Before Merchant Account Solutions introduced an automated system that updates new customers on their applications’ status, the ISO found itself losing clients to competitors.

“We used to get a lot of people who said, ‘I went with someone else because I didn’t hear from you within 48 hours’” of applying, says John Kennedy, CEO of the Agoura Hills, Calif.-based firm.

Now, the automated system sends email messages to merchants as soon as they complete the online application and throughout the boarding process.

“Even though we’ve signed them and are about to book them doesn’t mean there aren’t other ISOs calling them at that time,” Kennedy says. “So, as soon as they apply, we let them know. As soon as it goes pending, we let them know. As soon as it’s booked, we let them know. That way, they don’t go and apply with someone else because they haven’t gotten a response for one or two days.”

The automated email notifications are part of the customer relationship management (CRM) system that Merchant Account Solutions built from scratch more than three years ago to improve customer service, internal organization and analytical capabilities. Such systems offer a variety of ways to track customer data and can automate customer-service functions.

Businesses of all sizes can benefit from using CRMs, including non-customized programs, says Adam Toporek, owner of customer experience consultancy CTS Service Solutions of Orlando, Fla., and owner of a website called CustomersThatStick.com. In fact, he uses an off-the-shelf CRM system in one of his businesses.

“Every customer-service representative in the business has detailed notes on the customer’s history,” he says. “That’s nothing exceptional for a large business, but it’s a source of competitive advantage for a small business.”

Merchant Account Solutions chose to build its own CRM program not because available CRM systems were too expensive or offered too few features but because it needed a system that was extremely easy to use, says Kennedy.

“Everything out there definitely met our needs,” he says. “Some of them are so robust, it’s overwhelming. We tried to make it essentially stupid simple. You look at it, and you know where you’re at. You know what to do. It navigates you through the software versus you having to learn it.”

Having a custom CRM system built was slightly more expensive than purchasing an existing system, Kennedy says, but the custom system improves control over the software and removes any limitations that may come with an off-the-shelf program.

The system helps Merchant Account Solutions optimize its online advertising campaigns and motivate salespeople, Kennedy says. The marketing department can see which keywords return the best results and even what time of the day is best to schedule the ads, thereby eliminating guesswork. Salespeople can see each other’s closing ratios, and Kennedy can make better management decisions because he knows which advertising campaigns are performing best.

He also gets a clear overview of applications and their status.

“It gives me a gauge really quickly on where we’re going to end up for the month.”

Merchant Account Solutions employs about 20 people, Kennedy says; he cautions smaller ISOs against building their own CRM systems.

“If you’re a five-man crew, I wouldn’t recommend to go build your own CRM program, but we have a lot of accounts to juggle, so the money was well worth it.”

Any CRM system is only as good as the data employees enter into it, says Loretta Jones, vice president of marketing for San Francisco-based CRM maker Insightly.

Jones suggests ISOs consider how they’ll persuade the staff to use the system before selecting one.

“We recommend you have your best salespeople test it out,” she says. “Because, in many cases, if your best salespeople really like it, the other salespeople will jump on it because they’ll see it as a tool that will help them make more money.”

An updated CRM system can also help reduce the costs of staff turnover, Jones notes.

“When a sales rep leaves the company, all of that data doesn’t walk out of the company inside the sales rep’s head. It’s already stored, so it makes it easier for another sales rep to come on board and follow up with that customer.”

Today’s technology offers the option to automate many customer service functions, but just because something can be automated does not mean it should be, Toporek says. In general, the best customer service tasks to automate are those that do not cause the customer to need further assistance.

“An email with a reminder of your flight time is perfect for automation,” Toporek says. “You don’t need to speak to an agent. However, if there’s a major problem and your flight is cancelled the day before it’s scheduled, that’s not a great candidate for a fully automated interaction. In that case, you’re going to need help. Maybe a call from the airline would be better, or, in a semi-automated fashion, an email with a priority telephone line where you can get to a human.”

Creating how-to videos to help merchants set up their accounts or troubleshoot problems before calling support may also be good candidates for introducing automation into customer service without sacrificing the customer experience, he says.

“Automation should always be a win-win. Companies and customers should benefit from it,” Toporek suggests.

But some disagree.

Green Payment Solutions, an ISO based in Los Angeles, for example, has made a conscious decision not to automate customer-facing service functions, says John Kim, director of business development.

“We pride ourselves on being able to tell our clients that if you call anytime during regular business hours, the phone’s not going to ring more than five times before an actual human answers the phone,” he says. “When it comes down to a discrepancy in this business, people are usually upset because it immediately affects them monetarily. There’s a lot of emotion involved. The last thing you want to do is bounce people around.”

Green Payment Solutions focuses on pursuing larger organizations in both the green and nonprofit sectors, and those clients expect service with a personal touch, he says, as do customers in close-knit communities in such places as the Midwest and Hawaii. Providing that personal touch requires fully understanding clients and their business models.

(An expanded version of this article is scheduled to appear in the November-December print edition of ISO&Agent.)

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