The Green Sheet Online Edition
May 5, 2019 • 19:05:02
Choosing the right ISO partner - Part 1
Selecting a partner is one of the most important career decisions a sales professional makes. Having recruited for a super ISO for the last 18 years, I am writing a two-part series to share tips to help you choose the right partnership. An ideal ISO partner has integrity, a great product suite, high service levels and competitive compensation.
When looking for a new partner, you will be overwhelmed with options and big promises. Here are points to help you focus on the big picture:
- Products: Are the company's products differentiators or will they help you close deals? Does it have unique offerings that will give you something different to discuss with merchants? Does it offer solutions for multiple merchant verticals?
- Compensation: Is the compensation offered competitive but realistic? Large signing and activation bonuses aren't always indicative of a competitive program. ISOs are willing to pay large bonuses because they understand the long-term value is in the residuals. Situations exist where bonuses are needed, but the more the ISO invests in you upfront, the more long-term residual value you are giving up. For some, this can create an unhealthy cycle and forever keep you living on upfront bonuses. If you focus on residuals, you will build a more stable income that becomes an asset that can be sold.
- Service: Everyone will promise you the best service in the industry. Call an ISO's support line to test hold times and service representatives' attitudes. Also check online reviews, and ask to see their service level agreements for internal processes like approval times or a merchant bank account change. Ask if there are early termination fees on merchant accounts, and if so, whether the ISO will allow the partner to waive the fee, which would say a lot about the company's approach to servicing customers.
- Integrity: Everything mentioned above is secondary to this. Integrity also is one of the hardest attributes to assess. Start by asking your friends in the industry what they have they heard about the company and how it operates. Does it have hidden production quotas or residual minimums under which it stops paying your residual? Is it doing frequent, inflated price increases? Can partners waive price increase on their portfolios? Also, one of the best ways to assess the credibility of an ISO recruiter is to ask what the ISO's weaknesses are.
If the potential ISO partner passes an initial screening, the next step is understanding the sales partner agreement. Most such agreements are written in favor of ISOs. That's just the nature of the business. There are many things to be aware of. Here are a few of the top ones:
- Production quotas or residual minimums: Our industry is ultra-competitive. A company that requires a minimum production of deals each month for you to receive your residual is not a partner. The portfolio you have worked hard to build belongs to you, and you should be paid on it unless you violate the agreement for fraud.
- Selling your residuals: When you build up a portfolio, you have an asset you can use to borrow against or sell. It's essential you have the option to sell it. Some agreements require you to get written permission, which can be dangerous because you could be forced to sell it back to the ISO at whatever multiple the company decides to pay. Strive to obtain a first right of refusal clause, which will enable your ISO partner to make the first offer, but if you don't like it, you can sell it to a third party.
- Changes to the agreement: Some ISO agreements state the ISO can make changes to your agreement at any time without your consent. This is a strong indicator the ISO is unlikely to be an ideal partner
Hawkins Siemon is the founder and CEO of Elevate Payment Alliance. Elevate is an ISO founded on doing business the right way and building strong, long-lasting relationships. Our mission is to grow Elevate based on the success of its sales partners, merchants, and employees. This is why we have created the first ISO in the industry that offers ownership to both its Sales Partners and Employees. Contact him at hawkins@elevatepaymentalliance.com.
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