Changing Core Beliefs in Merchant Acquiring: A Conversation with Guy Harris, President of North America, Elavon
Recently we had the opportunity to speak with Guy Harris, President of North America at Elavon, about Elavon’s general approach with its customers. In this Q&A format, we cover topics such as how the industry has evolved in its approach to customers and how Elavon is changing its business practices to become more customer-centric.
As President of North America at Elavon, Guy Harris has direct responsibility for the leadership of Elavon in North America, where he oversees strategy, profit and loss and growth.
Prior to taking on his current role, Guy served as Executive Vice President and Managing Director for Elavon’s Western, Central and Southern European regions. In this role, Guy successfully grew revenue by 15 percent, per annum, through the employment of a value-based, customer-focused approach.
Before joining Elavon, Guy was Vice President of Global Sales for Misys, a leading global supplier of IT solutions to the banking industry. He also served as Sales Director at CR2, a leading multichannel, global, banking software provider, where he played a key role in increasing sales by 35% compound growth per annum, and as Managing Director at Banctec, a business process outsourcing company. Guy holds an Ordinary National Diploma in Business Studies from Kingston College.
What are some of the beliefs you see in the market, and how are you trying to change these opinions?
I believe the acquiring market has managed to craft a language it uses to express and explain its market, but we’ve lost touch with our customers along the way. For instance, we’ve renamed the customer a “merchant.” So for instance, if you are a coffee house, you don’t see yourself as a “merchant” because you run your coffee shop. However, the industry categorizes these businesses as “merchants,” and they each have a “MID” and a “TID” – irrelevant and very non-customer-like terminology for any business.
That terminology is indicative of the way the industry treats customers holistically – more as numbers rather than people. What I saw in Europe, and I see in the U.S., is an acquiring business that may not necessarily come across as customer-centric. One way we’re changing that at Elavon is by rethinking our approach and the customer experience. For example, formerly, if we needed to re-price a customer, a pretty stern letter was distributed blaming a third party for the re-pricing event. Now, we’re being transparent and thoughtful and showing our customers the value they receive from choosing us. It’s an approach not unlike my cable TV company in the U.K.: they write to me every year with a lovely, glossy thing with pictures of the programs, and say, “Great to have you as a customer. This year we’ve introduced six new channels, twenty-two new films, the sports, rugby, etc.” And at the bottom it says, “Your monthly fee has gone up by £2.” So as a customer, I get to that point, and I say, “Oh yeah, okay, it’s gone up by £2, but look what I’ve got.”
Yet another opportunity where we can provide a better experience is managing how we communicate on the topic of fraud monitoring. The first policy in an instance when fraud is indicated is usually to suspend settlement for the transaction, but there are many inconsistencies with managing customer communications about the suspension. What we really should do is tell our customers “Look, sorry, you need to understand this is what happened, we just needed to check with you, we apologize.” Simple steps like these will help us. At Elavon, we’re taking these steps and many more to put our customers first. We’re not calling business owners “merchants;” we’re calling them “customers,” and our approach is to listen to their needs and provide solutions that help them grow. It’s new for us, but we realize customers have choices and we want them to choose us.
What other core misperceptions do you believe exist in the market today?
I believe acquiring is a value-based proposition, not a commodity. But to a certain extent, our industry has allowed it to become too commoditized. We’ll say, “How much are you paying… whatever it is and so-and-so?” I go back to if I’m a customer and I own a coffee shop, I care about how much I pay for something in the sense of whether it’s disproportionate for the service I get. However, I’m not obsessed with needing to get it down to a 0.5% to acquire a service. What I’m most interested in actually starts when you first meet the sales person and if the sales person is focused on selling what the customer experience is about. There are certain fundamental questions related to the customer experience that often are not commodities, such as:
- “Is my money paid on time?”
- “Is the acquirer able to understand what my business is and what I am doing?”
- “Am I dealing with a company that’s friendly and helpful?”
- “Are they easy to do business with?”
- “Can I get a hold of them when I have an issue?”
- “Are my statements clear so I know what I’m paying every month?”
These may seem like commodities in today’s world, but at Elavon, we consider these value-based services. Furthermore, it is often not about pricing, although there are certainly exceptions to this.
Even though pricing per se does not play a heavy factor in many customers’ decisions to change providers, is there an aspect of your core beliefs that impact how you go to market related to pricing?
This philosophy and approach impact every part of the business, including the approach to pricing. RFPs are an example of this. In the past, nine times out of ten, we responded to an RFP with having hardly ever met or done any real, what I call, discovery work about the customer’s pain point. We’ll get some direction on where the price should be, put a price in, and then go back to the company and say, “Here’s the price!” We will not respond to RFPs now unless we understand exactly what would make the customer change, other than what price they would seem to accept. We have a very clear strategy now that we only respond if we’re genuinely engaged with a customer.
On the smaller customers, it’s really about managing their expectations. If I’m a customer and an acquirer tells me it is going to cost me $80, and it’s now costing me $120 a month, then I feel as though they’ve lost my trust. And so if we say it’s going to be approximately a certain amount, and it isn’t, you still lose that trust with the customer. I think acquiring, based on pricing smaller customers, has a way of trying not to be as precise as it needs to be. There are a lot of reasons for this, whether it is chargeback fees, downgrades, or others. If we are able to do anything that takes complexity away and allows the customer to be able to sign something and feel comfortable, that goes hand in hand with having a great customer experience. Additionally, if you set off on the right foot with a customer, then I think the likelihood of keeping that customer increases over a period of time. This is where, in positive ways, Square and the disrupters have brought a real focus to the industry that is forcing acquirers like us to think about how they engage and interact with their customers as well as new customers.
What other legacy industry perceptions are you trying to overcome?
I think many acquirers suffer from far too high attrition and we all believe there is not much to solve for in this challenge. We spend more time winning customers than we do keeping those customers. To counteract this long-term trend, Elavon has a leadership team that includes someone that focuses on the customer experience and whose job is to manage our customers.
When we look at our customer base, we are truly tackling the questions of who are the ones likely to leave and what should we put in place to stop it. Before, we would wait until the customer was leaving. We had what’s called a BRU-Business Retention Unit. The unit was very reactive. I believe in reaching out to our customers on a regular basis, talking to them. I’ve heard from many in the industry that this is an unsound policy- there are a lot of people that say, “Don’t wake the customers up, if they’re transacting, leave them alone.” I don’t believe in that approach. So we’re putting in place a team of customer account managers that will look after all our customers. So every single one of our customers will have a contact at Elavon – every single one.
So looking after our customers, keeping every single customer longer, making it easier for them to do business with us, are all things that will drive growth within our business as opposed to just chasing after loads and loads of customers. Although we cannot ignore new sales and it will remain a very important part of the business, we need to be better than that. I think this change in philosophy is just the start, and it’s making Elavon relevant, exciting, and helping us grow in the marketplace. I think we have been seen by some as a sleeping giant—a large organization with capability that it hasn’t executed on. We are changing dramatically, we have largely a new management team, and we are going to be very relevant in the market for a very long time to come.
Interview completed by Scott Calliham, Principal, specializing in Merchant Acquiring, email@example.com.
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