Wait, what was the math on those ISOs?
A buddy of mine got hired to do biz dev for a new upcoming funder. His job was to go out and recruit ISOs, use the company card to schmooze, and allocate a modest sum of the company's marketing budget. One of the things he used for marketing only cost $1k/month which was designed to drive inbound calls and web forms from interested brokers. Beyond that, he went about the hard work of visiting shops, making calls, and using social media to try to bring in deals and partner signups.
At the end of the year, the company asked what the ROI had been on the $12k in marketing, but he actually wasn't sure. He thought maybe like 40 ISOs had actually reached out but that only half signed up and only 8 became really good ones that funded deals with them regularly, albeit it did take the usual amount of work to get them to do that. One exec focused on the top line number. "Only 40 ISO engagements in a whole year?! I would've expected thousands!" And so the company collectively decided to strip the $12k annual expense from the budget because hearing from only 40 ISOs in a year seemed ineffective.
Later, when investors asked to rank their ISOs from most profitable to least, they had to go through all the math, the average deal size, factor rate, commissions paid out, write offs, submitted-to-funded % etc. Of the 8 aforementioned ISOs in the list, they collectively generated about $25 million a year in revenue. Even though none of them were the company's largest partner, they still contributed a few million in profit each year to the company. Not bad!
Naturally, the investors asked what they were doing to get more ISOs like those.
"For just those? Oh we stopped paying for that because it cost too much," the team replied.
"How much are we talking about?"
"$12,000!"
😮😮😮
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