|January 3rd, 2019|
Did you know that certain reasons restrict a merchant services program from expanding? If you don’t, take out a few minutes and roll your eyes over the four major reasons behind declining or stagnant merchant services program.
1. Low Merchant Retention
70% is the annual merchant retention of the industry on an average. Having said that, if there are a total of 300 merchants on the portfolio on the first day of the year, there would be only 210 merchants in the portfolio on the last day of the year. This clears that more than 7 new merchants have to be signed up every month to ensure the portfolio remains flat.
As keeping a present customer is way easy than finding a new, it is great to use every strategy possible to increase the retention percentage beyond the industry average. For this, nothing could be better than adding a personal touch by assuring that the bank staff is always at the service of the merchant. This means associating with a processor that understands philosophy of the bank and gives top priority to customer support. Doing so will increase the customer retention to 90% or even more. At this much retention, only 2 to 3 new merchants have to be signed up every month to keep the portfolio flat. Believe it or not but this makes incredible impact.
2. Out-of-Place Growth Strategies
A number of things are available to be implemented to result in growth in merchant services program. Some of these things are:
3.) Lack of Support from Existing Processor’s End
If support from the processor is not equivalent to the bank’s standard, bank employees don’t send new referrals. This is because bank employees do not refer their loyal bank customers when processors are not cooperative, as this may put their relationship with the customers on stake. For these important reasons, it is important to ensure that the processing partner follows the same culture as well as values as the bank.
While going through the due diligence process with merchant services providers, one good way is calling the help desk numbers from their website to know how the way customers are treated. Important questions to ask from the valuable processors are:
4.) Lack of Focus on Merchant Services
Merchant services have emerged as an afterthought to bank employees and are only taken into account when information is requested by a customer. Never ever are merchant services provided proactively. This can be settled by having a stable upper management that emphasizes on the value of merchant services.
When merchant services goals are put in place for officers & branches and merchant services are rolled up to one individual who holds ownership for portfolio growth, tremendous success is assured. It is this person only who is responsible and concentrates on the expansion for the portfolio.