The most damaging thing you can do to your merchant portfolio is not activating your merchants quickly and correctly. In a post entitled 7 Tips to Install a Credit Card Machine in Half the Time, I provide some tips about the install process and how to make it a smooth transition for your merchant but unfortunately, many merchant sales people procrastinate the install process.
This is very damaging to your merchant relationships because not only do they experience buyers remorse, there are also 3 specific issues that delaying activation can cause that will harm your portfolio and kill your cash flow as a merchant sales rep, right when you are trying to get started!
#3 – Clawbacks / Buybacks. Whatever you call them, every processor has them and they will eat up your cash flow. For most processors, if you do not have the merchant account activated within 60 days, meaning they are processing a certain amount of credit card volume, the processor will take back the up front “Approval Bonus” that was paid to you. Don’t get caught in this trap! When you make a sale, get it activated quickly.
#2 – Residuals. If you want your residuals to build, you need your merchants to process. If you are waiting 30 to 60 days on average to get your merchants processing, you are delaying your own income by that amount of time. You will be pleasantly surprised at how quickly your residuals will grow if you get your merchants processing quickly.
#1 – Inactive Fees / Attrition. One thing I have learned is that the majority of cancellations and attrition for a merchant sales rep happen due to inactive fees and buyers remorse. Most processors have monthly minimums, statement fees and other fees that are charged to a merchant regardless of their processing volume. Even if they don’t process anything, they will probably get charged $30 or more depending on your processor. I have found that these fees will erode trust. They don’t make sense to the merchant and they feel you scammed them by charging them for nothing. Get the terminal installed quickly so when they get their first batch of fees, they are already using the new processor.
I know what it feels like to need that next sale, that next commission check but take the extra time to ensure that your last sale gets installed quickly and correctly the first time so you can truly move on to make your next sale, and perhaps even obtain a letter of recommendation to help you grow your portfolio.
Have a great day in the field!
James Shepherd
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