Indigo PaymentsBusiness Case
Executive Summary Indigo Payments was founded in 2007 by two
executives by RBS Worldpay one of the largest credit card providers in the world at that time. Indigo is an Iso of Wells Fargo and provides credit card services for small to medium size businesses. The main processor in which Indigo process thru is First Data which is headquartered in Atlanta, Georgia. Indigo’s primary business function is to sale merchant credit card services, provide excellent customer service and to ensure that sales orders are processed through to completion.
Executive Summary Indigo offers a guarantee to never raise
their client’s rates. They require no start-up fees. They also will not charge an etf (early termination fee) if their clients decide to leave. In a very mature industry this is one of the greatest selling points and driving factors for the business. Provide a true and honest business in an industry known to over charge and take advantage of its clients. Indigo is different in almost every facet in regards to treating merchants fairly and cost conscious.
Mission Statement Modern technology coupled with old-
fashioned values. A place where relationships are sacred and business barriers are removed. Where each transaction is a handshake and every solution delivers real results. From terminals to mobile devices and robust POS systems, Indigo simplifies payments, automates your operation and transforms your bottom line.
Target Market SBS (Small Business Segment) Merchants
that process > 1,000,000 in credit cards annually.
Medium size merchants that process < 1,000,000 > 10,000,000 in credit card sales annually.
Retail, Restaurant, Moto(Mail, Order, Telephone Order), Lodging and E-commerce Merchants.
Referral Partnerships and Account Managers
Market Analysis
Indigo’s Transaction Volume
2009
2010
2011
2012
2013
2014
10,178,000
12,212,000
14,215,000
16,247,000
17,289,000
21,372,000
Transactions
Transactions
Transaction Breakout
Competitors
Competitors ISO’s (Independent Sales Office) are direct
competitors. MSP’s (Merchant Service Providers) direct
competitors that offer more service to their merchants.
Payment Gateways are indirect competitors who generally can offer better rates if you go with one of their partners or registered resellers.
Acquirers and Processors direct competitors in that they can provide their own merchant services at reduced rates as they are the processor.
Software providers are indirect as they generally sign up with specific processors for their software to work. If you can not process thru that processor you can not sign the merchant.
Indigo’s Approach Indigo’s approach to grow the business has
been driven by providing cheap pricing based on cost plus interchange and not handcuffing clients with high early terminal fees. Indigo has continued to grow their merchant solutions portfolio thru referral partnerships and thru account managers who serve as first line customer service representatives for the merchant base. Indigo wants to expand their presence within the referral sales space.
Indigo’s Challenge Indigo’s close ratio over the past 5 years
is 21%. Management wants t0 average a 33% close ratio and to grow the referral business by 30% year over year.
Currently the systems in place do not allow for efficient referral tracking or recording of referrals.
Indigo lacks the programmers needed to create and manage a complete in house solution at this time.
Referrals
2010 2011 2012 2013 20140
50
100
150
200
250
300
350
400
ReferallsWon Lost
Referral Process Today
Referral comes in via email
Referral is keyed into
access prospect
log
If statement analysis is requested
it is analyzed
The analysis is
sent to Account manager
when complete
d
The statement analysis/referral is place on
excel spreadshe
et
The account manager can either
sale or move on from deal
If deal is closed
you have to check
access for new deal
Mark excel
spreadsheet that deal is closed won
Referral Process Upgrade Two Options are available to refine the
process and pay immediate dividends Netsuite CRM tool Salesforce.com CRM tool
Netsuite Netsuite offers a low end solution for hosting
a cloud based CRM tool for reporting and referral management. Netsuite will charge $22.00 per month per internal user license. There is also an annual hosting fee of $7500.00 for the current volume that is expected to be using the system. For complete customization there is an additional $2500. fee attached to the costs. The external user licenses are all inclusive at the current rates for referral partners.
SalesForce.com Salesforce.com offers a robust cloud based
system that will allow for multiple phases of the sales force to be setup within the system. There standard costs is $25.00 per user license internal and external users included. There hosting fee is $12,000.00 a year which includes all customizations and portals. There are several classes/courses available throughout the year for training and programming solutions.
Referral System Costs
Referral Estimates For 2014 we will take the 33% expected close
ratio which is 121 accounts and subtract 88 which leaves 33 additional accounts. We take the assumed average number of transactions based upon the total number of merchants (4,000) and divide them into 21,372,000 which leaves 5343. Multiplying the 33 accounts by 5343 you get 176,319 transactions. We will use $100.00 as the average ticket so that we can take the $0.35 cent as our expected income.
The expected income generated off the 33 additional accounts would be $61711.65.
Referral Estimates
Total Referrals Closed at 21% Closed at 33%0
100
200
300
400
500
600
700
800
900
201520162017
*Based on 30% growth year over year.
Referral Estimated Income
Additional Costs At this time Indigo does not employ a full time
computer programmer or application support technologist. To assist in this project we would need to add an technologist as a temp or outsource the project to an IT group that specializes in designing and implementing the new CRM tool. In utilizing a consultant firm to assist in implementation the time period that has been slated has been quoted at 6 weeks at $18,000.00. In utilizing a temp hire at the price of $72.00 per billing hour to agency over 6 weeks would be $17,280.00. As we do not know unknown variables and if a single one person entity can handle the project over a 6 week time period the estimated cost has been spread over 3 months/12 weeks. The estimated costs would be $35,000.00
Costs against Expected Income
Where Do we want to go? As Indigo continues to spread it’s wing and
grow it is important that the systems and tools are in place for the present and for the future. As Salesforce.com is an optimal system as it stands it will allow for better referral tracking and entering of leads. It will allow for ample reporting and for expansion of additional items. Currently the systems in place require multiple manual processes utilized the Microsoft product suite. While Microsoft access is a great tool to have and use it does not provide the solutions and automation that will allow for the continued growth that Salesforce.com will allow.
Conclusion Whether now or later Indigo will need to
invest in upgrading it’s systems so that it can continue to manage their merchant portfolio regardless if they want to fully implement a referral tracking system. The tracking system is a major point of selling as it allows for a robust selling pipeline something that currently does not exist. To allow for a quicker growth I believe that it is imperative that Indigo looks into upgrading their systems immediately.