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Best Practices: Merchant Retention |
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While a modest economic recovery appears to be underway among merchants, merchant attrition remains a concern for many companies in the acquiring industry. Effective merchant retention strategies and best practices are an important and cost-effective tool to minimize attrition and stabilize portfolios.
The Best Practices Committee has researched and published this White Paper to indentify some of the causes of avoidable merchant attrition and highlight industry best practices that target merchant retention.
Attrition and It’s Causes
Some merchant attrition is unavoidable, caused by an economic downturn, shifts in consumer preferences or poor business management on the part of merchants. Avoidable merchant attrition, on the other hand, is related directly to the relationship between merchant and acquirer. In the latter instances, the leading causes of attrition are customer service issues and price.
Addressing Attrition Before It’s Too Late
At the strategic level, the key to effective merchant retention is to identify potential portfolio defections before the merchant actually switches service providers. It’s often easy to see the signs of a discontented merchant after the fact. Noticing these signs – and taking effective action before the merchant takes his business elsewhere – requires a sensitive set of alarm bells and a willingness to listen to what they are saying.
Improving Your Merchant Retention Efforts
Prevention is the best way to address attrition. Communicating effectively and often with customers is the best way to identify and remove issues that may one day convince a valuable merchant to take his business to a competitor.
Differentiating your company and its offerings from competitors also is an effective way to create customer loyalty, particularly if your goals is to maintain margins without increasing customer churn.
A well-trained sales force, one which knows your products and services and communicates your policies and practices clearly and accurately, is another important factor in preventing attrition. The sales force also is key to identifying potential problems before they become acute. The same emphasis on training for customer support personnel also is critical, along with a clear path for escalating service issues until they are resolved.
Finally, if a valued merchant escapes prevention efforts and departs, be willing and prepared to follow up, discover the cause, address it if possible and do what you can to reverse the decision. Keeping a profitable customer always is more beneficial to your bottom line than finding, recruiting and boarding a new customer.
Download the White Paper
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