Bill Lodes, Executive Vice President of Business Development & Strategy at First American Payment Systems, sat down with Software Business Growth to discuss how payment processing offers value beyond recurring revenue and talks about how it can also help ISVs build stickier relationships with their customers.
How can payments help form stickier relationships between ISVs and their customers?
Payments are an easy and attractive feature to bundle with your ISV offering. For customers, payment processing is one of the most fundamental aspects of running their business. When it’s integrated within your platform, you’re adding a differentiator that commands their attention. Your solution becomes a vital part of their day-to-day operations. Suddenly, it gets easier to sell against a standalone terminal mentality. Disparate systems are less of a threat, even if they were there first. Of course, that’s just the starting point. To achieve sustained customer loyalty, your integrated payments solution has to deliver on its promise.
Enter integrated payments.
This embeds secure, omni-channel payments acceptance within your software functionality. Transactions are funded faster, creating happier clients. But there is no one size fits all. Before saying “yes” to any type of integrated payments solution, do your due diligence.
- Why are you adding this functionality?
- What does it give your customers that they don’t already have?
- Will it require customer hand-holding on your part, and if so, are you prepared for the opportunity cost of new business lost?
As an ISV, differentiation and service integration are important to the longevity of your business. Equally important is to be strategic in your integration efforts, focusing on what adds inherent value to your customer.
Integrations alone don’t enhance customer stickiness. In fact, fewer business decisions can erode your client base faster than an integration executed poorly.
Payment integration can be an incredibly powerful tool for ISVs, with the caveat that it is not a commodity decision. ISVs must take a long-term view, carefully vetting any would-be payment processors, if they are to minimize risk and position themselves for growth.
Any payment processor worthy of your attention should be able to answer your hard questions. After all, this is the client pipeline you’ve built and nurtured, a group that can just as quickly drive self-referrals as they can send would-be clients running for the door.
What kinds of conversations should ISV customer success teams be having with customers related to payments?
The most effective customer success teams are always listening for the pain points related to your solution. They initiate conversations about how your customers are paying, how they want to pay, and where your software falls short.
Successful ISVs thrive on this information, continuously thinking about what might send customers scrambling for the competition. More often than not, payments are an area of customer contention.
Your customers may be wary, and rightly so, of potential changes to your payment processing methods. The most effective conversations will be candid, inviting customers to shed apathy for openness in assessing their current situation. To encourage that, your success team must also be willing to field hard hitting questions from customers, and they need to answer with more than the company line.
How would YOU answer these questions from your client base?
- How is this better than what we have now?
- How complicated will it be to change?
- What happens when problems arise? (and they will, no matter which payment processor you are evaluating or what they tell you).
Taking the time to have these conversations in earnest is mission critical. That’s why these customers signed on with you in the first place. Feature dumping never created a loyal customer.
From a customer retention standpoint, what do you see your top ISV partners doing better than their competitors?
They share the philosophy that their software platform is in a constant of evolution. They are also very intentional about any changes they make to it. They opt for low risk, high adoption integrations – like payments – building both capital and customer loyalty to stand out within their vertical.
This is where meticulous attention matters most. Discerning ISVs seek differentiation, not parity, in the services their potential payment processor can provide. They don’t settle for traditional back end processing alone. Instead, they prioritize integrations that need no explanation to the customer – their value is that obvious.
ISVs familiar with their vertical already know what payment barriers exist – those who rise to the top (and stay there) are the ones that remove them, delivering solutions across the various forms of payments acceptance, with security standards to match.
These ISVs are also pragmatic. Instead of trying to solve every payment problem out there, they focus on three of the most pervasive and profit sensitive concerns:
- safe, highly secure methods for storing card data
- a scalable means of updating expired card info
- the ability to accept recurring payments
The ISVs that will flourish over the long haul are also keenly aware of the fact that their work is never done. As they thoughtfully and strategically adapt their platform, they will also hold their payment processing partners to task – the very definition of a fruitful partnership.