selling mobile POS products that rely on smart phones and tablets. “They have to themselves be really comfortable, particularly in the mobile space,” she says. That proficiency actually extends to everyone within the payment company who may have contact with merchants, she says. “Now, it’s not just the salespeople but everyone who potentially touches the customer.”

Independent of a sales agent’s technology aptitude, a merchant sale is made based on the merchant’s like for the salesperson, Moussa says. Therefore, ISOs and acquirers should not alter their sales-staff selection criteria, he says. “People do business with people they like,” Moussa says. “It’s not about the product. It’s not about that when it comes to small merchants. When a salesperson shows up, he talks to you as a human being to another human being.”

Sales agents should understand that merchants may not view all things as immediately urgent, especially payments, says Rector. “We, as payments people, need to understand what the primary pain point is and address it. Because the solutions are so broad, if you tell a merchant the 50 attributes a cloud-based POS system can do for them, you’re going to overwhelm them,” she says. “Use the primary pain point, then be ready to be there to help them solve the next problem. If you’re not careful, you can overcomplicate the situation. You really have to be smart and be on top of what’s important to your client.”