ETA Expert Insights: Sales Education Guide for B2B/G
John Barrett, SEVP, Global ISO Sales, Payroc and Patrick Gallagher, ETA CPP and CEO, Reliable Payments
This article is part of a series by the ETA Payment Sales & Strategy Committee
B2B/G payment processing is one of the fastest-growing yet potentially complex verticals in the merchant services industry. While this vertical can be very profitable, the average sales cycle can be significantly longer than the typical retail or restaurant pitch.
Successful B2B/G sales representatives will need to be proficient in door pulling and phone calls and the ability to get past gatekeepers. In many, if not most B2B opportunities, sales reps will need to successfully bypass receptionists and admins before getting an audience with the decision-makers. The beauty of this is that once you close this type of deal, it is equally challenging for your competition to get in the door.
In addition to advanced sales tactics, reps should be knowledgeable in interchange optimization. This topic will allow a sales rep to speak with a level of expertise that the average ISA may not take the time to master. Setting yourself apart and genuinely understanding the additional savings available by introducing Interchange Optimization (IO), or Level II and III processing, will significantly increase your success in this vertical. Often, one will find that the sales process highlights savings far more significant on the IO side than could ever be seen in the basis points, allowing margins to stay the same or even increase while still showing significant merchant savings.
Lastly, the needs of B2B/G merchants often include much more than a standalone terminal, allowing reps to focus on value sales, not just on price!
TECHNOLOGY
Technology needs in this vertical are vast and can be complex, but certainly not as complex as full-on integrations, etc., in most cases. To maximize the benefits of B2B/G processing, sales reps will often need access and expertise in selling a virtual terminal that can process Interchange Optimization (IO), particularly Level II and III transactions. While some processors have their technology that allows for this, plenty of worthy independent, third-party technologies integrate with most major processors. They are not cost-prohibitive for independent reps or large organizations to offer their prospects.
While IO is the most critical aspect of selling payments in the B2B/G sector, successful representatives want agents to know about a few other features many merchants will need to utilize. Frequently, B2B/G merchants will need some/all of the features: secured customer vaults, recurring payments, scheduled payments, batch uploads, transaction history, the ability to add discretionary data fields, hosted payment pages, transparent reporting, card-present capabilities, invoicing, text-to-pay, etc. While this list the most common needs, others specific to merchants often come up. Finding a technology that allows a merchant access to these features in one tool puts a rep at a significant advantage. Omni-channel solutions are critical to success in the B2B/G vertical.
RISK
From an Underwriting view, B2B/G processing presents the usual risk factors are going to apply that would apply to a large volume CNP environment. Most of the transactions in this environment will be MOTO or CNP, which has a slightly higher degree of risk, especially when the volumes are so large, as is the case in many of these opportunities. Other factors to consider include the typical high average ticket associated with these business types and the potential substantial ticket that needs to be identified for underwriting. The financial strength of the business needs to be able to support the volume and high tickets. Be prepared to provide extra risk underwriting information such as previous statements, two years of financial data, potential PG requirements, etc.
However, unless the industry they are focused on is a high-risk vertical, in most cases, the B2B/G prospect will be considered low risk for the business type. It would not be a credit issue in most cases, especially for Government, but would be mostly a business type of risk decision. Because it is B2B, it won’t pass if it is still in a high risk or prohibited category determined by the processor. Even if not in a high or moderate risk vertical, it will raise a flag with underwriters if the product is a future delivery or customized product. The concern is chargebacks, so showing any good chargeback history would be helpful.
One critical insight here is that with B2B/G, because of the size and nature of the business, you should have a good communication process and business relationship with the underwriting group of the processor you are working with. In many cases, it may need discussion to understand the business and how it operates. Talking it out with the underwriting group often clears up any misconceptions.
STRATEGY
Selling in the B2B/G space is more complex but can be more rewarding. As noted above, the revenue opportunity in this space is much more significant, and the retention of the merchant is much greater and longer. Also, once established in the area with a few merchants, you have a sound basis for expanding opportunities in that particular vertical or type of B2B, with references and since you have passed many of the initial hurdles. The downside of this space is the sales cycle’s length, the organization’s complexity to work through for the sale, and the additional knowledge you would need to succeed in this space.
As a starter, it would be wise to identify potential targets. Use some of your existing retail merchants to find out who supplies them with their goods/products… those are the wholesalers/manufacturers and B2B businesses. Or, pick a particular industry you are familiar with or like and research who the players are in that industry, from the manufacturer down to the consumer. You will find several levels where there are good B2B prospects. Plus, you gain the expertise in that vertical on their hot buttons and need to become an expert.
Selling the B2B space requires that you understand the buying structure of the business, the key players (gatekeepers, influencers, Decision makers, etc.), and the buying process. Many of these will go through an RFP process, so having an excellent ability to deal with RFPs is essential. A good relationship with the key players is also important to help influence the RFP. Selling in the government space is a different animal and will almost always be an RFP process. So, connections and insight help in that market. The other thing the B2B space requires is the ability to provide the technology and the knowledge of the solutions like Interchange Optimization, Recurring payments, Invoicing, etc. Ensure you are working with a processor/ISO that can provide that technology with its gateways, terminals, and integration capabilities. Learn the solutions needed so that you become an expert and a consultant when selling in this space. This will also help you with your needs assessment and questions portion of the sales cycle.
Selling in the B2B/G space is a great business strategy, but it is not one to dabble in. It is too complex and time-consuming to try to do this as it comes. If your business plan to grow your business includes B2B/G sales, then narrow the focus to a few key target markets, spend the time to learn that market, know your stuff, and be dedicated to the sale despite the length. It will pay off in the end!
This article is part of the ETA Payment Sales & Strategy Committee’s “Sales Education Guide” for individuals and companies as they explore other specific processing verticals. The guide includes high-level discussions on selling into various verticals and is written by professionals actively working in the payments space.