High-margin packages may be tempting to sell, but matching solutions to your clients’ specific business needs, whatever the profit, will lead to a longer-lasting relationship and a greater payoff in the long run.
Merchant services providers frequently face a dilemma: Sell the payment solution with the highest margin, or sell the one that more closely matches the customers’ needs. Even though it may be hard to pass up a bigger win in the short term, there are at least three compelling reasons to sell SMB customers the right platform for their businesses, especially given the challenges they continue to face here in 2021.
1. Increased customer loyalty.
The value of customer loyalty is more than the monthly revenue you receive from an account. It also impacts how efficiently you operate. When your customers are satisfied with the solutions and services you provide, you’re less likely to experience churn. That means you’ll spend less time replacing lost business that you need to cover expenses, and more time focusing on the growth of your portfolio.
2. Opportunities to sell deeper.
When you offer the optimal solutions to your customers, you’re also increasing customer lifetime value (CLV), a key performance indicator (KPI) for merchant services provider business growth. The initial sale to a small or mid-sized business owner is only a fraction of the revenue you can expect to generate from that merchant. Over time, you can upgrade technology and sell additional services that will increase your monthly recurring revenue (MRR) stream.
3. More referrals.
SMB merchants who are completely satisfied with the solutions and services you provide are more likely to recommend you as a trusted merchant services provider to other contacts in their network. That’s good news for your portfolio.
Solutions to suggest to SMBs.
After the challenges of the pandemic, economic shutdowns, and adapting to evolving consumer behaviors, SMB merchants are looking for guidance on payment technology solutions that will deliver the greatest return on investment (ROI). However, given the challenges they’ve had to face of late, SMB merchants may not have much excess capital to invest at this time. Depending on your merchants and their needs, consider offering the following solutions.
An SMB merchant who has been using an ECR and non-integrated payment solution may be struggling to provide the point of sale (POS) experiences that today’s consumers expect. A smart terminal can enable them to accept EMV, magstripe, and NFC contactless payments, while furnishing them with additional functionality that helps them streamline their business. Smart terminals can also enable receipt printing, connect to a barcode scanner or cash drawer, and operate via a wifi or 4G connection. At an affordable monthly price, a smart terminal may be all the functionality your client needs at a lower price point than a full POS system.
Next Day or Same Day Funding.
SMB merchants may hesitate to accept card-present credit card payments due to the lapse in time from the transaction until funds are deposited into their accounts. Next Day or Same Day Funding may be the answer to maintain the cash flow they’re looking for. In the current climate, Next Day or Same Day Funding can reassure business owners that revenue from their sales will be available faster so that they can cover accounts payable, payroll, and other operating expenses.
Cash Discount Program solutions.
Some of your current merchants and prospects may be struggling to keep their heads above water. They may be worried about more than cash flow when a greater percentage of customers are making credit card payments rather than handling cash during the pandemic. They may also be concerned that they’ll operate less profitably due to payment processing fees if they accept credit cards. By offering merchants a Cash Discount Program, they can allay these fears by helping them offer customers who pay with cash a discount. Selling this solution along with POS hardware can give merchants the ability to accept credit card payments without increasing their operating costs.
Ecommerce and alternatives to contactless payments.
Brick-and-mortar-only small to mid-sized business owners may be planning to build an online presence to cater to consumers who are either continuing to socially distance, or have simply come to enjoy the convenience of shopping online. Provide your current merchants and prospects with a solution that allows them to manage payments made through all channels from a single platform.
Additionally, merchants who can accept payments online may also want to consider QR code payments for in-person transactions to provide touchless experiences for health-safety-conscious customers.
Depending on the type of products or services your SMB merchant sells, they may benefit from offering their customers the option of setting up automatic recurring payments. This can help merchants minimize the time and resources they spend on collections, while maximizing their recurring revenue streams.
Evolve from a merchant services provider to a trusted business advisor.
In a climate of rapid and continual change where businesses are operating in a wide range of ways, there’s no single solution that will meet the needs of every one of your merchants. That means that selling a high-margin package may work in some situations but not in others. Committing to providing your merchants with exactly what they need, however, will pay off over time with MRR and new solution and service sales. By being more than just a merchant services provider who sells payments hardware, you’ll create longer-lasting relationships. In the end, that’s the smarter strategy for your business.