08 May 4 Reasons Your Merchant Services Program Isn’t Growing
The banking team at BASYS enjoys meeting with financial institutions across the country. We learn about all different merchant services programs, including what’s working, and what’s not.
Here are the top 4 reasons we see that cause a merchant services program to be stagnant or declining.
1.) Merchant Retention is Low
The industry average for merchant retention is 70% annually. That means if you have 300 merchants in your portfolio on January 1, unless you are better than the industry average, you will only have 210 merchants in your portfolio on December 31. So, you will need to sign up more than 7 new merchants per month just to keep your portfolio flat.
Keeping a current customer is 10 times easier that finding a new one, so your best bet is implementing everything possible to increase your retention percentage above the industry average. This can include adding a personal touch by having staff at the bank dedicated to merchant support. It could mean partnering with a processor that mirrors your bank’s philosophy of service and places customer support as a high priority. By doing this, you can increase your customer retention to 90% or more. At 90% retention, you only have to sign up 2 or 3 new merchants per month to keep your portfolio flat. This makes a tremendous impact.
2.) Growth Strategies Not in Place
There are several things that can be implemented to create growth in your merchant services program. These include:
- ACH mining of your business customers to identify your top prospects
- Bank employee training
- Marketing campaigns to potential merchants
- Lead generation incentive programs for bank employees
- discussion with new business accounts
These programs are among the many that are part of the strategy discussions BASYS has with all our partner banks.
3.) Low Support from Existing Processor
If the support from your processor does not match your bank’s standard, bank employees will stop sending in new referrals. It’s not worth it for bank employees to refer their loyal bank customers and risk having the processor taint the relationship. This can be remedied by making sure your processing partner has the same culture and values as your bank.
When you are going through the due diligence process with merchant services providers, call the help desk numbers from their website so that you can experience yourself how your customers would be treated. Ask potential processors:
- What’s your annual customer retention rate?
- What metrics are you tracking to increase customer retention?
4.) Lack of Focus on Merchant Services
In these instances, merchant services has become an afterthought to bank employees. It is only discussed when a customer requests information. Merchant services is never offered proactively. This can be fixed by upper management placing an emphasis on the importance of merchant services.
We have seen great success with putting merchant services goals in place for branches & officers, and having merchant services roll up to one person within the bank who has ownership for growth of the portfolio. This person is held accountable, and keeps a focus on growth for the portfolio.
About BASYS Processing
BASYS Processing provides credit card and debit card processing services, and solutions that include terminals, virtual terminals, e-commerce, mobile, and point-of-sale; customized to fit any need. Banks, associations, and software partners depend on us to strengthen their reputations and relationships with their customers by providing remarkable service paired with ultimate flexibility and pricing. Merchants depend on us to make accepting credit cards and debit cards convenient, safe & affordable. BASYS was founded in 2002 on one philosophy: to take care of our merchants, partners, and employees so they never want to leave. We are dedicated to working one-on-one with our customers to design the perfect solution. BASYS is Personalized Payment Processing.
Learn more at basyspro.com, and connect with us online at: