In my last blog post, I shared how Clearent recently participated in the Keynote Breakout Session at the SEAA Annual Conference. Phil Ricci, Clearent’s Vice President of Sales Operations, did a great job speaking to how changes in the industry are opening up new doors for sales professionals selling Cash Discounting and Surcharging programs.
These programs are getting lots of attention because they’re helping business owners and sales professionals thrive. For example, reps who sell Cash Discounting and Surcharging programs like Clearent’s Empower Program are making 5 times greater residuals in comparison to what they make when selling a traditional merchant account. There’s also a huge benefit for merchants in terms of cost savings. When merchants share their processing fees with their customers, they can reduce their processing costs by 75%-95%. This creates real opportunities for business owners to reinvest into their business and watch it thrive.
Focusing Your Sales Efforts
If you want to be successful selling Cash Discounting and Surcharging, the key is to focus on verticals such as retail, restaurants and service-based industries. Auto body repair shops, landscapers, contractors and other field services providers are also a natural fit for these programs, as are professional services like law firms, accountants and more. This is because they typically quote their prices on an invoice, making it very easy to list the credit card price right next to the cash price.
Charities and non-profits are another growing vertical because the person making the donation generally won’t mind covering the processing costs in order to further support their favorite charity or organization.
Overcoming Merchant Objections
The most common objection around Cash Discounting and Surcharging is that merchants don’t want to be the first business to roll out one of these programs. They’re afraid they will lose customers, but time and time again research proves this is not the case. This is because consumers are used to paying for the convenience of using a credit card. Whether they’re paying a utility bill online or have to pay to check their baggage on a flight, these types of fees have become commonplace.
Another strategy is to get a group of merchants to roll out the program at the same time. This could be a group of restaurants or group of different types of merchants that are located in the same area. This way there’s strength in numbers, and it becomes more about merchants not wanting to be left behind versus standing out.
Establishing a Pricing Strategy
This leads to an important point about pricing. You can’t go into a marketplace without a pricing strategy. If you treat these programs like every other pricing model where each merchant gets their own price, you will be setting yourself up for failure. It’s critical that you pick a market price and stick with it. Make sure that all merchants with a similar average ticket are priced the same and agree to a non-cash adjustment or surcharge of 3.99%, for example. Consumers will see the signage when they visit different merchants, so this way you can ensure a unified customer experience, which will greatly contribute to the overall success of the program.
The Importance of Merchant Training
Ensuring a merchant’s long-term success with Cash Discounting and Surcharging requires that sales reps go above and beyond selling a credit card processing account. Now more than ever, it’s critical that you focus on being a trusted advisor who works with the merchant to build a strategy and shows them how the industry works.
Remember, you are the merchant’s advocate. It’s your responsibility to make sure they’re following the programs correctly, from displaying signage to registering with the card brands if they decide to impose a surcharge. “It’s less about trying to sell it, and more about actually teaching what it’s really about,” said Ricci. Training should not stop with the business owner though. It’s key that all employees know how to speak about the program and properly explain the process at checkout. This is why Clearent provides extensive training for Cash Discounting and Surcharging merchants, including videos.
I’d like to leave you with one final thought. Keep in mind that not all Cash Discount and Surcharging programs are created equal. That’s why you need a partner who is leading the industry, not just following the trends. Contact us and we’ll show you how you can make more money and partner with a company that’s focused on compliance.