The walk down the hallway led to a door, opening into a massive warehouse-like facility. Standing in the middle of the room were these machines, on what seemed like hydraulic stilts. I crossed the steel bridge to enter the belly of the beast that would be my home for the next two days. I had prepared with “Ground School” training to make friends with my new foe. But would I be able to master what I had learned; would I be able to fly the Airbus A320? Well, not actually the real plane but a very expensive, level D flight simulator at the Jet Blue University in Orlando Florida. I was here to see if I could learn to fly an airplane millions of passengers before me had flown in. I would be trained by the best, Captain Wayne Phillips, a seasoned professional who had a great way of making the complicated sound easy.
As I waited for my session, parades of other pilots entered the facility to receive their training too. There were pilots there to switch aircraft type and some that were new to the airline, but the vast majority were coming back for recurrency training. This is where pilots re-learn and are put through their paces every 12 months to make sure they still have what it takes to successfully fly the plane. Each pilot receives training from a professional instructor, and the pilot must pass before they can return to work. All of this got me thinking!
Our profession of Sales is quite different. And in the world of the Independent Sales Agent (ISO), it is as far from the airline pilot world as you can get. Imagine if an airline took the belief that once you got your pilot's license, you were good to go. “Mr. Pilot, you are good to go, you learned to fly 20 years ago, just keep doing what you are doing.” Independent Sales Organizations have to address the reality of learning. It should never stop, because when it does you stop growing. By nature, the ISO’s are accustomed to calling their own shots and doing it their way. That has worked very well for the longest time and particularly in the Business to Consumer (B2C) space. There was an abundance of opportunity to keep the average ISO selling. Even with the “Race to Zero” if you had enough activity you could make up for shrinking margins by signing a few more accounts to your book.
Then, unfortunately, the plague of our generation arrived, Covid-19. The ships that had been up to that point sailing smoothly, began to take on water. Businesses closed, leases lapsed, transaction counts fell, and residuals plummeted. The abundant opportunity ground to a halt, the game shifted. The new challenge is Business to Business, (B2B). Unlike B2C, B2B has been less affected from a payment’s perspective. By some accounts, it is a $24 Trillion opportunity, with only 8% of B2B payments currently on plastic. That in itself represents an amazing opportunity for the ISO Community. Driving to capture this market is a whole host of “FinTech” companies, who essentially are positioning themselves as the new “Terminal Providers” with software to digitize the B2B payments for companies.
With as many as 30.2 million small businesses in the US, the opportunity to sell in this space has never been greater. Yet it comes with some perils. Selling into this B2B space with the same tried and trusted techniques of the B2C world will certainly meet with failure and wasted effort. Why? Because Credit payments are considered the costliest of all payment types like ACH, Check & Wire. Saving a B2B organization a penny or 2 when they already think 2.5% to 3% is too much, will lead to credit being suppressed as a form of payment and capping out your account. Price is not a value lever, and if you are relying on Level III to save the day, think again.
B2B requires a different approach, which in turn requires the ISO to take a drastically different path. It requires the ISO to do something his friend the pilot has known for a long time, that training is the shortest path to success. This may be a hard pill to swallow for many ISO’s, as you are a fiercely independent group. The key will be to avoid insanity, you know, doing the same thing, over and over again, and expecting a different result. There are alternatives that can bring you in for a smooth landing, because just like the pilot, nobody wants to crash and burn.
Roger McNamara Bio:
Roger is a 25+-year veteran of the Payments Industry, most recently as the Director of Business Development with American Express in the US. He has worked on the largest Acquisition targets for acceptance across multiple industries and across the globe that include: Airlines, Communications, Technology, Cruise Lines, Entertainment, Fractional Jet, Freight, Government, Healthcare, Insurance, Oil & Gas, Residential Rent, Restaurants, QSR’s, Retail, Services, Supermarkets, Travel, Vehicle Sales, B2B and Wholesale. Over that time, he has sold more than $300 Billion worth of Card processing and became an expert in Bankcard Interchange and Discount Rates, how they are calculated and what merchants pay to accept Credit, and how this is dramatically different from what they believe they pay. He is an expert in Merchant Statement analysis and payment processing and the rules and regulations associated with payments and associations. Roger has also developed the insight for Merchant Services Salesforces and salesforces, in general, to be able to better position their products and gain share, particularly in B2B. Let him show you how you can too. He can be reached at roger@guide2interchange.com.