Poor Account Management: The Silent Killer of Payment Service Providers

Drew Edmond

July 10, 2023

Drew

The major global payment service providers (PSPs) are in perpetual competition to provide their target merchants with the highest quality of payments acceptance technology. However, one of the most common reasons that Glenbrook sees merchants leave their PSP has nothing to do with technology.

They leave due to poor account management.

Account management is the secret ingredient that can make or break a merchant’s experience with a PSP. In an ideal scenario, the account manager acts as a true partner to the merchant, helping them navigate and optimize the PSP’s solutions and acting as the merchant’s representative within the PSP. In this scenario, an account manager functions almost as part of the merchant’s payments team and adds value to the relationship with their insights into the PSP.

Too often, however, account managers fail to live up to this standard. In most cases, this manifests in a lack of attention to the merchant, or a lack of knowledge about the PSP’s solutions. This post focuses on identifying major examples of poor account management that merchants and platforms need to be aware of. It also highlights areas that PSPs should pay close attention to and address.

 

Why Do Merchants Leave?

There are many reasons why a mid-size or enterprise merchant might decide to leave their PSP. These include:

  1. Non-competitive pricing
  2. Too much unexpected downtime
  3. Poor authorization rates
  4. Slow product development and innovation
  5. Lack of geographic reach or local expertise

Most PSPs are acutely aware of these potential pitfalls and aim to address them in RFP responses, marketing materials, and their own commercial strategies.

Despite these issues, in our experience, poor account management can cause the highest level of dissatisfaction for a PSP’s customer. If there are multiple ongoing technical or operational challenges, poor account management further exacerbates the merchant’s perception of the PSP’s performance. Even with middling performance, poor account management can make a merchant dissatisfied with a PSP. Conversely, good account management can make some merchants overlook performance issues (to a degree). A strong account manager can save a customer relationship by handling chronic and ‘fire drill’ issues gracefully.

 

What Does Poor Account Management Look Like?

Complete Detachment

We have encountered numerous instances where leading PSPs overlook their relationships with major clients. The PSP operates on autopilot, assuming that the revenue will continue to flow forever. In such cases, the PSP stops engaging with the merchant by not scheduling regular meetings or conducting quarterly business reviews. This lack of communication can lead to customers feeling ignored. When customers start shifting their business to other providers who offer better support and maintain a strong relationship, the PSPs lose out.

Slow Response Times

The speed at which outstanding questions and issues are addressed has a major impact on the merchant’s efficiency in operations and development. When a payments operations, product, or engineering team has multiple projects in progress, they rely on their PSP for guidance. Slow or ineffective responses from Account Management can cause frustration within these teams, resulting in delays and decreased productivity. Upper management may begin to receive complaints about missed deadlines, which can lead to the payments team seeking out a new provider. Slow response times can happen for many reasons (usually more than one):

  1. The Account Manager is not sufficiently informed to answer the question themselves
  2. The Account Manager does not know how to navigate their own organization to find the answer effectively
  3. The PSP does not have a strong culture of available documentation for internal self-service
  4. The Account Manager is responsible for too many customers
  5. There are too few subject matter experts at the PSP for more advanced inquiries

Lack of Proactive Support

PSP customers function more efficiently and operate more effectively if they are given good information quickly. That applies not only to the response times we just discussed but also to information that is currently an “unknown unknown”. Conversely, learning about an important development without ample time to adjust roadmaps and resources to account for it is a common and painful merchant frustration.

Unfortunately, PSP Account Managers are not always up to speed on their customer’s needs and general industry trends. They may not understand their client, follow industry developments that may affect the client, and proactively surface relevant perspectives. Moreover, PSPs Account Managers are not always well informed about their full product suite, and as a result, fail to share relevant feature and service insights.

Poorly informed Account Managers lose out on an opportunity to upsell new products for more revenue, but they also fail to ensure the merchant is using current products correctly.

 

How Should PSPs Address These Issues?

Continuous Learning for Account Managers

The role of Account Manager is not easy. Some PSPs have a broad set of products to learn about. Large organizations can be difficult to navigate. The payments industry is complex and constantly changing. Different industry verticals have unique needs and characteristics.

Account Managers should have extensive training during their onboarding period, and ongoing training to remain up to speed on the latest internal and external developments. Escalation paths should be made clear and kept up-to-date. Self-guided learning is critical to stay on top of changes in the industry, and Account Managers should be expected to manage their own learning and development in addition to that which is offered by the PSP.

Aligning Incentives

If Account Managers are only incentivized based on upselling products to generate new revenue, they will prioritize these opportunities over ensuring a merchant is happy with overall service. Incentives should be multi-pronged and aligned with customer satisfaction, which can be measured by tracking NPS scores over time, or even simply in retention.

Tracking Touch Points

PSP Account Management teams should be tracking the number of touch points each Account Manager has with each customer they manage on a weekly or quarterly basis. Frequent touch points allow the Account Manager to stay updated with the merchant’s priorities, developments, and concerns. At the same time, the quality of these touch points is equally important as the quantity. Account Managers should strive to add value at every touchpoint by coming armed with performance metrics, sharing relevant insights, and anticipating the questions the merchant is likely to ask based on what they care about.

Forecasting and Monitoring Usage

Account Managers should be forecasting and monitoring the processed volume and usage of each product to determine if the customer has shifted behavior, which should be an immediate red flag that the relationship is possibly deteriorating or the merchant’s business is at risk.

Assessing Service Levels for High-Growth Companies

High-growth merchants start out as smaller merchants that typically receive “scaled” support models: self-service tools, lower-touch account management, non-dedicated customer support. If these merchants become successful, they eventually reach a threshold where they should start receiving enterprise-level support. PSPs should upgrade these customers before they think about leaving.

 

How Should Merchants (and Platforms) Address These Issues?

As the customer of a PSP, it is critical to actively manage the provider rather than passively accept poor account management. PSPs are working on the merchant’s behalf, so the merchant is responsible for maximizing PSP value. Merchants should firmly and respectfully communicate expectations and hold PSPs accountable. We are all humans; a degree of flexibility should be allowed, and expectations should be reasonable, but it is in the merchant’s best interest to set appropriate guidelines for the relationship. In a multi-provider environment, it is a best practice to assign volume sent to each provider based on various factors, including account management performance.

 

Conclusion: PSPs should prioritize account management to maximize customer retention and success

High-performing account management teams can have a monumental effect on the total payments volume for a PSP. The payments industry is small, and many people move around from merchant to merchant. A poor experience with a PSP can lead to loss at one merchant and a reluctance to work with that PSP again at future employers, hampering future growth potential.

If you are a PSP that is not following all of these best practices today, reach out to Glenbrook to discuss how you can better retain your existing customers.

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