Wyoming Entrepreneur Blog

Interesting Bedfellows . . . Credit Card Processing and Market Research

There are dozens of credit card processors available, but start-up Swipely’s selling point is helping merchants better understand their customers, i.e. data. In addition to the credit card number and amount, the company collects and analyzes data about each and every transaction, stripping out any personally identifying information and grouping the data into customer dashboards that track daily and weekly sales and show which card numbers bought what and when.  The system will even tell you how a particular rainy day affected your profits.  In addition, they synch with your merchant social accounts so you can see how campaigns on Facebook or reviews on Yelp affect your business.  The concept is to equip small businesses with marketing information and strategies to create loyal customers.  Combining credit card acceptance with analytics and marketing tools, allows merchants to essentially convert credit card acceptance fees into marketing investments. 

How much for your business to obtain all these additional analytics?  Swipely offers to match whatever you are currently paying for credit card processing.  The analytics, marketing tools, customer insights and loyalty reward programs incur no additional costs. 

Swipely software works with most POS systems, and processes most credit cards.  Information on each card swiped goes into a CRM customer database.  That data will show the business owner which card users are new versus repeat customers; which are top spenders and when they normally visit; and, for the 20% of customers who are willing to give merchants their name and email,  how to contact and reward top customers to keep them coming back.  In addition to processing credit card transactions, Swipely also provides information about daily performance, who is buying their products and how often they are buying, plus the businesses’ online reputation. 

The loyalty marketing tools, help small businesses sponsor programs similar to those sponsored by major national retailers.  To encourage wary customer to provide personal information to a relatively unknown service provider, Swipely provides merchants with a “marketing manager” that allows business owners to upload company customer email lists and send invitations to customers to join
the new loyalty program.  Traditional loyalty programs require significant effort on the part of the merchant to track purchases and reward customer when they reach specific goals.  Swipely eliminates that merchant effort by automatically tracking customer expenditures and automatically dispensing cash rewards billing the merchant for the rewards at the end of the month. 

Think about your small business having some of the marketing advantages of Amazon.com.  If your company grosses over $30,000 in credit card sales per month and tends to have frequent repeat customers and a healthy social network following, Swipely may be a good partner for your business. 

If you go this direction, let me know how it works out!

MOBILE CREDIT CARD PROCESSING FOR DUMMIES

Strange that someone who still possesses a "dumb phone" should be writing about processing credit cards on a mobile device!  But credit card acceptance is a necessity for all businesses today, from doctors to convenience stores.  And, having the ability to process a customer transaction on a mobile phone provides even micro businesses with critical credit card acceptance ability. 

Merchant service companies can now convert smartphones and tablets into mobile credit card acceptance portals with little effort or additional investment.  For mobile businesses or many home businesses, the ability to accept credit cards via a mobile phone saves time and makes money. Not only is this a very efficient way for your business to get paid, but it also saves your customers the time, money and effort involved in paying your invoice at the end of the month. Examples of the types of businesses for whom mobile credit card processing is an asset include hair stylists, landscapers, house and carpet cleaners, mobile food trucks, outside sales representatives, farmers’ market merchants, and many more.  This innovation has resulted in decreased exposure to credit card fraud, PCI non-compliance, charge backs and the added costs of “keyed” transaction fees.

 

After deciding what processor you want to use, you will be required to complete a merchant application.  Upon acceptance of the application, the business owner will be able to download the mobile app and secure log-in credentials allocated for the business’ depository bank account.  A card reader will plug into the audio jack of your mobile device to swipe customer cards, which will populate the mobile app with the cardholder information.  All the business has to do is swipe the customer’s card right on the smartphone, have the customer sign on the touchscreen, and then email the customer a copy of their receipt.  Your cell phone,accompanied by a mobile credit card processing service, will provide real-time validation and payment processing, low rates, online account management, and the ability to email or text receipts back to your customers. 

Businesses should carefully examine the fee structure of the processor. Typically, you will be charged set-up fees to start, monthly service fees, and transaction fees every time you process a credit card.  Transactions fees are typically composed of two elements, the base rate and the processing rate.  Note that one service may have a low per-transaction fee, but the authorization rate may be high.   

Most apps will work with any popular mobile phone.  Every major service uses SSL encryption to be sure that sensitive information is secure.  Individual apps are typically password protected and include additional safety measures in the event of theft or loss of the device.  Credit card information
is never actually stored on the phone. These payments are typically safer than other methods of credit card acceptance because the card never leaves the customer’s sight and there are no imprinted receipts containing customer credit card information.    

For reviews of mobile credit card processors, go to http://credit-card-processing-review.toptenreviews.com/mobile-credit-card-processing/

Customer Retention The Old Fashioned Way – Using New Fangled Tools

One of the things I hear for business clients frequently is that they don’t understand how customers think today.  Actually times haven’t changed that much, but there are new tools that make keeping your customers happy actually work more like things did in my great grandfather’s time.  Back then you purchased from the retailer down the street.  You knew him and he knew you and your family.  There was a relationship, and with that relationship came flexibility.  The old “mom and pop” stores often ran tabs, gave discounts and remembered what their customers liked.   Then came the age of mass marketing where consumers were numbers and entries on a balance sheet, and the personal approach was lost.

 

What’s happening today is a return to the times when merchants and customers had personal relationships.   The difference is that technology has opened a window to enable these relationships to occur between people who are located a great distances from each other.   Karl Wirth, writing on the Marketing Profs website talks about the “7 P’s of Customer Retention”.  These are:

 

1.  People.   To retain customers you need to build a relationship with your customer as a person, not just a customer.  Start by hiring people who show they care about others.  Many companies now have a “chief customer officer” to ensure that the entire company maintains a people focus.
2. Product.   Without the right product, you won’t really be able to accomplish any of the “P’s”.  Make sure that your product provides value quickly, retains value over time and is of high quality.  Commodity items don’t generally have loyal customers, so make sure your product is special.
3. Place.  Location matters when you are locating a physical store, but if you are an online retailer, place still matters.  Your site needs to be easy to find, easy to navigate, and friendly to the customer.  What goes for “bricks and mortar” goes for online merchants as well.
4. Price.  If you have a relationship with your customer as a person, then you take care of each other.   The new expectation is that customers expect retailers to look after them.  This can be by providing deals for returning customers or by adding services or features without charging more.  Turn your employees loose and they will help you find ways to maintain this relationship.
5. Promotion.  You should promote to existing customers differently than you do to potential customers.  Why?  Because you should know them.  Target promotions to your customers based on their likes and needs.
6. Processes.  This is where the new technology comes in.  Where the old corner store owner new his customer by chatting with them when they came in, today’s businesses should use social media, customer surveys and other tools to engage and understand their customers.
7. Positioning.  Wirth says “If you want to retain your customers, you have to know who you are and communicate that clearly and repeatedly to them so they know who you are as well. Foremost, however, is this: Your actions must communicate your positioning. Those actions are showcased in the people you hire, the product you ship or service you deliver, the price you charge and the discounts you provide, the place and promotions you choose, and the processes you put in place.  Combined, your words and actions say "This is who we are and what you can expect of us."”
   
   

Bottom line: If you want to succeed with today’s customers, put on your great grandpa’s store apron, and adopt his attitude of treating his customers like friends and neighbors, rather than number and profit centers.  I think you’ll find your customers respond.  

What are you doing to retain customers in today's world?

 

Is Kickstarter a good way to finance my start-up business?

The answer is “maybe”, as it is too early to be sure especially with unanswered liability questions for funded failed projects. 

For those unfamiliar with Kickstarter, Kickstarter is a service supporting crowd funding for business opportunities.  How it works is a business (can be sole proprietorships) creates a project with a funding goal and deadline.  If it fits Kickstarter’s requirements they then post it where the general public can view the project and if they so choose, invest in it.  With a project, there must be some incentive for people to invest.  For the service, Kickstarter takes a 5% cut.  To pledge, one has to use Amazon Payments, which also takes a small percentage.  If the pledged amount does not reach your goal by the deadline, no money is taken (it is all or nothing).

The majority of projects are music, video and print productions with several classic video game remakes.  In Wyoming, several books, albums and films have recently received funding through Kickstarter. Clear Creek Brewing Company in Buffalo, WY recently received over $28,000 to finish their building remodel and buy furniture and fixtures to open up.  In return for investments, they offered an assortment of rewards ranging from stickers, your own chair/barstool in the taphouse (with nameplate) and other miscellaneous prizes. 

The reasons to be cautious with Kickstarter are mostly because it is new.  For example, although Kickstarter is not liable for funded projects that fail, and generally prizes have to be given, if a business fails it likely cannot follow through with business-related prizes.  The question being asked is whether the project creators are then personally liable to the funders, which could be a problem if the money was spent in trying to succeed.  The answer will probably come from courts or from legislation.  NPR recently reported on Ouya, a new video game console kickstarter project, and the possible failure fallout. Ouya, an open source game console, asked for $950,000 in pledges and the kickstarter campaign closed with pledges worth $8.6 million with 57,000 backers expecting an Ouya console by next March. It is unclear who would be liable if Ouya is unable to keep its end of the deal.

Whether Kickstarter is the right thing for your business will depend on what your business is, how well it can market its projects on Kickstarter and ultimately for you when comparing it to other sources of capital.  Keep an eye out for what happens as this financing medium receives new scrutiny from courts and lawmakers, especially if liability is a major concern for your business.

 

Jim Drever, MBA - Business Advisor (307) 766-3505 [email protected]

Choosing a Credit Card Processor

Unfortunately, credit card processors seem to have many areas where they feel justified to charge you a fee.  Different processors levy different fees for different services, and the fee percentages vary.  Thus, choosing a processor on the basis of cost alone is very difficult.

Merchant accounts are always charged a “discount rate,” a percentage charged on each transaction.  The amount is based on your company’s evaluated risk, average sales ticket, transaction type, and total charge volume.  Most providers charge one rate for card-present transactions and a higher rate for MOTO (mail order/telephone/Internet) transactions (card-absent).  Card-present transactions usually cost between 1.5% and 2%.  Card-absent transactions range from 2.2-3%.  Some companies levy a monthly minimum fee, ranging from $25 to $35/month.  If your volume is low, be sure to ask about this charge.  The merchant bank will also charge a “transaction fee,” that is between $.20 and $.30 for card-present transactions and $.30 and $.50 for card-absent transactions.  Some may also charge to issue monthly transaction statements.  

If all of those charges are not confusing enough, there are additional costs.  A basic terminal to process card-present transactions will run between $150 and $300.  Terminals with printers are $200-$500, and wireless terminals can run from $500-$1,000.  Alternatives include purchasing used equipment and leasing a terminal.  Access the Ebay “Credit Card Terminal Buying Guide” at http://pages.ebay.com/buy/guides/credit-card-terminals-buying-guide/.  You will have to be sure that any used equipment will work with the software that your processor is using.  For card-absent transactions, a terminal is not required.  You can use “virtual terminal” software to verify transactions from your PC.  Sometimes this software is provided free as part of an e-commerce package.  Purchase price runs about $150.

We’re still “not done yet.”  Some providers charge application fees of up to $200.  These charges may be non-refundable, even if your business is turned down for an account.  There may also be set-up or account activation fees.  Other possibilities include programming fees, Internet processing fees, customer support fees, early termination fees, and more. 

Some additional tips . . .  Be sure to ask how long it takes for funds to transfer.  MOTO transactions usually take considerably longer to clear.  Check to see if the variable fees such as set-up, cancellation, and monthly minimum, are negotiable.  The higher your dollar volume, the more likely the company will be willing to work with you. 

Customer support is an important part of the package.  You may want to check references with other merchants using the providers you are considering.  Also ask about wait time, chargebacks, staffing hours, and charges per incident.  If you are selling online, be sure that the processor offers secure ordering through SSL.  Finally, and probably most importantly, be sure that the company you are planning on working with is legitimate.  Check for their physical address and phone number. 

Read your contract very carefully.  Be sure that you understand all fess, minimum charges, the term of the agreement and any early termination penalties, in addition to.the services and policies of the providers you are considering before you choose. 

Credit Card Processing for Dummies

In 2011, $1.9 trillion were charged in the U.S. alone.  Online transactions were a major contributor to that figure.  Credit cards are now being used to pay for both large business-to-business transactions, along with $1 bottles of water at convenience stores.  Unfortunately, choosing a credit card processor is not a straightforward decision, due to variations in fees charged and services available.  

The first step is to research the different types of credit card processors.  Your bank is probably the first place to look, as they probably offer a business package that includes merchant services.  Most banks do not actually process credit card transactions themselves, but typically outsource the work to a third party credit card processor.  The bank will look carefully at your business before they decide whether or not to accept your application.  Another alternative is to use an independent sales organization (ISO).  These are registered credit card merchant brokers who may represent one or more third party processors.  They set-up and service credit card merchants, but do not do the actual processing.  An ISO may be less selective than the bank, but probably will charge more.  Be very careful when evaluating potential ISO suppliers.  Some are reputable, established companies that provide good customer support.  Others may be “questionable” operations. 

To qualify for a merchant account, the service provider wants to be sure that you are a legitimate business.  They will check the credit history of the owners or officers, and require credit references from your suppliers.  An important concern for the providers is whether your business is likely to have a high incidence of chargebacks.  A chargeback is a reversal of a sale that was initially credited to your account.  The chargeback may result from an error made by the cardholder's bank, a misunderstanding by the customer, or fraud.  Typically, the sale of tangible products is considered be much safer than the sale of services.  Providers will also consider the type of credit card transactions that you will primarily be doing.  Card-present transactions are sales where the merchant physically swipes the credit card and obtains a signature in person.  These are considered to be much safer than card-absent transactions that occur by phone, mail or online.  Being a higher-risk merchant will not necessarily prevent you from obtaining a merchant account, but it may increase your costs.

Intellectual property and small business

WYOMING BUSINESS TIPS

A weekly look at Wyoming
business questions from the Wyoming Entrepreneur Network, a partnership of
business assistance programs at the University
of Wyoming.

Intellectual Property and Small Business

Karen Kitchens, Intellectual Property/Documents
Librarian, Wyoming State Library, [email protected]

Knowledge and ideas have always been a powerful force in economic development.  As a small
business owner, Intellectual Property (IP) is a key consideration in your day-to-day business
decisions.  IP is an important component of the United States economy, and the U.S. is an acknowledged global leader in the creation of IP.  According to the Office of the United States Trade Representative, “Americans are the world’s leading innovators, and our ideas and intellectual property are a key ingredient to our competitiveness and prosperity.”[1]

Unfortunately, businesses often fail to protect their valuable IP because IP is not tangible property.  IP has no physical form.  Examples might be a method of doing business, an Internet domain name, or a company’s marketing material.  Often, this intangible property is more valuable than real or personal property. The commercial value of IP comes from the ability of its owner to control and exploit its use.  

The term “Intellectual Property” might sound a bit pompous.  But in reality, it is a very
good description for the proprietary interests of individuals and businesses, protected by the laws of IP.  The United States Patent and Trademark Office defines IP as, “Creations of the mind -
creative works or ideas embodied in a form that can be shared or can enable others to recreate, emulate, or manufacture them.”  Globalization of the world’s economies has significantly increased the need for information about IP.    

There are four ways to protect IP - patents, which pertain to pragmatic innovations; trademarks, which relate to commercial symbols; copyrights, which concerns artistic and literary works; and trade secrets, which consist of valuable business information that is not generally known and is subject to reasonable efforts to preserve confidentiality.  Some IP rights – copyrights and trademark rights are granted automatically upon creation or use of the IP assets without any action needed by the creator.  Other IP rights, such as patents, require action on the part of the creator in addition to considerable expense. 

This series will review the four types of IP rights and how each may affect your business.  For example, developing and protecting your IP assets and rights can give you an edge over the competition by discouraging unscrupulous competitors, developing new revenue sources, and increasing the
value of your company.  IP is a valuable business asset that must be managed and protected like any other asset.

 

For more information about the
services of Wyoming Entrepreneur, or to ask a question, call 1-800-348-5194,
e-mail [email protected] or write 1000 East University Avenue, Department 3922,
Laramie, WY 82071-3922. Additional help is available on our website www.wyomingentrepreneur.biz.

 The Wyoming
Entrepreneur partnership program is funded in part through a cooperative
agreement with the U.S.
Small Business Administration. Additional support is provided by the Wyoming Business Council and the University of Wyoming.

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[1]Special
301 Report Finds Continued Progress But Significant Improvements Needed. 2004.
Office of the United States Trade Representative Archive. 30 May 2012 <http://www.ustr.gov/archive/Document_Library/Press_Releases/2004/May/Special_301_Report_Finds_Continued_Progress_But_Significant_Improvements_Needed.html>.

 

 

 

 

Website Drudergy; Are you willing to change?

Websites are a real hot topic these days because they are your word of mouth, your advertising and your customer service all rolled into one. They are really a new model for management. The trouble is they are always changing. We used to build things to last, now we build things to change. We have to listen to customers and be willing to change to meet their needs. Google Gerry McGovern and read his Web Experience: From Built to Last to Built to Change article. Gerry is an international author and consultant on the subject of content management.

The old style of reading from left to right on a webpage is not how people view web pages anymore. Customers don’t read; they scan. They look at headings and subheadings first; they scan for hyperlinks, numerals, and keywords. They jump around, scrolling and clicking and their fingers never far from the browser’s “Back” button. Customers are very impatient these days.

The number one design principle for websites is simplicity. A website should be designed to make life easier for the reader to find content and then make it easy for them to read that content. The goal is to get the right content to the customer as quickly as possible.

If the content on your pages is scattered and poorly formatted, you have poorly named headings or if your content contains lots of fluff that makes it hard for customers to find information, they might just pass you by.

I talk to a lot of people about their websites, both businesses and web developers. The underlying problem I see from talking to business people is that they don’t really understand that they are ultimately responsible for the content on their website. Web developers really don’t know your business and will most likely not know how to market it for you. They don’t usually don’t have time to study up on the keywords, content and backlinks specifically related to your site. They will design a site for you, but YOU are responsible for giving them the content. You are responsible to provide them with keywords, titles and descriptions for your pages. Your images, videos, links and social media are all included in your marketing strategy. You need to take a proactive approach to site and tell them how you want to be represented on the web. So, if customers can’t find you, take a good hard look at your website and see where it could be improved. The Wyoming Market Research Center is here to help you with that process.

 

Your Company’s Name – It’s Where It All Starts

I’ve had a number of clients over the years ask me why their company never shows up on search engine results.  There can be any number of reasons why search engines aren’t “seeing” your website.  However, I’d like to discuss one that often times is missed in the rush to “optimize” a web site.  A key reason for search engine invisibility can simply be the name of your company.

When Google looks at a search term, it tends to first think of it as a brand before anything else.  Ann Smartly, writing on the MarketingProfs website (www.marketingprofs.com) gives an example of the results for the term “Armstrong”.  She indicates that most people would think of “moon”, “space” or “Tour de France”.  Most people would be wrong.  Google shows “Armstrong Flooring”, “Armstrong World Industries” and “Armstrong One Wire (an internet service).  The astronaut and the bicyclist follow these “brands”. ; As Ms. Smartly says, “Google seems to favor brands and is likelier to suspect that your intent is navigational instead of informational (go instead of know).”

One way of winning the war is to instead of fighting a battle against multiple opponents; try to make your brand name unique.  This can be challenging if you have a common name.  “Jones Consulting” would be a pretty poor choice.  There are a lot of companies with that name out there.   Renee Jones Engineering Consulting would be better, but with such a common name, you might need to look for a more unique usage.  “Rock Springs Engineering Consultants” would, as I write this, probably come up first in Google as there are no companies showing up with that name. 

The idea is to become the dominant interpretation of the combination of words in your company name. Google suggests that if you can make your name and brand stick together, you instantly become a dominant interpretation.  Using this concept, a company called Renee Jones Mining Engineering would likely rank number one on Google.

So there you have it.  Before you worry about optimization of your site, and certainly before you sign incorporation papers, spend some time searching names on the internet.  A unique business name can be an important first step in achieving online visibility.

Have you had problems naming your company?   Do you have a great name?

I have recently been contacted by a company offering to help my website to be found by search engines. Are these companies good or are they fraudulent?

Yes and no on both counts.  If you cannot manage your website’s search engine optimization yourself, here are some things to look for and to look out for in any company you hire:

First, I would be very cautious about companies coming to you, especially those who telemarket or send unsolicited emails.  If they are good at what they do they shouldn’t have to engage in push marketing (people would find them on the internet, right?).  The exceptions would be a familiarity with your industry, geographic proximity or some other compelling reason to engage in business with them.

The next often-omitted step is checking references.  If the business was referred to you, this might already be taken care of.  Find out what they were able to do for other businesses and see what their expectations are for your website and what they can do to improve your search engine rankings.  This is important, as there are different levels of competition for different terms.  For example, imagine trying to be on page one for a Google search on “iPad” vs. “Procurement Technical Assistance Center in Wyoming” and you can imagine which term would be easier to have better rankings for.

Find out how they seek your input and keep up to date with your search terms.  The search terms should not be industry jargon.  They should be the words your customers use, especially when searching for you, your product or service and these search terms should appear in your webpages.  Normally these terms change over time, so what will they do to keep up?  Will they monitor and report your rankings on important terms?

Finally, if you have the slightest concern that the company might use unscrupulous techniques, stay away.  The techniques I am mentioning are things such as using phony web pages that backlink to you, stuffing your pages with text the same color as the background (Google (or any other search engine)can read it in the code whereas your visitors will not see it) and other tricks.  When (not if) Google catches people using these techniques it will blacklist the entire site.  Being blacklisted means instead of just being on the fifth page of results, your site will never be found. 

If you have questions about Search Engine Optimization (SEO), how your site is doing or would like some help optimizing your site, please contact us at www.wyen.biz.