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From the September/October 2009 issue of ISO&Agent.
In the year since Century Payments formed, Matt Downs, president of direct sales, estimates he has interviewed 70% of the 300 salespeople the nascent Frisco, Texas-based payment processor has hired. From those interviews, Downs has determined that many qualified candidates exist from other industries.
But not all salespeople from outside the payments industry have the experience and sales ethics merchant services demands, he says.
An ISO's quest for skilled salespeople adept at closing sales is relentless, pushing sales managers to look everywhere-even outside of payments-for the next big closer. Many merchant-service providers have success mining other industries, but the work is not without its hazards.
Where do ISOs find qualified salespeople from outside the payments industry? Conventional thought suggested the abundance of out-of-work mortgage brokers might be a good source. That is not necessarily so, contends Gino Kauzlarich, president and CEO of MerchantService.com, a Sarasota, Fla.-based ISO.
"I thought we would have had better success with mortgage brokers, but it's either been absolute failure or homerun hitters," Kauzlarich says. The distinction really comes down to the individual, he says.
Car salesmen also do not fare well in merchant services, Kauzlarich says. "A car salesman is used to showing up at a particular day and time," he says. "They generally do very poor at outside sales."
The better candidates tend to come from disciplines where they have objectives to overcome, such as former soldiers in special forces units, Kauzlarich says. Soldiers used to just pulling watch duties typically are not as good, he adds.
Nonmilitary candidates that have done well for MerchantService.com have come from positions where they were ran routes, such as pharmaceutical or medical-device sales, and proved they could get past a "gatekeeper," such as a receptionist. Other successful salespeople have sold vacuum cleaners or have championed their religion door to door, Kauzlarich says.
Downs says he, too, has had success recruiting individuals from business-to-business positions, such as copier, telecommunication sales and outsourced payroll services.
"They are generally high-touch, high-prospect" individuals, whom Downs defines as anyone who can generate large numbers of leads on their own.
If the candidate has completed another company's well-respected training outside of payments, even better, Downs says. "They are taught the fundamentals of sales, from prospecting to profiling," he says.
A TEACHABLE MOMENT
Salespeople from outside the payments industry also may harbor a valuable trait that their experienced merchant-services counterparts may not retain: they do not know what they do not know, says Jeff Johnson, principal at Bancroft Career Advisors, a Dallas-based payments recruiting firm.
"It's actually very effective to bring in salespeople who don't have any bad habits or preconceived notions about the payments industry," he says.
Couple that with the candidate who has been through a respected sales-training program, and a merchant-services company likely will benefit, he says.
"Bringing a better salesperson who has been trained in 'Sales 101' skills is a better prospect because he has the discipline usually to go through the steps of building a strong business," Johnson says. "The payments piece can be taught."
Earlier in his career, Todd Ablowitz, now president of Double Diamond Group LLC, a consulting firm based in Centennial, Colo., was responsible for hiring and managing scores of salespeople. "I used to look for people specifically not in merchant services but who had at least one year of business-to-business sales experience," he says.
The objective was to avoid picking up candidates who were used to selling merchant services in a particular way but still had initiative and motivation to pound the sidewalk to find sales, he says.
As Kauzlarich also did, Ablowitz found good candidates in the payroll and wireless-phone sales markets. "I found that many bankers were not good candidates, and some were," Ablowitz says. "I could tell by how aggressive they were and what they were selling. Most banks typically do not have a culture that invites aggressive selling techniques."
TRANSLATABLE SKILLS
One distinction is the candidate's ability to generate leads. A person who is used to waiting for leads may not be enthusiastic about knocking on doors and making cold calls.
"Typically, good candidates come from a background of achievement," Downs says, noting that could involve a professional, athletic of some other endeavor that involved competition. "They will find a way to their goal."
For Downs that means reviewing a candidate's resume to detect growth patterns: Did the person move up in responsibility in a reasonable timeframe? Are they moving up versus someone who is stagnant?
Curt Hensley, president of CSH Consulting Inc., a Phoenix-based payment-recruiting firm that has seen a number of merchant-services companies bump up their sales-staff hiring in recent months, says it is common to want someone who can translate their work skills into sales.
"They want someone who knows how to put their day together," Hensley says.
Candidates new to payments also may help an ISO's budget because it may be possible to pay them a lower commission until they have proven their sales ability, he says.
That is not because the new salesperson does not have the knowledge and ability to sell, but the proof has not yet materialized, he says. So the new hire may command less compensation until sales thresholds are met.
Some salespeople expect a base salary with commission, so they may have difficulty getting used to being an independent contractor and receiving an IRS Form 1099 that details their gross compensation, leaving it up to them to pay taxes on what they earn, Johnson says.
"To them, '1099' and '100% commission' are dirty words," he says.
Hensley says his experience shows that compensation packages vary so much within the merchant-services industry that is it difficult to say whether a candidate's status as coming from outside of payments is enough to say the person can be paid less than someone with payments experience.
Companies that can provide a guaranteed ramp up and a "logical compensation] plan" can overcome an expectation of a base salary, Johnson says. "The right people will still be drawn to a heavy incentive comp plan, weighted toward commissions," he says. "But they'll only consider it if they can easily see how the commission is derived."
If the compensation plan is not clear, candidates will "equate the plan with many poorly run companies that falsely advertise. Salespeople have been burned by weak companies that rush to hire and have poor compensation strategies," Johnson says.
Experienced salespeople from other industries Century Payments hires usually are on the payroll as direct employees and not as independent contractors, Downs says.
Before an ISO can discuss compensation plans with a candidate, it must find the salesperson. While learning to avoid certain industries, Kauzlarich also picked up some insight on how to find the candidates he wants.
FINDING THE SUPER-SALESPERSON
"Always, the best for us is the personal referral," Kauzlarich says.
Bancroft Career has used online recruiting ads and has been disappointed with the quality of resume submissions, he says. Kauzlarich also avoids traditional print advertising because the results consistently have disappointed, and it is expensive.
Century Payments' Downs also considers networking the best source of candidates.
"Historically, one of my best feeders for top performers is employee referrals," he says. "Generally, they won't offer a slouch, and you get some built in mentoring that comes along with [the hire]." The referring employee has a vested interest in seeing the new hire succeed at the company, Downs says.
Century Payments also has tried recruiting using an online social-networking Web site, and it uses recruiters because they can tap into various worker networks, Downs says.
"We stay off the job boards," he says. "Generally, high-caliber salespeople aren't hanging out waiting on a job board."
Downs believes in the value of networking so much that a candidate's ability to network can be a factor in his hiring decision. "As I talk to a candidate and see she is a natural networker, that's an automatic hit right there," Downs says.
An ISO's approach to training also can be a factor when hiring salespeople from outside of payments, CSH Consulting's Hensley says.
"We need to match up the candidate with what the offering is," Hensley says.
If an ISO does not have a training program, it should not go for individuals from outside of payments, he suggests. For example, an ISO sales program may require salespeople to generate a majority of their own leads. Someone used to having their leads supplied to them could have an uneasy adjustment.
"I wouldn't hire a person that worked with 80% of their leads supplied [to them] to a position where they have to develop all the leads their selves," Hensley says.
Johnson also suggests that advantages to hiring from outside of payments is the potential for better average tenure at a company and the ability for the new salesperson to perform well.
It can take longer for this type of hire to get industry savvy, Johnson says.
"You also have to expect more the 'entitlement generation'-related headaches. Every new graduate thinks it's their constitutional right to immediately earn $100,000," he says.
Coaching, mentoring and effective communication can help set the right expectations and foster loyalty. "If you can get them through the first six months, your average tenure will trend higher," Johnson says.
TRAINING CRITICAL
Good candidates rarely stay available for long, observers say.
"Just because there is severe unemployment nationally, that does not mean that there are payments-ready candidates on every street corner," Johnson says. "Good salespeople aren't on the street long."
The reason is that layoffs most often happen to the "bottom 25%," he says. "Then [companies] focus on redundancies. They keep their stars."
ISOs should consider candidates who are in the top 20% to 30% of sales performance, Hensley says.
Johnson recommends avoiding more senior-level salespeople who will take a pay cut to get the job. "Less gas in the tank; and they'll jump at the first chance to make more money once the economy improves," he says.
Even if the new hire has some experience, ISOs should continually monitor the person's performance, especially during the first few weeks on the job.
"Our goal is to separate the wheat from the chaff," Kauzlarich says. "It never takes longer than six weeks to find out. All the misrepresentations, fallacies and lies will come home to roost within six weeks."
Century Payments also hopes to avoid "mishires," candidates whose credentials appear solid but who fail to materialize in the new position.
To ensure the success of new hires, Century Payments puts new hires through an in-person seminar where they are taught the basics of the industry. Training staff also go to a saleperson's location to train them.
"We try to dumb it down in the beginning, as the industry is very complex," Downs says. Interchange, for example, can be challenging because of the hundreds of possible variations of fees assessed a merchant.
Century Payments' pricing department works with new hires to help educate them about rates and fees. This helps ensure they understand how pricing works and are able to explain it to merchants, Downs says.
Another training component is an online-training site where the salesperson can complete coursework. Century Payments uses a minimum of four different training sessions with new hires, Downs says.
Despite the rising complexity and sophistication of the payments industry, numbers still rule. Salespeople are measured on how many merchant accounts they secure and on the number of products a merchant buys.
"There are fundamentally two groups [of salespeople] out there," Kauzlarich says. "Those who wait like a spider for something to fall into their web ... and those who come from search-and- destroy position ... ."
Kauzlarich prefers the latter. Ultimately, however, the best salespeople are those who are enthusiastic, knowledgeable and personable.
