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ISOs increasingly are replacing straight-pitch sales tactics with consultative selling, which can close more sales and reduce account attrition in a competitive market, observers agree.
Straight sales pitches tend to provide an overview of products and services, while consultative selling focuses on developing long-term relationships between ISOs and merchants.
"Relationship-based selling is important today" because many merchants find traditional sales pitches stale, says Donna Embry, senior vice president with Payment Alliance International, a Louisville, Ky.-based ISO. In the usual straight pitch, ISOs look at merchants' bankcard statements and offer products to save them money, she says. "Retailers are used to it. They don't necessarily want to give you their statement," adds Embry.
Delivering the same sales pitch to each client is an antiquated method of doing business, agrees Mike Berman, chief operating officer of Outside Ventures LLC, a New York-based investment and management company that owns several merchant-services providers, including Trinity Merchant Services LLC and Tribul Merchant Services LLC. "If you're pitching a product, you will lose opportunities as a salesperson and hurt the merchant" by failing to address its specific business situation, Berman says. With consultative selling, "it's about their business, not my product," he adds.
Tailor Discussions
Merchant-level salespeople should "tailor each meeting to the individual client" instead of delivering similar pitches to all of them, says Scott Goren, vice president of sales with SB Direct Inc., a Newburgh, N.Y.-based merchant-services provider. "If you're dealing with someone who does $500 of business and a CEO who deals with $5 million, you have to have a different conversation with each one," Goren says, adding that he does not believe straight sales pitches succeed.
Agents that tailor pitches by doing more research on merchants before speaking to them tend to close more sales, says Berman. "They make fewer calls, but when they call they have something relevant to talk about," he says.
Agents also earn more revenue by establishing long-term merchant relationships, Berman adds. "ISOs and agents end up more profitable from the close merchant relationships because they keep the merchants' business longer."
Guarding Against Attrition
Taking a consultative approach when selling products and services also can guard against merchant attrition, says Scott Goren, vice president of sales with SB Direct Inc., a Newburgh, N.Y.-based merchant-services provider and independent sales organization. "If you provide the value from day one, you might keep them longer than just signing them up," he says.
ISOs can stay relevant to merchants in a competitive market by providing expertise and value, says David Fish, senior analyst at Maynard, Mass.-based Mercator Advisory Group Inc. "It's not really about price anymore. It's all about value," Fish says.
The merchant-level salesperson is "someone that the merchant is contracting with to serve as an expert" in payment systems, says Fish.
Build Long-Term Relationships
The consultative-sales approach, however, may mean fewer sales up front for ISOs. The approach "sometimes hurts the sale, but it's better in the long run," Goren says.
He describes speaking with a daycare merchant who is paid primarily by government social services agencies and not by consumers. Though the merchant believed she needed a merchant account, Goren persuaded her not to get one. "I talked myself out of a sale because I wouldn't want someone to say she's stuck in a contract" that she does not need for her business, he says, adding that unhappy merchants can hurt an ISO's word-of-mouth business.
When using consultative-selling tactics, agents should begin a merchant meeting by asking specific questions about the merchant's business, says Berman.
"It's not talking about products or services; it's asking about their business," he says.
First Capital Payments' agents begin by describing the ISO's credibility and talking about the merchant's business, says Hiram Hernandez, CEO and co-founder of the Rochester, N.Y.-based ISO. Sales reps "should talk for 20 to 30 minutes about the merchant before getting into any credit card rates or processing," he says.
How Much Research?
Agents should decide for themselves how much research to perform before a merchant meeting, observers agree. At a minimum, agents should understand the typical needs of a merchant in a particular market, such as restaurant owners versus Internet retailers, says Hernandez.
Based on the merchant's market, "we try to pick and choose the value-added features to offer," such as cash advances for restaurants or gift card services to hair salons, he says.
