sales
Hard Work, Big Success – The True Story of an MCA Broker
December 15, 2017Sales is a tough field for anyone to break into even if they come from the most ideal of circumstances. At some point, the rubber meets the road for every MCA broker, at which time they must decide whether they’ve got what it takes to make it in this business.
This is what makes Lerry Dore’s story so remarkable, as it seems that the more he got knocked down in life, the higher he was destined to rise. Today he’s employed as an MCA broker at Cresthill Capital. And while education has been paramount to getting him here, evidenced by the fact that during his entire employment he has been in college and he is still one of the funding company’s most successful brokers, Dore more than anything else was trained at the school of hard knocks.
Coming to America
Dore was born in South Florida, but he wouldn’t stay in the United States for long. After his parents split up, his mom was having a tough time making ends meet and made the impossible decision to send him to Haiti to live with extended family.
“My mom had a very hard time supporting us right out of the gate. Soon after I was born, I was sent to Haiti to live with my aunt and cousins,” he said, adding that this gave his mom a chance to get on her feet. “She needed to get a job so that she could provide for us at a basic level.”
Dore would remain in Haiti for the first three years of his life, where his first language would become Haitian Creole. But you wouldn’t detect a hint of an accent talking to him today at the age of 23.
Dore’s mom eventually found a job. She was only earning minimum wage at a hospital, but it was enough to get the wheels in motion to bring her son home.
“She was in a position to provide food, electricity and shelter for us. That’s why I came back,” said Dore, adding that he doesn’t remember much of Haiti with the exception of the plane ride home. “That’s where my memories start,” he said. Perhaps it was somewhere over the Caribbean that young Dore’s dreams began to form.
When he got back to Florida, Dore was able to meet his mom for what felt like the first time for him. He also met his brothers and sisters for the first time ever. He explained how at this point, his mom was still getting adjusted to life in America as an adult immigrant.
“There were a lot of things that I went through as a kid to this point that she couldn’t give me guidance on. She simply didn’t have that experience. That brought a challenge,” he said. Little did he know that these obstacles would help shape him into the resilient person and successful MCA broker he is today.
While getting used to the American culture was a challenge, something that his mother never lost sight of was the importance of education. “She was very big into education,” he said. Dore’s mom discovered Head Start, a government subsidized program that provided a pre-school education for families who couldn’t otherwise afford it. That was where it would all begin for Dore, and come hell or high water his mother was going to enroll him. Without the luxury of an air-conditioned vehicle to drive in the hot Florida heat, the pair set off on foot to sign up. Some 12-15 blocks later they arrived.
“Both of us were sweating bullets. She didn’t know it, but there was a small registration fee. At the time, she didn’t have it,” Dore explained. It was then that fate seems to have stepped in in the form of the woman who was handling registration. She pulled the pair aside and told them that after witnessing the dedication that this mother had toward her son, she was going to waive the fee. In return she only asked that they keep it on the down low.
“That small gesture made a dramatic difference in my life,” Dore said. “If I was not able to attend, I wouldn’t start school until I was seven or 10 years’ old. That was a very important moment in my life.”
Indeed, it was, as it would set in motion a series of events that would lead Dore to where he is today, a successful MCA broker at Cresthill Capital. But before he would join the firm, there were still more hardships waiting for him, not the least of which was the death of a friend in his teenage years. “That could have been me,” Dore exclaimed.
For the average person, life’s setbacks could have held them down forever. For Dore, they seem only to have propelled him further. “The reason why I stayed out of trouble was I was in school and my mother kept us grounded,” he said.
During his teenage years, Dore and his family lived in an apartment complex in a neighborhood of immigrant Haitians where he said the median income was $25,000 to $30,000 per year. He shared a room with his brothers and sisters.
“I focused on athletics,” he said, adding: “That’s where I got my competitive nature. Also, my thick skin,” both of which, incidentally, are characteristics that would serve him well as a broker later in life.
While he excelled at basketball at his Boca Raton high school, Dore wouldn’t be able to pursue those dreams for long. He and his family would be uprooted from their home time and time again amid landlord trouble. This series of setbacks, which involved him sleeping on his brother’s couch for a time, instilled a sense of maturity in Dore at a very young age.
He had a few Division II and Division III offers to play basketball in other states, but he turned them down. Instead of chasing his own dreams, Dore decided to focus on business and find a way to sustain and support his family “Once I graduated, I was not interested in basketball. I wanted to finish college,” said Dore, and lucky for the MCA industry he had his sights set on the field of finance.
Funding Merchants
After High School, the first thing that Dore did was to go online and look for a job. As it so happens, the first ad he saw was at a stock brokerage in Boca Raton. “That’s where I started, in phone sales. I didn’t have a Series 7 license at the time. I was just calling from the Yellow Pages. Once I got someone on the phone, I would transfer the call to someone who had a license,” he explained.
This went on for a couple of months until he heard about a startup company in nearby Delray Beach. “At the time, they were prospecting merchants. That’s how I got into the industry,” he said.
His first job in the MCA niche was with a very small ISO shop. But it was there that he would make a connection to change the course of his career. He was working on a deal that was hard to place and was only getting rejections. That is until he came across Mike Daniels, Cresthill’s No. 1 producer.
“I couldn’t get the deal done anywhere else. The merchant was getting frustrated with the process. I heard of a company that takes chances on merchants with imperfect credit,” he said. That funder was Cresthill Capital. Little did he know at the time, but they would eventually become his employer.
He sent the merchant file over to Daniels, who then reached out to the merchant and got the deal funded. It was at that point, Dore said, that he started to fall in love with Cresthill “because of how [Daniels] was able to treat the merchant with respect and get the deal done.”
For the next six months, Dore would proceed to trust all of his business with Cresthill. He was still employed by the small ISO shop, but he began to outgrow his environment and long for a platform that allowed him to explore his talent and excel. But his pursuit only left him frustrated and thinking about leaving the MCA industry, something he confided in Cresthill Capital’s Daniels, who was turning into a mentor, about.
It was at this point in his life and career that instead of being the rock, Dore needed to lean on someone else. Daniels and Cresthill Capital were there for him. He was invited in for an interview, and as they say the rest is history.
“I was shocked at how diverse the workforce is. There were different types of people with different backgrounds. I liked it right off the bat. And then everyone was very friendly to me from the moment I walked in,” he said. He was greeted at the front door by Cresthill Capital’s Mike Marano, who then proceeded to interview him.
“I’ve actually interviewed and sat with every single person at my company and hired them personally. What I can say about Lerry is that from the moment I looked at his face and saw his eyes, I knew intuitively that he was a good person. And responsible. I had no idea how deep of a person he was, how much humanity he would show. He was a willing student, and we were happy to teach him. And he continues to soak it up like a sponge,” Marano told deBanked.
Dore was convinced Cresthill Capital was the right place for him when Marano insisted that Dore stay in school and continue his education. “They said, ‘we will work around your schedule,’ and that really drew me in,” he said, adding that the dog-friendly environment was a bonus.
Dore has been employed by Cresthill Capital for the past 18 months and is graduating from college this week. He is not only supporting himself, but he’s the highest earner in his family, which has allowed him to help support them.
Paying it Forward
As if on cue from the mystery lady that paid his school tuition when he was just a child, Dore is now interested in paying it forward in life. He said that similar to how Cresthill Capital is involved with philanthropy, he’d like to give back to the community. But his vision goes beyond his neighborhood.
“I want to help kids that are similar to me, who are in programs that try to help them excel in this country. I want at some point to work with immigrants that come in from Haiti and work with them to give them a platform, like the lady who gave us a chance,” said Dore.
Since the Haiti earthquake, his extended family has relocated north to Canada. “But I still feel to some degree a responsibility to try and help out the people in that country and the ones who come here through immigration,” he said.
As for Marano, he said all Dore needs to do is exactly what he’s been doing. “When he leaves me, he won’t have to work again. But knowing this kid, he probably will anyway,” Marano said.
The Road To Training The Best Sales Reps
February 26, 2017
Alternative-finance industry executives tend to agree on at least two basic rules for building a successful sales team: Hire people who know how to sell and never stop training them. Following the second rule requires knowledge and perseverance. The first one takes a leap of faith.
To obey Rule No. 1, companies have to find ways of determining who possesses that elusive quality known as salesmanship, even among inexperienced job candidates. To that end, most firms make an educated guess based on experience, intuition, common sense, high hopes and the good graces of Lady Luck.
“We look at personality traits,” says Zach Ramirez, a World Business Lenders vice president and manager of the company’s Costa Mesa, Calif., branch. “We’re looking for an outstanding person – the highest-caliber person we can find. They should be hard-working and competitive. You can underline ‘competitive.’ They should have a fire inside them.”
“We want someone who’s hungry for money and is going to be a go-getter, says Chad Otar, CEO and executive funding manager at Excel Capital Management Inc. “It’s a feeling that you get when you talk to them. You can tell when a person is going to sit back and not do anything.” In addition, good candidates aren’t intimidated by the challenge of learning how the industry works, he notes.
“It’s really about how you connect with someone,” according to Amanda Kingsley, who owns Options Capital and also works as a sales training consultant. “Even over the phone, you need to treat people with understanding. You need to inspire the trust that you could provide the advisory help they need.” Small details, like remembering a potential client’s daughter just got married, mean a lot, she says.
“It comes down to drive and personality,” says John Celifarco, sales manager at Sure Funding Solutions. He finds there’s not much room for the thin-skinned and it takes a certain kind of person to succeed. “When you find the right people, it usually clicks pretty quick,” he says. “For the people who don’t work out, it usually falls apart pretty quick.”
“I look for strong personalities,” says Isaac Stern, CEO of Yellowstone Capital. “I don’t believe you can necessarily teach someone to sell,” he asserts. “This isn’t an easy sell, so you have to have a Type A personality. They’re on the phone and they’re confident whether they know the product or not in the beginning.” The interview process can “weed out” candidates who aren’t going to find success, he says.
Don’t expect someone with a background in outside sales to find happiness spending eight hours a day on the phone as an inside salesperson, warns Stephen Halasnik, managing partner at Financing Solutions. As a direct financing company, his firm hires salespeople different from those an ISO or broker employs, he says. His company expects salespeople to act as consultants who are knowledgeable about finance and empathetic to small-business owners.
Nearly every company prefers candidates with selling experience, possibly in telemarketing. Some seek reps with a background in selling financial services, but others prefer prospective employees who are new to the industry. “I don’t want to hire someone else’s problem child,” Stern asserts. “I’d like them to learn the way we do things from start
to finish.”
“Different offices have different cultures, so someone who has worked well in one office might not work well in another,” Celifarco says. People hired from other companies may bring bad habits, he says. They may approach the job in a variety of ways they’ve learned elsewhere and thus prevent the company from presenting a consistent face to the public, he says. “Every company has an identity,” he contends.
Applicants without a sales background sometimes rise to the occasion and succeed, says Ramirez. In fact, one of his top sales managers joined the company with no sales experience. Former entrepreneurs, even those without a sales background, often have a lot in common with other small-business owners and that helps them do well, he notes.
Excel Capital Management seeks salespeople with differing backgrounds for two different types of roles in its sales force, says Otar. Openers work on salary and should have phone sales experience so they’re comfortable on the telephone. Closers, who work for commissions, should have experience at selling financial services products or something closely
related, such as stocks or mortgages, he says.
While good hiring practices bring good employees into the company, they also guard against inviting bad ones into the fold. World Business Lenders uses several third-party companies to perform background checks and pre-employment screening, but most often calls upon ADP, says Alex Gemici, the company’s chief revenue officer. ADP performs evaluations that comply with the laws of the states where the employees are located, he says.
Eliminating unsavory candidates carries special significance in the alternative-finance business, notes Ramirez. “It’s critically important that they have no background issues,” he says. “In this industry there a lot of bad apples out there. It’s important that they don’t infiltrate our organization.”
“It’s very difficult to find loyal guys,” Otar laments. “They come in and utilize all your systems and then you catch them stealing.” In other words, they pass deals along to other companies. Otar has caught three of his closers doing exactly that. “You’ve got to be very careful,” he warns, adding that it’s difficult to spot bad actors because they’re skilled at selling themselves.
Once a company chooses the best candidates, the training can begin. New salespeople always start on Mondays at World Business Lenders, and the company’s corporate headquarters conducts sales training nationwide that day, says Gemici. The full day of instruction originates at headquarters, and new hires at branch locations participate on Skype. Subjects include the industry in general, specific company products and sales tips.
On Tuesdays, the World Business Lenders branches take over the training for a day or more, Gemici notes. That instruction, which lasts as long as the branches decide, can include having the new employees “shadow” more-experienced workers and having crack salespeople listen in on the phone calls of the new staffers as they make their pitches.
In the World Business Lenders office in California, Ramirez continues the training every day of a new employee’s first two weeks on the job. Tuesday and Wednesday of the first week, he spends the full eight-hour day with them. After that, he sets aside at least two or three hours of instruction each day. “I want to err on the side of over-training,” he explains.
From there, education continues as long as employees work for the company, Ramirez says. That can include spot training that he institutes anytime he sees a problem or an opportunity for improvement. Ongoing training also helps salespeople keep up with changes that occur in the industry, he notes.
The sales staff in the California office of World Business Lenders also assembles in a conference room for regular sales meetings. Ramirez picks a rep who’s outstanding at some aspect of the job to deliver a short lecture on the subject at those meetings. A star at prospecting, for example, could explain tricks of that part of the trade and then field questions on the subject. “That way, everybody can learn what everybody else knows,” he says.
For ongoing training at Financing Solutions, Halasnik calls his staff into a “huddle” for 10 minutes every day. They review what deals are pending so that salespeople know what management is seeking and can use that knowledge when they’re gathering data from customers. “We’re looking for reasons to give someone financing that doesn’t fit the cookie cutter approach a bank would use,” he notes. The team also use the huddle to share information about the industry.
At Sure Funding Solutions the sales staff meets every couple of weeks for ongoing training. They talk about some aspect of the sales process, such as opening, closing, dealing with banks, what’s working and what’s not working, says Celifarco. “I’ve been in this business since ’08, and I’m still learning new things,” he notes, adding that changing one phrase in a pitch could get better results.
Ongoing training at Excel hinges on monitoring phone calls to ensure openers are asking the appropriate questions to qualify leads and that closers are working effectively, Otar emphasizes. “It’s a never-ending process to learn what to say at the right time,” he says of his company’s training policies. Salespeople who have mastered the basics can bring their own personalities into their presentations to avoid sounding as though they’re reading from a script and thus foster an organic conversation, he notes. “That’s perfect – it’s golden,” he exclaims.
Kingsley agrees. “Don’t be too ‘salesy,’” she counsels. “That’s the best sales advice I can give.” Nobody enjoys receiving a telemarketing call, she reminds her trainees. Larger companies probably won’t heed that tip because they’re focused on volume, but smaller companies can avoid the “salesy” trap, she says.
Training should also teach originators to avoid industry jargon on their calls because prospects simply may not know the lingo, Kingsley cautions. Closers should learn from their training that knowledge of the customer’s industry can help build a relationship, she says. And knowing the customer’s industry also helps salespeople convey a deeper understanding of creditworthiness to underwriters, she maintains.
Financing Solutions trains salespeople to reveal information to clients through a string of questions instead of merely throwing out statements about the company’s products, Halasnik says. The questions can include how the customer’s business works and how he’ll use the money. That can allow the client to sell himself, and it can help the salesperson explain the client’s situation to the underwriters, he says.
Salespeople should learn to present themselves as professionals and avoid sounding like used car dealers, Halasnik maintains. “They have to understand business,” he notes, adding that training must convey that sensibility because “they don’t really come in that way.” In fact, he maintains that financing Solutions has to persevere in continuing to help the sales staff understand how small-business owners think.
Even though training never ends, it eventually pays off, Halasnik contends. He looks forward to the time – possibly in six months or so – when the roles reverse because his salespeople are picking up so much information that they’re training him. The fact that sales reps are making contact with customers keeps them in touch with the pulse of the industry, he notes.
But problems can arise even with the most persistent training efforts, so it’s also vital to begin the process with employees who are trainable, Kingsley suggests. “Some people listen to you, but then they don’t act on the advice,” she maintains. Others don’t want to expend the effort necessary to research their customers’ industries. “If you’re going to make $10,000 off of a sale, put in the work for it,” she admonishes.
Some companies are hiring lots of salespeople and putting them to work quickly as part an effort to achieve sheer volume, Kingsley says. Instead, she recommends training a smaller number of reps to conduct themselves in a transparent manner that promotes repeat business.
World Business Lenders allows for a 90-day period to determine whether a new salesperson and the company are a good fit, says Gemici. Turnover occurs during that period, often because the company is growing so quickly that it’s necessary to take on a few inexperienced employees, he says. For salespeople who complete the 90 days, the success rate is high, he notes.
“We like to say six weeks,” Otar says of his company’s probationary period. By then, a closer should be making four to seven deals a week, he suggests, noting that openers should generate 15 to 25 leads weekly and five to seven should be getting funded.
Salespeople can require four months to really catch onto their jobs, according to Halasnik. He finds that he can gauge their progress by the quality of the questions they ask, not by what they say. As they learn the business, their questions improve, he notes.
The effort required to find and train salespeople can tempt some companies to steal good employees from their competitors, but the problem’s no more severe in the alternative-finance industry than in other businesses, according to Ramirez. “I never intentionally poach someone else’s employees, although people have tried to recruit mine,” he says. “Most of these people are clients. These competitors of ours send deals to us so I don’t want to do anything to jeopardize that relationship nor do I think that’s a good business tactic.”
So where are those prospective employees hiding? World Business Lenders employs a full-time in-house recruiter to ferret them out. Excel finds candidates on industry blogs or through general employment websites. Kingsley urges companies to contact colleges to seek out finance majors. Stern says he puts up a post and receives “tons of resumes.”
Wherever the employees come from, one of the keys to their success lies in understanding the customer’s business, Halasnik maintains. “If you only think of your business as money, it could be a little bit boring,” he says. “If you think about who the clients are and how they got there and who their customers are, that’s the fun part of the job.”
Motivating Your Sales Force – Tips From the Floor
August 30, 2016
Fancy steak dinners, electronic devices and cold hard cash are just some of the ways ISOs and funders these days are motivating sales reps to bring in business.
Although it’s largely a field for self-starters, many companies find that even small tokens of appreciation do wonders to increase rep productivity. “Waving a carrot in front of your reps can make a massive difference,” says Zachary Ramirez, branch manager of the Costa Mesa, California branch of World Business Lenders, an ISO and a lender.
When it comes to motivating sales reps, every company does things slightly differently. Some have more established incentive programs, while others are more ad hoc, depending on how the day, week or month is shaping up. The common goal of all the programs, however, is to give a little something to get something greater in return.
Ramirez remembers one sales rep who won a trip to Las Vegas and then continued to be the top rep for three months running. “Those types of rewards can keep a sales team motivated, hungry and excited,” he says.
From time to time, Ramirez offers rewards such as a small cash bonus if a rep meets certain metrics like getting three submissions in a day or multiple fundings in a week. In addition, whenever his reps, who are all hourly employees, hit key performance indicators, Ramirez rewards them with a poker chip. After they accumulate enough, they can trade in their chips for various prizes. Twenty-five poker chips might be worth a flat-screen TV and 50 chips could be an expense-paid trip to Las Vegas, for example.
When it comes to motivation, it’s important to incentivize the correct behavior, Ramirez says, noting that in his earlier years running an ISO, he used to reward reps based on the number of calls they made in a day rather than applications, approvals or fundings.
The latter represent a much more serious commitment and are worth motivating for as opposed to simply making a phone call, where the outcome is uncertain. “Even if they make as many as 500 phone calls in a day, it’s irrelevant if they are not moving the transactions forward by getting applications and bank statements,” he says.
It’s also very important to have clear-cut expectations; reps need to know the consequences of not performing, Ramirez says. Most top salespeople won’t need the stick. But it’s still necessary for them to know the policies, he says.
THE POWER OF SELF-ORIGINATION
One major way United Capital Source incentivizes its 15-person sales force is by self-originating leads. It provides its reps—who are all W2 employees—with merchants that are actively expecting phone calls as opposed to handing them a laundry list of names to pitch which may or may not pan out. It costs more for United Capital to do this, but it works well for the company and for its sales force, says Jared Weitz, chief executive of the New York-based alternative-finance brokerage.
“It enables us to put our guys in a position where they are growing with the company and the company is growing as well,” he says.
In addition, United Capital has an aggressive pay structure that allows salespeople to grow with the company. For instance, the pay plans are all based on how the company is doing overall, as opposed to an individual salesperson’s performance. In this way, it encourages the sales force to work together, as opposed to each person being out for himself. Weitz says its sales team understands that if the company hits x, the sales team gets y. United Capital also offers competitive healthcare and 401(k) plans and there’s no vesting period for employees to receive their 401(k) employer match. Additionally, the company does small things like Friday lunches on the company’s dime as a thank you for time spent. It’s another way to keep the sales team happy, Weitz says.
Fundzio, an alternative funder in Fort Lauderdale, Florida, also works very hard to make sure it keeps up its pipeline of fresh leads so that reps don’t have to do that on their own. Indeed, Fundzio provides them with between seven and ten fresh and promising revenue-earning opportunities each day. This helps tie the reps to Fundzio because they have a continuous stream of business and don’t have to find it on their own.
“It guarantees them at bats every day,” says Edward Siegel, founder and chief executive of Fundzio. It also helps tie the reps to Fundzio because they have constant business. “The key thing is having new leads,” he says.
Additionally, anyone who funds a deal gets to spin a wheel in the office at the end of the business day and earn cash or special prizes like concert tickets or a fancy dinner or a $200 gift certificate. Reps really appreciate getting those prizes, which is evident when they come back to work after enjoying their steak dinner at a Fort Lauderdale waterfront restaurant. “I think it creates a fun and relaxed atmosphere feeling. A little bit goes a long way,” Siegel says.
One way Fundzio motivates reps from the get-go is to bring them on initially as independent contractors. If they prove themselves over a 90-day period, they have the opportunity to become an employee. At any given time, the company has about 20 to 25 sales reps, representing a combination of contractors and W2 employees.
Another way Fundzio helps motivate reps is by allowing them to earn residuals from repeat business for the life of the account as long as they are still employed by the funder. Many funders have renewal departments and reps don’t directly benefit when a customer does repeat business, but that’s not the case at Fundzio, Siegel says.
REVVING UP SALES WITH CONTESTS
Certainly, to succeed in the alternative finance industry, sales reps have to be self-starters. It’s a key requirement to do the job well, in part because so many shops are purely commission-based. Nonetheless, many companies find it helps to grease the wheel a bit—regardless of whether reps are independent or W2 employees.
Fast and Easy Funds, for instance, holds weekly contests to encourage its internal sales force of 15 independent contractors. One week the contest may be for the rep with the most dials, another week it’s for the most submissions and another week for the highest number of deals funded. Each contest pays in the vicinity of $150 to $250 cash. “Every week I change it up. They don’t know what the contest is going to be until the last day of the week,” says David Avidon, president of Fast and Easy Funds, a broker and alternative funder in Boca Raton, Florida.
iAdvanceNow, a brokerage firm in Uniondale, New York, runs daily, weekly and monthly bonuses for its 38-person sales force. For instance, if a rep submits two completed deals for approval in a day he or she might get $100 cash; for three completed deals, the cash bonus might be $250, says Eddie Hamid, president of iAdvanceNow.
On a weekly basis, for submitting six complete files, reps get one spin on a big Wheel of Fortune-like apparatus in the office. Everybody is a winner; the prize depends on where the arrow lands. It may be a cash prize of $20, $50, $100 or a physical prize like a 40 inch-Samsung TV, an Apple Watch or iPad, Hamid explains.
On a monthly basis, meanwhile, each team of five to seven sales reps has a goal. If as a team they reach their goal, they get $1,500. Additionally, the top producer of the month—provided he or she has achieved a minimum of three merchants being funded—receives the top producer bonus of $1,500. The runner-up receives a $1,000 bonus and the third place sales rep receives $500. The top team in the office also gets a steak dinner at a local establishment, Hamid says.
The system works because it gives them a drive to obtain a goal while also encouraging friendly competition, says Hamid, noting that he once overheard reps talking about how much they value being named the top producer. “With sales people, they are more concerned with the recognition than the prize or the money they are receiving,” he says.
iAdvance has been in business for about two years. The current motivational system has been in place for about a year-and-a-half and it seems to work very well to motivate the sales force, Hamid says. In addition, if they are having a down sales month, Hamid ups the ante for the daily goals, adding not only cash, but also prizes.
These techniques all help to light a fire under the sales force, he says.
STRATEGIES FOR SLOW DAYS
Sometimes around 3 p.m., if he feels like the room is starting to quiet, Jordan Lindenbaum, director of sales at Excel Capital Management in New York, a business financing ISO, might offer $20 or $30 cash for the next submission. Or he might offer $40 to $50 for two or three submissions by the end
of the day.
“All it takes is one slow day to kill the energy of a sales rep,” he says.
Lindenbaum finds that motivation checkpoints seem to work well. For instance, at the end of the month, the firm commonly gives a $200 bonus to the sales rep with the most submissions. For actual deals funded, Excel Capital is also working to implement a more concrete revenue-based bonus system as well, Lindenbaum says.
Excel Capital works with independent ISOs in addition to its in-house staff to bring in business. To encourage independent ISOs to refer business, the funding company offers higher payouts to those who consistently bring in high quality deals than to ISOs who bring in deals sporadically.
Chad Otar, co-founder and managing partner at Excel Capital, says a key piece of motivating sales reps is to make sure the sales manager feels motivated as well. Accordingly, the firm also makes sure to motivate Lindenbaum with larger payments for doing an outstanding job of motivating the sales force to bring in deals. “We need to motivate the sales manager so the sales manager motivates the people on the phone. It’s a chain effect. You motivate one and it motivates the others,” he says.
Excel Capital also believes in the power of team rewards. Recently, for instance, company executives treated all staffers to a steak dinner at Delmonico’s in New York City. “We’ve done it many times so our team knows they are appreciated and that our goals were met because everyone worked together,” Otar says.
THE SALARY VS COMMISSION CONUNDRUM
Paying reps a base salary in addition to commissions is another strategy some ISOs use to motivate sales reps. A salary is especially meaningful to reps just starting out, notes Ramirez of World Business Lenders.
He says he has worked with a lot of ISOs and many of them don’t want to pay reps a base salary because they feel it’s a mistake to give them a cushion. Because by doing so, reps get comfortable and when they get comfortable, they don’t push deals—or so the thinking goes. But Ramirez believes this is counterproductive to the rep’s career and the ISO’s sales.
He believes reps should be given a big enough base while they are learning the industry—say for 90 days. Giving them $2,500 a month or so, motivates them and it doesn’t choke their possibility for survival. “You have to give every salesperson the opportunity to succeed. Give them some coaching, give them some guidance, give them a little time. But if there’s no possibility of that rep succeeding or being an asset to your team, it’s important to remove them as efficiently as possible,” he says.
It may seem counter-intuitive, but removing dead weight is also motivating for reps who are really working hard to sell, Ramirez says. To keep that person is demoralizing for the other reps—who may feel they don’t have to work as hard either or who feel they have job security even without doing their best. “It fosters complacency,” he says.
You Close The Sale Before The Sales Process Begins
January 22, 2016
YOU WRITE THE END OF THE STORY AT THE BEGINNING OF THE PROCESS
As an adolescent, I had a dream of becoming an actor. There was no true purpose, direction or vision behind the dream, the dream was based mainly on the fact that I had seen a lot of A-list celebrities on television and they always seemed to have had the world in the palm of their hands. During my time studying and performing as an actor, I also learned a little bit about the sequence involved in writing a screenplay. It was peculiar to me at the time to note that a lot of the best writers would always write the end of the story at the beginning of the process. At the time, I thought to myself: “How can you establish an ending without first establishing a beginning?”
IT DAWNED ON ME
As I grew older I changed my dream from becoming an actor to becoming a successful B2B sales rep. As I got deeper into my commercial finance B2B sales role, it finally dawned on me as to why those screenwriters wrote the end at the beginning, and it was because the engagement of any process is the journey to the destination, not the destination itself. However, for the journey to be engaging, we must first establish a destination for which the journey is based upon, then fill the journey with a variety of ups, downs, twists, turns and character growth as we arrive at the end.
B2B SALES IS SIMILAR
The profession of B2B sales is similar, especially when it comes to the selling of financing, whereas discussion and debate over how the ending should look, should be done with the merchant upfront (during the pre-qualification stage) as well as discussion on the journey (underwriting process) to the destination.
When it comes to B2B sales, especially the selling of commercial financing, I believe you “close” at the beginning, that is, I believe you write the end of the story at the beginning of the process, not at the end. If I cannot come to an agreement with the merchant on the “ending,” such as the realistic potential terms (even if it’s just a range), then the sales and underwriting process should never begin, and we both walk away.
STOP WASTING RESOURCES
Some brokers choose to keep the potential terms a secret until the end, and hope that the deal doesn’t fall apart when the time comes to finalize everything. Why keep the potential terms a secret and have the merchant fill out apps, fax over statements, have my funder key in the data, spit out approvals, only for the merchant to eventually tell you that the numbers aren’t what they had in mind? That makes absolutely no sense.
I believe that by the time I submit the deal to my funder, it should be already closed with the merchant, and all I have to do at that point is close the funder in approving the deal I proposed to the merchant from the beginning.
Loan Brokers: Fight Back and Defend Your Brand
January 16, 2016
LIFE DOESN’T PLAY FAIR AND NEITHER DOES YOUR COMPETITORS
Let’s face it, a big part of our job is customer service. As a direct funder or lender, or as a large or small brokerage, a big part of our job is to service our existing customers, partners, vendors and suppliers with the utmost integrity, efficiency and ethics. But even the best of customer service intentions can become scarred when those who compete against you, choose to compete unfairly through vile fabrications, defamations and falsehoods.
MORE MONEY, MORE PROBLEMS
Not many people (including myself) are too fond of hip hop music as most of the time the lyrics are questionable, but in 1997, everybody agreed with The Notorious B.I.G. when he touched on the concept of making more money and having to subsequently deal with new problems.
The bigger and more exposed you get, the higher the probability that you’ll have a run-in with dissatisfied merchants, partners, vendors and suppliers. This is common knowledge, as many of the largest ISO/MSPs and MCA firms are all over the ripoff reports in one form or fashion, with current and prior customers blasting the companies over sometimes legit issues, and other times issues of a petty nature that could have been resolved in means of a lesser depiction. But continuing on, the bigger you get, the bigger your “haters” will get as well. The rise of the internet has multiplied the presence of haters and trolls to a population standing taller than ever before. These haters love to use online discussion boards, social media, blogs, and review sites to spread their lies, hatred and vile.
JUST BECAUSE YOU SMELL SMOKE, THAT DOESN’T MEAN THERE’S A FIRE BURNING
I’m not sure who the author of this quote is, but it says the following: People will question all the good things they hear about you, but believe the bad without a second thought. Haters know this quote to be true and are quick to spread their venom knowing that if it’s coming from multiple sources, then far too many people will take them at their word using the flawed logic of “where there’s smoke, there must be fire.”
Well, I say just because you smell smoke, that doesn’t mean there’s a fire burning. Instead, you could more than likely have a group of haters who have perfected the art of blowing smoke, which is to make unfounded or exaggerated claims. As a result, you need to protect your brand against haters. There are those of you who believe that if you just ignore them then they will go away. Well, I disagree with that notion and so does Motorhead’s Lemmy Kilmister. “I don’t understand people who believe that if you ignore something, it’ll go away,” he was once quoted as saying “That’s completely wrong because if it’s ignored, then it gathers strength. Europe ignored Hitler for twenty years, as a result he slaughtered a quarter of the world!”
LOOK AT DONALD J. TRUMP
If he wins the candidacy or not, Donald Trump will go down as perhaps the most fiery presidential candidate of all time. When Trump believes something, he says it, without filter and without care of political expediency. When Trump is “attacked” by the media or one of his fellow GOP opponents, he fires back. On the O’Reilly Factor after the final GOP debate of 2015, Trump clarified that if the media or one of his GOP opponents makes a valid criticism about him, he’s perfectly fine with that, but what he has a problem with is when they flat out lie about something he’s said, done or believes in.
While I’m an Independent and not sure who I will support for the 2016 Presidential election, I find myself in agreement with Trump on a number of things, including how Trumps responds to “haters.” My stance is that if you have a valid criticism about something I’ve said, done or believe in, then I’m all ears! But when you flat out lie about me, now you are going to tick me off.
GET MAD, GET MAD!
One of the reasons for Trump’s surge in the polls is the fact that a lot of people are angry at leaders in Washington and aren’t going to “take it” anymore. Trump’s fiery persona attracts people to the real estate tycoon, causing him to have a massive lead in the Republican race. Like Trump, you should get mad as well if you have worked to build your brand, resumé and marketplace standing, and then all of a sudden here comes some anonymous troll spitting out all types of defamations across the internet:
- Don’t work with XYZ Company, they are a scam!
- XYZ Company stole my money!
- XYZ Company’s President is a criminal!
- XYZ Company backdoors deals!
The definition of libel is to write something about an individual or a company that is defamatory, which is a statement that is false but written in a way to convince the public that it’s true. The internet has increased the presence of libel so much, that insurance companies market their personal umbrella policies as a form of insurance in case you are sued for libel. Some people don’t realize that typing something on the internet can get you in trouble if you are lying about the person or the company in question. Now, I’m not advising you to run out and sue everybody who lies about you online, as that would be very costly, however, I am advising you to get mad by fighting back and doing some of the following to protect your brand.
FLOOD THE MARKET WITH TESTIMONIALS
Begin to flood the market with positivity. When a prospective client searches for your company in Google and finds the negative reviews, they can also see the various videos, blogs and review sites where your customers, partners and vendors are praising you. You can always say: Look at the many customer testimonials that we have and look at the size of our customer portfolio, clearly more people are satisfied with us than dissatisfied.
THE BETTER BUSINESS BUREAU
The BBB will provide you an “A+” or “A” rating as long as you respond to any complaints filed in a timely manner. You can use your “A” rating status in marketing and in response to prospective clients inquiring about negative reviews. You can always say: We have an A+ rating with the BBB, we must be doing something right.
PUBLIC RELATIONS
A lot of direct funders and large brokerages have large sources of operating capital to play with, so why not hire a PR Team? Have a PR Team speak with the media often to generate as much positive press as possible to help balance out the negative press. In addition, have the company CEO and other high ranking officials do various forms of PR when available.
TAKE THE FIGHT TO THE TROLLS
Go to the discussion board, social media post, blog post, vlog post, or website, and directly respond to the person creating the negative press. Debate your points, prove them to be wrong, show them to be a liar, and encourage your employees, vendors and partners to join in on the fight. Silence can be taken in one of two ways, either people will think you are “too big” for this petty non-sense, or they will think that you are silent because you are guilty. I say take the fight to the trolls, debate your points and then move on after you’ve put the verifiable truth on the table.
THE FINAL WORD
Some people will already know something is a lie, but choose to believe it anyway because they want it to be true regardless. Sean Parker’s character from the Social Network said that, “even if you’ve managed to live your life like the Dalai Lama, they’ll still make things up because they don’t want you, they want your idea.” The honest truth is that most of your haters are just jealous of you because, you have something that they want but don’t have. So, don’t allow them to throw you off your game.
As a quote I read the other day from some unknown source said, “you should never hate people who are jealous of you, but instead respect their jealousy as they are the people who think that you’re better than them.” Having haters is a sign that you’re doing something right. Your prospective customers and partners with good judgment should be able to read between the lines to see the truth, and for those that can’t, well, maybe they are too gullible (and stupid) to be doing business with anyway.
Are You Weak, Or Are The Leads Weak?
January 13, 2016
A LOOK BACK AT A CULT CLASSIC
The 1992 film, Glengarry Glen Ross, is a cult classic and one of my favorite movies of all time, with excellent writing, storyline and acting work done on behalf of the stars. In my opinion, the best part of the film was the beginning, when Blake (played by Alec Baldwin) was sent in from Mitch & Murray to fire up three of the office’s sales reps who were “low on the board” in terms of their sales performance. Blake’s “always be closing” speech has been glorified and imitated in sales offices across the United States since the movie’s release on Friday, October 2nd, 1992. I can hear the conversation between Blake and the late Jack Lemmon’s character, Shelley “The Machine” Levene, right now:
Blake: You laughing now? You got leads, Mitch & Murray paid good money, so get their names to sell them! You can’t close the leads you’re given?! If you can’t close sh*t, then you are sh*t! Hit the bricks pal and beat it because you are going OUT!
Shelley “The Machine” Levene: The leads…are weak.
Blake: The leads are weak?! F**king leads are weak?! You’re weak!
Blake was sent in to “fire up” The Machine as well as Dave Moss (played by Ed Harris) and George Aaronow (played by Alan Arkin), who were all struggling to meet sales numbers due to what they believed to be mainly their Office Manager’s fault (John Williamson who was played by Kevin Spacey) for supplying them bad, outdated and dead leads. The main character of the film was Ricky Roma (played by Al Pacino) and Roma wasn’t having the same struggles as his three counterparts, as he received the “premium leads” from Williamson for being number one on the board in terms of sales performance.
WAS ROMA’S SUCCESS MORE OF A RESULT OF HIS PERSONALITY OR THE GOOD LEADS?
Could Roma’s sales success have been based on the fact that he was just a “tad bit” more charismatic than The Machine, Moss and Aaronow? Or, could the bulk of Roma’s success be tied to the fact that he wasn’t sent out to sell to dead leads? Were the reps weak, or were the leads weak?
Moss believed it was all about the leads, even suggesting to Aaronow during the film that they start their own agency. Towards the end, Roma himself revealed that he believed it was all about the leads as well, as once someone broke into the office to steal the premium Glengarry leads out of Williamson’s office (which was later revealed to be The Machine and Moss), Roma was offered some of Williamson’s “dead leads” and Roma quickly rejected them, throwing them back into Williamson’s face and stating that he wasn’t going out until he got the Glengarry leads.
As mentioned, this movie is a cult classic, but often art imitates life as this movie displays one of the fundamental problems of the sales profession today as a whole, and it’s the fact that most Sales Managers are completely out of touch. As a result, for this article let’s take a deeper look into this topic to determine if you’re weak, or if the territory, market and leads you are being asked to “sell” or “sell into” are weak.
IT’S TIME TO DO AWAY WITH MOST SALES MANAGERS (THEY ARE USELESS)
As globalization and technology automation in the 21st century surely replaces the jobs of many retail salespeople, customer service agents, and low level brokers, what I’m really hoping for is that someway and somehow, we can get rid of most Sales Managers. They are one of the biggest problems in the sales profession today because:
- They are completely out of touch
- They promote sales strategies that don’t work
- They teach their reps to read off “scripts”
- They don’t equip their reps with research, trends and ground breaking solutions
- They don’t train their reps to become component professionals who can critically think
- They instead train their reps to become a robotic, script reading, mindless drone
On top of all of this, most Sales Managers do not understand the B2B Sales cycle, as they “train” their reps as if they are selling a box of girl scout cookies or a new music album, focusing on over the top personalities, how cute someone is or their level of charisma. Instead, they should be focusing on providing knowledge, research, trends and other information to build a competent critically thinking professional, to implement market solutions that fulfill unmet market demand.
The majority of Sales Managers need to be done away with. These incompetent fools believe that it’s mainly the personality of the sales rep that makes them successful, thus, they will throw their reps out in a bad territory, a bad market, and calling on dead leads because in their mind a “good sales rep” has the “personality” to sell fire to Hell. As a result, their belief is that the quality of the market, the territory, the leads, nor the competitiveness of the products they sell don’t matter!
DO NOT WORK UNDER A SALES MANAGER
I usually recommend that B2B sales professionals work on an independent basis so that they don’t have to be subjected to an out of touch Sales Manager, which does nothing but stop your career progression and limit your earning potential. This is especially true when these out of touch Sales Managers provide you with their “leads”, as a vast majority of the time, their “leads” are inefficient.
THEIR LEADS ARE REALLY JUST DATA RECORDS (BUT THEY DON’T KNOW THAT)
Most of the time the leads aren’t leads, they are data records. You are going to have a much lower conversion rate on data records than you would leads, but the out of touch Sales Manager (who thinks he just gave you “leads”) will think that your conversion should be a lot higher and thus, he might “inform you” that you just aren’t cut out for this business.
THEIR LEADS ARE OLD AS HELL AND THE SALES CYCLE IS OVER (BUT THEY DON’T KNOW THAT)
Or, they might supply leads that are aged, sometimes from 90 days ago or more, thinking that the sales cycle is still active with these leads when the fact is that for the vast majority of them, the sales cycle was over months ago. Aged leads are usually leads where a merchant requested financing, but there’s usually one of three issues with these types of “leads”. Number one, the merchant either received the funding they wanted two months ago, or number two, they were declined by everybody and gave up on speaking with anybody else about the topic. Or number three, it could have been the case where the merchant wasn’t truly serious about getting funded anyway, deciding not to move forward with anybody. The few leads that you do convert, because your Sales Manager believes these were “hot leads”, he will end up scolding you over the low conversion numbers.
THEY USE THE GLENGARRY GLEN ROSS MODEL (WHICH REVEALS HOW INSANE THEY ARE)
This is the biggest pet peeve right here, they might use the Glengarry Glen Ross model, which makes absolutely no sense. So here’s what they would do.
They would spend a lot of money on a marketing budget to produce a good stream of leads of merchants looking for financing assistance from an alternative basis. However, instead of dishing them out to their sales reps in equal number, they will give the majority of them to the reps “already high up on the board” and give hardly any of them to the reps at the lower end of the stick. All this does is causes the “rich to get richer” in that the reps getting the hot leads will just continue to stay up high on the board while those at the bottom can never move up.
What I don’t get is this, if you don’t believe in the reps at the bottom of the board, why not terminate them? Why the hell would you keep them on your staff, if you no longer believe in their abilities to perform and thus, aren’t going to provide them with the resources needed to move up on the board?
ARE THE LEADS WEAK, OR ARE YOU WEAK?
The truth is that in professional sales, it’s all about supply, demand, and solving complex problems with innovative solutions. It takes research, strategic planning and strategic market segmentation in terms of who we target, as the target of our prospecting has to be someone who is currently in a situation to utilize our services. This means that 90% of the job is that of finding the right territory, market and/or leads to sell to. Now, there are a lot of incompetent salespeople in the world, and you could equip them with the resources needed to succeed and they still fail to execute. That would indeed make those reps “weak” rather than the leads being weak. But in my opinion, far too often are competent salespeople at the mercy of a weak Sales Manager that provides them with weak training, weak products, weak markets, a weak territory, and weak leads. It’s based on this that my opinion stands, in that most of the time it’s the leads that are weak, rather than the competency of the sales professional.
Don’t Quit So Early: Sometimes The Merchant Just Needs More Time
December 4, 2015To this day, I still have no idea who The National Sales Executive Association is, such as what they do, where they’re located and how long they have been in existence (if they even exist at all). But a couple of years ago, I read a quote that was supposedly from this organization, that went as follows:
Follow Up
- 48% of sales people never follow up with a prospect after the first attempt
- 25% of sales people make two attempts with a prospect and stop
- 12% of sales people make three attempts with a prospect and stop
- 10% of sales people make more than three attempts with a prospect
When Sales Are Made
- 2% of sales are made on the first call
- 3% of sales are made on the second call
- 5% of sales are made on the third call
- 10% of sales are made on the fourth call
- 80% of sales are made on the fifth – twelfth calls
From these statistics, we could conclude that 10% of sales people pick up 80% of the sales, due largely to the fact that they initiate five or more call attempts to the prospective client in particular.
While I have no idea who The National Sales Executive Association is, over my time in B2B sales, I can surely say that giving the merchant more time to respond to you surely works. Matter of fact, 2% is very generous, I think that less than 1% of my “closes” have been on the first call attempt and over 90% of my “closes” have come from making at least 5 attempts through either telephone or email.
OUT OF TOUCH SALES MANAGERS
One of the main reasons I have only participated in the profession of Sales on an independent basis, is mainly so that I can contain 100% creative, strategic and operational control, and not be subject to out of touch Sales Managers.
The fact is that far too many Sales Managers are just out of touch, either they will have their team using outdated marketing tactics such as calling UCCs, Aged Leads, or random listings out of the Yellow Pages, or they might have their team selling inefficient products. In terms of inefficient products, they might have their reps trying to push 1.30 factored rated advances on A Paper clients in the age of Lending Club and other A Paper lenders filling up the merchant’s mailbox, email and voicemail with A Paper offers.
But if these two aspects weren’t bad enough, far too many Sales Managers also have a very impatient disposition when it comes to the B2B sales cycle. Far too often, they will set B2B sales quotas either by the day, the week, or the month, rather than by the quarter or the year, as they should be set.
The bottom line is that sometimes it just takes a merchant longer than usual to move forward, which while it surely delays the sales cycle, it doesn’t mean that the merchant is disinterested or trying to pull your chain, sometimes there’s just legitimate delays in the B2B sales cycle.
THE REALITY OF THE B2B SALES CYCLE
Far too many Sales Managers are just out of touch, as they still believe in the mythical smooth walking, talking and overly charismatic sales guy who can sell fire to Hell. According to these types of Sales Managers, you should be able to get all of your applications within the first call or within the first week of speaking with a merchant, and if you don’t, then apparently you don’t belong in this industry and should seek opportunities elsewhere.
How out of touch could these guys be? Have they ever in their life managed an individual B2B Sales Pipeline? In reality, here’s how the deals go most of the time:
Week One
- Your first attempt with the merchant is on a Monday. The merchant is interested but is very busy right now as he’s about to enter his afternoon rush. He gives you his email, says to email him over information and follow up on Thursday.
- You email information that Monday night and then follow up that Thursday. You get his staff member on the telephone saying he had to leave early today, but will be back on Saturday. You send him a follow up email on Thursday night.
- You call back on Saturday and he answers the telephone, he confirms that he received the email but just hasn’t had time to sit down and take a look over everything. Says to follow up with him this Monday at 2:00 p.m. before his afternoon rush.
Week Two
- You call back that Monday, he says he has a good 5 minutes to talk and before you can begin speaking, he immediately begins a long discourse. He talks about how he’s looking at setting up this second location and how he has it all lined out, he just needs a good $100k to get the second location up and running. His bank hasn’t been that much of a help for this project and he reviewed your email, he likes the premium estimated price ranges that you have listed with up to 24 month terms. You begin to ask him some questions to properly pre-qualify him, you discover that he’s an A Paper client and you estimate that you can get him approved for the $100k over 24 months that he’s interested in. You go over the documentation needed to get started and the estimated timeframe until funding completion. He says that sounds great and to email everything you need from him by email tonight, and he’ll work on getting that back to you as soon as he gets back to his home office tonight.
- You email him that Monday night with items needed to move forward. Tuesday, Wednesday and Thursday go by, you don’t hear anything from him.
- You follow up with him on Friday and his staff member says he’s not there but he will indeed be back on Monday. You leave a message for him with his staff member as well as send him a follow up email that Friday afternoon.
Week Three
- You call back on that Monday, his staff member says he is available and goes to bring him on the telephone. He gets on the telephone and says he’s been working on the items this morning and will fax them shortly. He asks for your fax line once again.
- On Wednesday morning, you get a fax from him with only partial items of the application package, such as only 2 pages of your 3 page application, and only 2 months of bank statements even though you requested 3 months. You call him that Wednesday afternoon to confirm receipt and request the additional items that were missing. He says he will get that right over to you here shortly.
- Thursday and Friday go by, you receive no additional items. You send him a follow up email on Friday night about the additional items.
Week Four
- You follow up with him that Monday to touch base for the additional items, he gets that over to you by fax that afternoon, now giving you a completed application package. Now you have a completed application package, or what is referred to as a “close”, but that took four weeks of follow up which included 8 follow up calls and numerous emails.
SOMETIMES IT COULD TAKE 6 MONTHS OR MORE
This was just one example of where it took four weeks to get a completed application package, however, sometimes it could take up to 6 months for me to receive a completed application package from a merchant due to various reasons.
Some of the reasons include: waiting for an existing balance to come down, waiting for a tax lien payment plan to get finalized, waiting for a bankruptcy discharge, waiting for NSFs to come down, the merchant running into a family emergency, or the project for which the merchant needed funding gets put on hold in some way.
SOMETIMES THE MERCHANT JUST NEEDS MORE TIME, DON’T QUIT SO EARLY
This is why any B2B sales quota that’s measured on a daily, weekly or monthly basis is completely and utterly insane. B2B sales cycles can take longer and are usually more complex than B2C sales cycles which involve fewer decision makers, lower dollar exchanges and usually less complex solutions.
This is why Sales Managers and Agents alike should be more patient when it comes to the B2B sales cycle. On a daily basis, the focus should just be on continuing to grow your B2B Sales Pipeline as well as follow up on said B2B Sales Pipeline through telephone calls, email, mail and social media. You would then begin to receive emails, faxes and mailings with various application packages from members of your B2B Sales pipelines at random times of the day and night.
You should judge the effectiveness of your process on more of a quarterly or annual basis, rather than daily, weekly, or monthly, as sometimes the merchant just needs more time.
Don’t quit so early.
Business Lending: Sell The Whole Solution
November 26, 2015
The year of 2015 went by rapidly, as it felt like yesterday that I was sitting back in my office chair, reading an article from the March/April 2015 edition of deBanked Magazine, composed by Ed McKinley, a man with nearly 40 years of journalism experience.
McKinley began a discussion about a “year of the broker,” based on analysis, interviews, and criticism of the mass new entrants of brokers into our space within recent times. I have spent the better part of this year continuing this discussion both here on deBanked and within our industry circle, with discussions that have been both conventional, out of the box, and even at times peculiar. Speaking of peculiar, this brings us to the opening of this discussion, in which I must quote RuPaul.
RuPaul once stated that, “life is about using the whole box of crayons.” In my opinion, if you can figure out the profession of sales, you can pretty much figure out most of everything there is to life. And if RuPaul is right in that life is about using the whole box of crayons, why do so many of the mass new entrants of brokers within our industry, believe they are going to properly sell a merchant without using the whole solution?
It’s common knowledge that every individual crayon provides its own distinctive color, which in and of itself creates its own distinctive value, as value in this case is based upon where the color fits on the page to provide its role in the total coloring scheme. But just like crayons, every part of our alternative financing solution provides a distinctive value that altogether creates the whole solution for the merchants we serve.
(Q) + (S) + (P) = THE WHOLE SOLUTION
The Whole Solution equation is based on three letters. “Q” stands for Quality, “S” stands for Support and “P” stands for “Pricing”. How many brokers within our industry focus only on offering the “Q” and “S” portion of this equation, without the “P” portion? How many brokers within our industry focus on offering the “Q” and “P” portion, without the “S” portion?
QUALITY
Quality is all about bringing to the merchant what they deem to be value, and in our space (alternative financing) that means capital when they need it. Thus, you should have a comprehensive resource network of alternative financing products from merchant cash advances, alternative business loans, equipment leasing products, factoring, purchase order financing, and more, with approval amounts that can solve the working capital needs of the merchant. This creates value.
SUPPORT
This is all about your professional competency, merchant servicing and merchant education.
- Professional competency is all about you and your team having knowledge of the industry, the various products, the competing products, the market trends, understanding your merchant’s industry, and understanding how the product could help (or hurt) the merchant in achieving their operational objectives.
- Merchant servicing is all about providing tools for your merchant to manage their account with you, such as online access to statements, balances, transactions, or at least providing such information in a monthly statement. It also includes having easy access to live support agents during business hours to properly handle merchant questions, payment issues, collection issues, as well as there being an option for payment modification if a situation warrants it.
- Merchant education is all about educating the merchant based on the big data analytic information that you have currently, and how they can use this to help their business in various areas such as how to qualify for more conventional financing, better marketing strategies, etc.
PRICING
In our industry, proper pricing is based on utilizing risk-based pricing, which is to price a merchant based on their paper grade. This can only be done after efficient pre-qualification of the merchant to understand where they stand.
Some merchants have low risk measurement, thus, they are A+ Paper and A Paper. Some merchants have moderate levels of risk, thus, they are B and C Paper. Then some merchants have higher levels of risk, thus, they are D and E Paper.
A+ Paper: Should be priced similar to a P2P lender’s pricing schedule, which includes longer terms up to 60 months. These terms and conditions mirror that of a conventional loan.
A Paper: Should be priced on 6 – 18 month payback cycles. The shorter ranges of 6 – 8 months having 1.09 – 1.20 pricing, 9 – 10 months having 1.22 – 1.24 pricing, 12 – 15 months having 1.25 – 1.32 pricing, and 18 months having 1.28 – 1.35 pricing.
B and C Paper: Should be priced on 6 – 12 month payback cycles. The shorter ranges of 6 – 8 months having 1.22 – 1.26 pricing, 9 – 10 months having 1.28 – 1.30 pricing, and 12 months having 1.35 – 1.45 pricing.
D Paper: Should be priced on 4 – 7 month payback cycles. 4 – 5 months having 1.28 – 1.35 pricing and 6 – 7 months having 1.40 – 1.45 pricing.
E Paper: Too high of risk to usually find a decent approval.
FINAL WORD
I usually debate other sales professionals (within our industry and outside of it) in regards to selling the whole solution.
Some believe that if you put majority of the focus on quality and support, then you can literally price your client however you prefer, including well above their marketplace pricing.
Some believe that if you just focus on providing the lowest price, then you can get away without having the best quality and support functions.
Both of these approaches are selling the partial solution, but the whole solution should always be the best solution as it provides the best in quality and support, while tying in a proper pricing model for the client based on their standing in the marketplace. This leads to client longevity, loyalty and stickiness. That’s why I believe the best approach is to sell the whole solution.
