If you still have a broad approach to finding new merchants, you may find that you are losing to competitors who have carved out a particular niche. I recommend that you take a step back and think about a way to differentiate your service from others in your market.
Earlier this week, I spoke to many ISOs at the Southeast Acquirers’ Association (SEAA) 2011 Annual Conference in Weston, FL. I was struck by the fact that the majority of these ISOs no longer think of themselves as a general merchant services provider. They focus on a niche and offer a unique solution to help them successfully target a specific segment of merchants.
What exactly is a niche? Merriam-Webster defines a niche as “a place, employment, status, or activity for which a person or thing is best fitted” or “a specialized market.” I like to think of it as focusing on something that you do very well – better than your competitors – rather than trying to be all things to everyone.
What are examples of niches for an ISO? Let me start with some examples I heard at the SEAA this week. One gentleman is starting a new ISO that is focused on point-of-sale solutions. He plans to help merchants find the right software and/or hardware to best meet their needs, and the merchant account will come along with it. Another ISO decided to create its own loyalty program to use as the lead for acquiring new merchants and to help with retention as well. A third ISO focuses on companies who create POS and other software for merchants so he can hook his merchant services into their software.
While each of these approaches is different, they all have one thing in common: they focus on a niche rather than taking a shotgun approach to the market. Given the highly competitive nature of our business, their approach makes perfect sense to me.
How can you find your own niche as a merchant services provider? Here are some general examples to consider:
- Specific merchants (e.g., doctor’s offices, contractors, auto dealers, e-commerce)
- Products (e.g., gift cards, devices for mobile payments, plug-in for QuickBooks)
- Geography (e.g., new communities, smaller towns with fewer competitors)
- Culture (e.g., Spanish-speaking merchants, your local “China town”)
To help identify a niche that fits you best, ask yourself these questions:
- Which merchants give me the most referrals?
- What do I receive the most compliments about?
- What am I particularly good at?
- Which types of merchants or products get me the most excited?
Take some time to think about potential niches. Chances are it can help you be more efficient in finding leads, closing leads, and keeping your merchants with you.
Have you tried to focus on a particular niche? Tell us about it.