There are a lot of different ways to pay a sales staff. There’s the usual hourly and salaried income that most jobs offer, there are commissions that pay out for each sale, there are payments per-click or per-view for sales partners who run the company’s ads, and then there’s the residual income approach.
Sometimes, merchant service and payment processing companies (among other industries) will offer partnership programs based around referrals and residual income. The idea is that if you can talk enough merchants into using the merchant service company instead of their previous provider, you will get a percentage of their net processing revenue for as long as they use the service and process a certain minimum payment volume. You will have some responsibility towards keeping the merchant happy with the payment service, but getting them to join is the hard part.
The advantage of the residual income approach is that, while a commission might offer a larger lump sum, monthly residuals offer a more stable income. Merchant sales volume can go up and down from one month to another, but a company (or network of companies) big enough to meet the volume minimum should have fairly stable monthly sales numbers.
Not only that, but the consistent income represents an ongoing relationship not just between the merchant services company and the merchant, but also between you and both parties. You have a vested interest in the success of this relationship, and so it can help both sides to have someone looking out for it and making sure it keeps going successfully.
Another way to make money through merchant referrals is by creating a referral network of your own. If you build up enough accounts, you’ll have less time to seek out new ones, and so it can help to bring in someone else to start closing deals and adding more merchants to the rolls. Merchant processing companies will incentivize this sort of out-outsourcing by offering a smaller residual based on the income of the person you brought into the partnership program.
The sales and advertising industry has a lot of different ways to pay out, and each method offers different kinds of incentives. A consistent paycheck gets you consistent work but it doesn’t reward success, and while commissions reward success, they can also push a salesperson to prioritize expensive products over customer satisfaction. The residual approach offers a nice compromise between these two methods, and it comes with a built-in long-term relationship that makes customer satisfaction important.
Posted in Payment Processing on Apr 11, 2017