There have been many times that I was able to close a merchant services sale “on the spot” or at the first meeting I had with the merchant. Today, I wanted to give you some tips on when and how to close on the spot. If you are just starting out and you go to a lot of small volume businesses you will find this article very useful. Even if you are trying to sell more complex technology solutions, it can be helpful to close the merchant services account on the first visit so you create some cash flow and establish a deeper relationship with the client that will lead to more advanced solutions. Here are some tips for closing sales on the spot.
Before I get into these tips, let me just share something for the new sales partner who is nervous about getting started. You don’t need to close sales on the spot. The majority of the sales I made were not closed on the spot and most of our new sales partners simply get a copy of a credit card processing statement, send that in to get a free cost analysis done and then go back to present this to the merchant. If you are on our sales team we have sales coaches and training to help you get the confidence you need.
This is a tough one, as I mentioned above, my general philosophy is that when you go to the first appointment your goal is to get the statement and that’s it. However, like most rules, there are some exceptions to this one.
-If the merchant has never processed credit cards before. In this case, there is obviously no statement to get and I always try to close these on the spot.
-If the merchant pays less than $100 in total fees or does less than $5,000 per month in revenue. In these cases a delay of several days will only draw attention to the fact that a $20.00 savings wasn’t worth the wait. Also, the only way you are going to get these sales is by bargaining on the fixed costs, like machine rentals, monthly fees, non-pci compliance, etc. and you can look at all those without an analysis.
-If the merchant wants to buy. If you are really out selling full time, you are going to run across someone, at least once every couple weeks, that hates their current provider and they are ready to switch, don’t delay the process, get them switched today!
2. Doing an “on the spot” analysis.
You need to have some numbers to work with in order to make your case, but you really only need a few. Here are some tips on doing a very basic analysis on the spot by simply writing it out on the current processing statement.
-Start by opening up the statement and taking a look at it. If it is too confusing for you, immediately back track and say, “Would you mind if I took this back to my office to do a full cost analysis? How about we meet in a couple days?”
-If it is on simple Tier pricing and you can understand the statement, look at the very bottom or last page for the monthly fixed fees. These will be fixed dollar amounts like $5.00, $10.00 or $25.00.
-Ask them about their equipment, do they rent, buy or lease? If they rent, you can save them money on that as well, if they lease, point out that this may not have been their best option and they shouldn’t continue to reward the person who sold them a bad lease.
-Now, all you need to do is figure two fees quickly. ***If the merchant doesn’t currently accept cards, you would start at this step*** First take the total processing volume (or estimated total processing volume if they are not taking cards) and multiply it by 2.3% for large ticket (over $100 per sale) and 2.7% for small ticket (under $40.00 per sale) or use something in between for mid-size ticket ($41 to $99 per sale). This will give you a quick estimate on what our total fees would be for their account using our minimum pricing guidelines. (If you are not on our team, get 10 current statements from our current processor and analyze their effective rate or the percentage of their total processing volume that is going to fees.
-So if they are a small ticket size business and they did $3,400 in revenue, take $3,400 x 2.7% = $92.00 Once you have this number subtract it from what they paid with their current company and multiply it by 12. So in the example above, if they paid $115.00, I would take $115.00 – $92.00 = $23 x 12 = $276 and say, “Based on the fixed costs we looked at and our average fees for your type of business, we will cut your costs by about $275.00 per year, the more revenue you do the more we will save you, but you will save roughly $275 per year if you keep doing what you did on this statement.” I also like to figure the percentage savings on small volume accounts so I could add in…”That is a savings of roughly 20%.”
***Side tip: If they seem easy going and you can tell they have been there for a while, highlight your local approach to business. After you get done pitching the price say, “Not only would you be saving money, but most of my clients are very interested in supporting the local small business community and like I said, my business is based right here in X City, so if you need anything at all, you could just give me a call and I will be able to come right over, I’m sure customer support and the small business community is important to you, right?”
At this point you have shown them the savings, now it is time to close the deal. Use the paperwork to close the deal. Don’t use any corny lines, small business owners will smell a close coming a mile away. Just reach for your notebook and take out the paperwork. Start going through the fee section and explain each one and let them know which ones will effect them and in what way. When you get done ask, “Does that all make sense?” If they say, “Yes” you say, “Is there any other questions you have for me?” If they say, “Not Really” go back to page 1 and say, “Ok, great, now is this a sole proprietorship or a corporation?”, “What is the corporate name?”, etc. etc. and fill out page one and then have them initial. If they are nervous about buying today, they will let you know at some point, and if they do, back up and find out if there are any questions they have and if you feel like you are losing them, simply reschedule for another time.
I hope that helps you close some deals on the spot.
Have a great weekend!
James Shepherd
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