Are you stuck selling and marketing to the same hyper-competitive merchant categories? Are you thinking out of the box and testing unique marketing strategies that your competitors aren’t? As this industry matures, new innovative strategies and tactics need to be deployed in order to attract, qualify and convert more merchants, the status quo will not get the job done anymore.
    If you’re not getting the results you want, consider creating multiple distribution channels. What do I mean by distribution channels? Distribution channels are independent avenues that facilitate the sale of your products and services. Think about how merchant services are traditionally brought to market; banks contract ISOs who in turn contract independent sales agents to sell their wares. In essence an independent agent is a distribution channel for the ISO. Another example on an industry that relies on multiple distribution partners are software companies, they use VARs (value- added resellers) to sell, install, train and maintain their product offerings. The majority of B2B companies utilize multiple distribution or indirect sales channels.
    Implemented correctly, a new independent distribution channel can be a powerful sales driver for your company. What’s attractive about creating an indirect sales channel? This model is attractive because it can quickly impact the bottom line while keeping selling expenses to a minimum, and in most cases the product is complementary to what your distribution partner is already offering to their existing client base.
    Let’s take a look at five steps to landing and empowering a new distribution channel:

• Identify Natural Partners
• Develop Their Role in the Process
• Set Clear Expectations
• Develop and Deliver Training
• Create a Sales Support System

     Identify Natural Partners

    The most important step in the process is identifying the best potential partners. Ideally you are looking for people selling, recommending or serving your target merchant. For example, if your target merchant category is custom furniture retail outlets, you would want to research and approach those potential partners specializing in that market. How do you find them? Look for trade associations, publications, wholesalers, trade shows, local chapters or experts in the field. Identify key players in the industry that would be a good match. Some examples might be consultants, software companies, marketing companies, equipment vendors, trade groups, etc.

     Develop Their Role in the Process

    Depending on the type of distribution partner, they will naturally have different roles in the sales process. Determine whether they will be doing the actual selling and appropriate paperwork or will they just be referring a warm lead to close. Use a common sense approach, if they are currently not meeting face to face with your key target and don’t have a large sales force it may be better for you to work the entire sales process. Keep this in mind when developing a compensation program. A good rule of thumb is the more they do—the more they make.

     Set Clear Expectations

    To ensure a successful relationship both parties must have a clear understanding of what is expected, clearly define in your agreement and articulate what you expect of them and what they can expect from your company. Also set clearly defined sales goals and targets, this will give you a yard stick to measure whether the arrangement is a success.

     Develop and Deliver Training

    The roles assigned to each participant will drive training development. As you well know, our industry can be fairly complex with underwriting guidelines, risk management, security concerns and the merchant boarding process. A key factor that will determine success is whether your new distribution partner and their team are trained thoroughly. Make sure you develop a comprehensive program that meets all their needs and is easy to implement. Training is the key, many new partnerships look great on paper but if you can’t mobilize the sales force it will never gain flight. Partners need to have confidence in their ability to explain and sell your products.

     Create a Sales Support System

    Another key component is sales support. Put a system in place that allows for new distribution partners to access sales support material, this can be accomplished by developing an easy to navigate website that provides all the necessary documentation and marketing material. If you are a small organization and don’t have the resources to support a large sales network train one of their key employees to be the first point of contact. Give them the tools to be successful, do it right the first time and you’ll be rewarded with fewer support calls and increased sales.
    Distribution channels are an attractive flexible way for companies to develop new markets and additional revenue. Synergistic relationships come in all shapes and sizes, but the best relationships and partnerships are the ones that benefit everyone. Focus on creating win/win distribution programs and you are well on your way to growing your merchant portfolio.
    Have a great month!

Marc Beauchamp is a consultant and trainer for the Financial Services Industry. He is co-author of “How to Survive and Thrive in the Merchant Services Industry” and offers a free monthly newsletter at his site www.surviveandthrive.biz. He can be reached by email at marcb@surviveandthrive.biz.