Smarter Feet on the Street

The sales-agent model is far from obsolete. Agents just need patience and the right training, experts say.

Other sales models may garner more attention, but the traditional sales agent continues to have a place and a future in merchant services.

Even when it appears that every processor is courting software developers, adding payment-facilitator sales models, and looking at direct sales channels to build its merchant portfolios and associated revenue streams, the tried-and-true sales-agent model continues to have a valuable place in merchant services.

Feet-on-the-street sales—so named because merchant-services sales then meant visiting business owners in person—was the original sales model for merchant services during its early days, but as payments technology improved and merchant sophistication developed, new models emerged.

Witness Global Payments Inc.’s perspective. In the first quarter, the Atlanta-based processor, which is in the midst of a $21.5 billion merger deal with Total System Services Inc. (TSYS), cited its direct-sales merchant-acquiring operation as a growth factor. In contrast, revenue from the U.S. wholesale business, which uses independent sales organizations to sell Global Payments’ services, fell in the high teens in percentage terms year-over-year.

Global Payments continues to tilt toward software-based services linked with payment processing, and its direct-sales operation.

Merchants are moving to more sophisticated payments products and sales agents are adapting.

“Models like direct distribution, the [independent software vendor] referral network, and online enrollment are all viable models that fill a gap here and there, so there should not be a ‘take-it-or-leave-it’ approach,” says Ryan Malloy, senior vice president of partner sales at Troy, Mich.-based North American Bancard LLC.

“Our approach remains to be centered around making sure we provide the best tools that merchants want,” he continues, “and who better to understand the pulse of the merchant community than the sales partners that are entrenched in those respective businesses?”

Sales partners are essential to NAB, Malloy says. They form unique relationships with merchants because “their success is influenced by the success of the merchant’s business,” he says.

Keeping Pace

That’s never been more important as merchants increasingly adopt point-of-sale systems in lieu of standalone countertop POS terminals. The payoff for acquirers is great. Merchants are less likely to defect to other processors if their payment acceptance is an integral part of their business software. Merchants also may more easily use third-party apps with the POS software.

Selling such versatile products requires more than leaving a rate card and a product brochure on the merchant’s countertop. It requires more training and an enduring commitment to stay current not only with new payment products, but also with the merchant’s business, whether it be dining, apparel, retail, or some specialty industry.

“I read everything I can about small businesses,” says Mark Dunn, owner of Field Guide Enterprises LLC, a Hartland, Wis.-based training and consulting firm. Dunn regularly offers training seminars in conjunction with regional acquiring conferences, in addition to paid training.

One technique involves talking with a business owner without rushing to close a sale. The idea is to learn about the issues facing the merchant. “I try to listen carefully,” Dunn says.

Another technique that has worked for Dunn, whose payments career has included sales positions at TSYS, Global Payments, and Verifone Systems Inc., is to ask a high-value question about the client’s business.

“High-value questions are those that bring greater value to the discussion and frame the issues in a way that does not threaten or pressure the business owner,” Dunn says. For example, if trying to sell a merchant cash-advance product, the question might be “What value would having an additional $75,000 of working capital have for your business?” he says.

Incorporating these fundamental sales techniques can help sales agents keep pace with the ever-changing payments landscape. It’s one of the reasons companies like NAB continue to rely on sales partners, Malloy says.

“The traditional sales-agent model is perfectly positioned to adapt as the landscape evolves,” he says. “This model relies on relationships and is at the core of it being successful. This model can adapt and retain its value by seeing what the competition is doing, and how non-traditional players in the market have forced evolution.”

A case in point is Square Inc. and how it changed merchant services (“How the Twitter Guy Changed Payments”, this issue). Prior to the late 2009 debut of the Square card reader, no other large acquirer focused exclusively on an online-only distribution model. Since then, Square, and many other entrants, such as ShopKeep and Shopify, have made online sales a must-have channel for the industry.

The Payoff

Like others, NAB views this channel not as competition for their other distribution methods, but as a collaborative move, Malloy says. “Because we integrated with hundreds of software providers, our sales partners work with ISVs instead of against them. We are constantly integrated with new software providers so we can offer greater features, or even fine-tune what we already offer.”

In this environment, staying relevant is vital. “Today’s sales partners can stay relevant by continuing to evolve with the tech age,” Malloy says. “We are already seeing it.” It is particularly evident in the small and mid-size business market. Because of the ultra-slim profit margins at these merchants, they need an affordable product suite that provides multiple business tools, he says.

“How [salespeople] remain relevant is by continuing to build relationships with merchants and customize a solution that fits the current and future needs of the merchant,” Malloy says.

“Perhaps the merchant is exclusively doing business online, but decided that they want to establish a brick-and-mortar location,” he continues. “The sales partner has the tools and resources to offer so that the merchant can establish that physical location, suggest a smart [POS] terminal, or help the merchant send an invoice. By adding value to the merchant’s experience, and becoming a partner instead of a vendor, is how the model will evolve.”

That’s where Dunn’s suggestion to listen and learn can pay off. When making a sales call, an agent should know the owner’s name, the nature of the business, and “every other detail you can learn in advance,” he says. He suggests asking for a minimum of 20 minutes to speak with the owner, though 40 minutes is better.

Getting to the point where the sales call is smooth and a merchant’s questions can be anticipated and answered takes practice. “Persistence and patience pays off,” Dunn says. “Merchant services is a long-term play and all of the big payoffs are several years down the road.”

Other advice for the sales agent is to get the best possible training and to make sure the ISO or agency you sell for is investing in you, he says. “Keep improving your skills. A professional learns something new every day. Don’t assume you already have mastered the sales role.”

This affinity for self-development is why companies like NAB find sales agents so valuable, Malloy says. “Many merchants want to shake hands with and trust the person they are doing business with,” he says. “Technology is evolving at a pace where in-person demonstrations are necessary to help merchants become comfortable in using their newest solution.”

For the Future

The complexity of merchant services, with POS systems, loyalty programs, business-management software, and other technologies, means training is unceasing and can be involved. “If you’re not ready to invest a couple of years in learning the business, your timeline is probably too short,” Dunn says. “It takes time, active effort, and good training to make it in this business, which has a lot of moving parts.”

The sales-agent model is evolving. “Leveraging new ways to engage with sales partners means better solutions for the merchants,” Malloy says. “This model will evolve as we continue to offer the latest training videos to sales partners, new and diverse engagement opportunities through social channels, or by curating entire events about the success of their portfolio.”

With investment and expertise, the sales-agent model works now, says Malloy, “and for the future.”