Attention ISOs and Processors, you may want to listen up to this one. There was recently a post in an industry forum asking a very similar question. The topic and the responses intrigued me. I started thinking of my own personal experience in this industry and asking those that I respect about their experience as it relates to why they changed ISOs or Processors. Many of the reasons were surprisingly simple, yet surprisingly ignored by many that are trying to woo salespeople.
First let's talk about how much money a merchant contract is worth. Anywhere between 10-30 times it's average monthly recurring profit depending on the: who, what, when, where and how of the sale. Therefore its logical to assume that a productive sales agent that is bringing in a steady flow of new accounts would have a cash value to the company. Lentos use an economic term and say the agents value can be determined as their Future value to the company. Now as we all know most ISOs and Processors invest a tremendous amount of money trying to woo talented salespeople to their organizations. They employ recruiters and run ads in trade magazines. Look through most ads and see they are primarily focused on higher percentages for agents, free this or that, bonus for this or that, upfront buyouts. This may be what brings new people, but based on my experience and research, its sure not what keeps them. Now that weave established that salespeople add value to an organization that is greater than any single customer, lenTos look at retention. I doubt anyone would disagree with the fact that itS far less expensive to keep a customer than to replace that customer. Ovex seen consistent estimates over my career that say it costs 5-15 times more to replace than to retain existing customers.
The same theory holds true for agents. Many people surely don't think this is so because many agents feel that after the recruitment phase, ISOs/Processors really donUt give agents the same level of support anymore. If you're like me, you continue to run into little issues that make you feel as though they may not value your business at all.
Now in asking the question of why salespeople leave, first on the list was almost always; residuals not paid on time and or incorrect/incomplete residual reporting. Its true that fear motivates people much more than greed and it seems that fear of not getting paid or of having to baby sit residuals is greater than the greed to get paid more.
Second on the list is a variety of unkept promises. Hey, the recruiters job is to get salespeople on board so a lot of expectations set during the recruitment process donUt end up materializing.
I believe this leads to a feeling of betrayal or no confidence on the part of the sales partner that prompts curiosity to look elsewhere.
The next reason was that ISOs/ Processors compete directly with its sales partners or cross market to the sales partners merchants for other products or referrals. I heard many stories, and have experienced myself, of an ISO putting marketing stuffers in a merchant statement selling something else. This something else was not something the sales partner was involved with nor paid for it.
Often an ISO sells new equipment to customers calling their help desk.
Another BIG response that came up, and is closely associated with the first three, (residuals, unkept promises, direct competition) is trust. No matter what any two parties discuss at the beginning of a relationship they are going to run into issues that need to be dealt with. Quick and fair resolution of these issues tends to build trust while surprises and drawn out analysis (nickel & diming) detract from that trust. An example would be learning from your merchant that your ISO sold them a new terminal or took a referral from them and sold it directly. Now I'm personally a big fan of competition so long as itS fair and both parties understand the game.
Which leads to the next issue on the list and that was communication. With all sales partners communication ranked high. As we all know without clear regular communication you donUt feel like part of the team. You donUt feel like a trusted partner and little problems tend to grow into BIG problems. Getting a quick and clear response to an issue or question builds trust and satisfaction.
Training was on the list consistently, but was not a real big issue with most of the people I spoke with because most of us a have a pretty good idea of what were doing. However, it needs to be on the list because there are some newbies out there who do not know the industry and it changes at such a fast pace we all need to constantly learn and adjust. Even people with many years of experience.
An item on the list that should have been a given is a very important reason for leaving. Those were the speed and correctness of approving an application and building a download. My experience has shown me that the people that recruit you will almost always present a brighter interpretation than the reality.
The last super important reason was support and help desk. Most of the people I work with really care about their merchants and want them to be serviced. Whether itS a direct call from the merchant or a call from the sales partner to resolve an issue, time is money for all but much more so for the sales partner. If the sales partner is not producing, they are not going to be earning the money they could.
Oh weatherize, as always, was on everyone list but near the bottom. So long as itS competitive pricing from the beginning, pricing is near the bottom of everyone list. The only people that I spoke with or know that have left because of price were because they had a real unfair deal to begin with. For example an agent of an agent that was only getting a very small percentage of the equipment revenue. Finding out your ISO charges you $400 for something that you can get directly for $200 is like a slap in the face. Most pricing issues really are trust issues. I personally donUt know of any agent who was perfectly happy with trust, communication, training, residuals and then left for a few pennies or a free terminal.
So for sales partners you may want to consider these points for your next negotiation with a new ISO. For ISOs you may want to calculate what a sales partner is worth to you vs. recruiting a new partner, and invest some of that recruitment money into agent support and your helpdesk. Last, my philosophy of Under promise and over deliver tends to lead to longer-term relationships. With that said I'd love to hear readers thoughts and write more on this topic, so feel free to email or call with your input!
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