Walmart’s purchasing department is well known for using forceful and stern price negotiation tactics.
They often negotiate and “beat up” the vendors that they work with in search for higher profit margins for themselves.
During the vendor buying and negotiation process they frequently cite market research that supports their claim that a vendor price is way out of line and needs to be reduced.
Walmart marketing efforts consistently focus on price so it makes sense that they operate the same way with the people and companies they buy from to supply their stores.
Merchant Services Industry Rate Games
Many merchant account providers play rate games with prospects and that practice offers validation to the idea that it’s good to search for the cheapest rate and to buy from the company that guarantees the lowest rate instead of seeking out the provider that is going to offer the best value and take care of you when questions arise.
It’s not a bad thing to keep an eye on your rates & fees, I’m just suggesting not to make it the end goal.
As a merchant account user, you expect a certain level of service with your account since your business needs may change over the course of time.
When those needs arise you want someone to take care of your issues quickly and efficiently, right?
Setting Your Expectations
You don’t go to Walmart to buy a Rolex or a Ralph Lauren polo.
You don’t go to Walmart to be treated like a king or queen because it’s not what they are known for. Their ongoing business and customer service practice clearly demonstrates their position of how they feel their customers should be treated.
You go to Walmart for one reason: to get the cheapest priced product.
That’s it.
Don’t expect to always get a quality product.
Don’t expect to be treated like you’re a valued customer.
Don’t expect to be thanked for your business.
As a Walmart shopper you know exactly where you stand.
Similarly, what do you expect from a merchant account provider that guarantees that they have the lowest rate?
Industry Pricing Perspective
In the merchant services industry provider mark-up is how merchant account processing companies make money.
Base rate interchange costs are set by Visa/Mastercard and exist as a means of balancing incentives between cardholders and financial institutions. All merchant account providers adhere to these same costs.
This model exists in other markets such as office printing & copying, mortgage origination, fee based financial planning and countless other industries.
Every company that exists as a business to make money must do so in order to provide the product or service that they offer.
How you perceive the level of service that is provided to you at the current rates you are paying makes all the difference. The redundant process or haggling over and tirelessly negotiating over rates and costs from the viewpoint that you deserve the absolute lowest price becomes the grey area that I refer to as the race to the bottom.
The Race To The Bottom
Getting to the bottom is only a good thing if you are afraid of heights and somehow find yourself stranded on top of a skyscraper.
The bottom can also be compared to having nothing, as in no profit.
If you buy from a business that makes no profit off of you as a client, can you reasonably expect to receive good service, a quality product or to be valued as a client/customer?
How To Avoid It
No one likes to be mistreated or unvalued so leading off with a superficial topic like price is setting yourself, and the company that you buy from, up to fail.
Finding a merchant account provider that gives exceptional service without asking for an arm and a leg to do so should be your goal. There ARE providers out there that give good mid-range pricing with exceptional customer service and it’s typically NOT the ones that are advertising that they have the guaranteed lowest rates.
Seeking social proof of how they interact with their customers or modestly requesting to do a trial run, as in starting with a month-to-month contract are among several suggestions on how to establish a working relationship with a merchant account provider.
0 Comments