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Direct Response Marketing

Consumer Journey, Part 3: Paid in Full

1 Mar, 2017 By: Nicole Urso Reed Response

When it comes to the moment of truth — a consumer becoming a customer by making a purchase — technology, including evolving digital payment options, optimizes the experience.


So much time and investment goes into pitching a product, from demonstrating the goods or services to keeping shoppers interested up until they make a purchase — many small pieces that combine into a great whole, most of which has been covered in the first two parts of this Consumer Journey series (Response, January and February). But even when shoppers are ready to commit, there are important elements of the customer experience to consider.

In this round of the series, marketers talk about the purchase. In particular, payment processing — an increasingly complex phase of the purchase funnel given all the latest technology — presents major retailers and small business owners alike new opportunities and unique challenges.

Constantly Connected

According to the 2016 Global Mobile Consumer Survey: U.S. Edition, conducted by Deloitte, consumers consider their smartphones much more than a communication device. It’s a “hub” for all sorts of function and necessity. On average, people look at their phones 47 times per day (82 times per day for those between the ages of 18 and 24). At night, more than 30 percent of consumers check their devices before going to sleep, and about half of them pick it up in the middle of the night.

“Outside of work, shopping still ranks as the No. 1 activity during which consumers use their phones, with 93-percent reported usage,” the report adds. “Spending leisurely time and watching TV follow closely at 90 percent and 89 percent, respectively. More than half of consumers (58 percent) report they have used their phones to browse a shopping website or app, and more than a third (38 percent) say they do so at least once a week. Nearly 40 percent say they have used their phones to pay for products.”

When mobile shopping started to become a thing, performance-based marketers quickly picked up on multichannel opportunities — digital coupons delivered via email or text, and QR codes to help shoppers price compare at different retail outlets. Websites had to become responsive so that when TV commercials or radio spots aired, viewers could look up more information on their phones. The future was mobile, but businesses were trying to find the best way to bridge that offline-to-online shopping experience.

Today, omnichannel shopping has become so ubiquitous that consumers expect nothing less, and merchants are trying to keep pace.

“Consumers want every possible convenience, and they’ve been conditioned to expect that,” says Ned Canning, senior product manager at Cincinnati-based Vantiv, a leading payment processing services provider. “From a consumer standpoint, it’s phenomenal because I can buy anything on demand if I’m sitting on my couch, or walking past a store, or looking at my phone, but from a merchant perspective it’s increasingly difficult.”

Canning manages product development in omnichannel and payments acceptance for Vantiv’s e-commerce line of business. He’s behind cross-platform card-not-present and POS product consolidation for multichannel merchants, and the way he sees it, there are two major trends happening right now related to how merchants are reacting to consumer behavior. The first is coverage. Merchants want to be where shoppers may already be looking for them, and they want to offer the most convenient ways for those customers to buy their products.

Throughout this Consumer Journey series, marketing leads from companies including Nutrisystem, Vistaprint, and Adore Me talked about engaging consumers across a variety of digital and social channels and how to present them with captivating offers in those different scenarios. When shoppers are finally ready to purchase, the checkout process needs to be just as seamless.

Payments are not just transactions anymore. Customers expect security, expediency, and choice when it comes to checkout and fulfillment. With the variety of alternative payment choices available now, from Apple Pay and Google Wallet to Amazon Payments and, of course, PayPal, getting customers through that pay gate (wherever they happen to enter it) can be a daunting task, especially for small businesses.

“The commerce-wired consumer touchpoints — or tech devices, I guess you could say — are exponentially increasing, and so the complexity is also increasing from a merchant standpoint,” says Canning. “You have to be able to ensure coverage of those things.”

The other trend he sees from merchants as they adapt to new technology is the capacity for enhancement. What divides the leaders from the bystanders, he says, is how merchants interact with their customers.

“The leaders are figuring out how to leverage all these different touchpoints in a seamless fashion. They’re presenting a unified brand no matter how the customer interacts with them and in a way that optimizes that conversion process, that acquisition, that retention, that upsell process,” Canning says.

Big Picture, Granular Data

Every time a merchant introduces a new sales channel, it must think about the experience in full and create a cohesive view of a customer’s journey across all of them. Canning recommends looking at how customer data is saved as a good starting point. When a brick-and-mortar retailer moves from their point-of-sale (POS) to an online strategy, for example, it should have one system that stores customer data.

“A customer-centric system ensures that at the very least, the different touchpoints — retail store, mobile application — are all grabbing information from the same place, and they can be informed by each other,” he says.

When a customer purchases in-store, the merchant should be able to follow up with email offers to encourage another purchase online. Or, if shoppers purchase something online, they could be presented with a relevant upsell or recommendation the next time they visit a store. If a customer profile is continually informed, other sales and marketing opportunities will emerge too, like loyalty programs and referral rewards.

Data-savvy e-commerce brands like Warby Parker, Bonobos, and lingerie startup Adore Me are leading examples of how to create a cohesive shopping experience for customers, both in-store and online. Last April, Adore Me opened its first retail showroom at its headquarters in New York where customers could receive a free fitting, order in-store, and have the items shipped directly to them.

Adore Me has also been building its retail presence by partnering with Nordstrom last June and then with Lord & Taylor in October. Adore Me is available online at both retailers, as well as several Nordstrom stores and Lord & Taylor’s Manhattan location.

When Adore Me partnered with Lord & Taylor, founder and CEO Morgan Hermand-Waiche said that although women enjoy shopping for lingerie online, there is still a very large audience who wants to try on the product first. In addition to easy returns and exchanges online, creating an in-store experience was the next step in addressing customer needs.

“Adore Me was started with the clear vision of redefining lingerie to make beautiful and affordable fashion for everybody,” Hermand-Waiche said in the announcement. “Our four-figure growth rate shows how strongly this message resonates with our customers, and how agility is an integral part of our DNA — fast fashion and fast growth.”

Good Experience, Better Business

For Doug Garnett, the founder and CEO of Portland, Ore.-based Atomic Direct, the one issue that outweighs others when it comes to payment processing is creating trust.

“Performance-based marketers driving direct consumer response face an unusual challenge in payment processing,” says Garnett, a member of the Response Advisory Board. “Because no matter how many subtle service advantages a processor brings, the single most critical factor affecting your business is consumer trust in the payment.”

For large online retailers, he says, there’s already an inherent trust from consumers. Performance marketing businesses, however, are often interacting with their consumers for the first time, and they are more cautious about giving out their personal data and credit card information.

“For myself,” says Garnett, “when first buying from a small marketer I look to use PayPal for two reasons. First, I trust how PayPal handles my sensitive information. But also, I have experience with PayPal while I don’t have experience with this small marketer.”

Likewise, merchants rely on third-party payment processing companies to keep their systems secure so that they can offer their customers more ways to shop and accept different forms of payment.

As shoppers move their money to digital channels, fraudsters are shifting their focus too. According to a Vantiv report, “Payment Trends to Watch for in 2017,” the mobile payment security market is expected to grow to $3.1 billion by 2020, up from $1.06 billion in 2015.

“There is this mad dash to expand coverage of these new touchpoints, but there’s also that latent concern of expanding too fast without worrying about due diligence on security, fraud mitigation, and the regulatory aspects of not doing either of those things. Realistically, the answer there is to leverage the experience of trusted players within the payment space,” says Canning. “There is going to be a product or service that can help you expand into a digital channel without putting your customer data at risk or opening yourself up to a potential breach that could essentially destroy your brand.”

Chargebacks can have a detrimental impact on businesses of any size. A fraudulent chargeback reveals a potential gap in security, but an unhappy customer who initiates a chargeback shows that there may be a breakdown in communication or a problem with the product or service. Either way, merchants want to prevent chargebacks, but if they are too cautious and make their pay gates too cumbersome, they may be turning away good customers.

PayPal offers a complete, publicly accessible online guide on how to avoid disputes and chargebacks, noting that most problems with an order fall into one of three categories: an item has not been received; an item is not as described; or there’s been an unauthorized transaction. With recommendations on how to handle each of these scenarios, PayPal basically breaks it down into a few simple recommendations to prevent chargebacks from happening in the first place: provide contact information; be responsive; suggest dispute resolution within PayPal (again, avoiding involvement with credit companies to avoid chargebacks); and provide a clear return policy.

“From the experience standpoint, merchants are focused on the lifetime value of their customers — acquiring that relationship and nurturing that relationship,” says Canning. “A chargeback that isn’t a fraudulent reason is one of the strongest indicators, payments or otherwise, of a negative customer experience that is a direct hit to that lifetime customer value.”

If a chargeback does happen, a merchant might learn from the event and improve its customer experience by tracing it back to support and service interactions or even the marketing strategy used to acquire that customer.

Ultimately, as Garnett concludes, it comes back to trust.

“The more trustworthy your payment process, the higher you’ll find both your revenue and your profit,” he says. “If you will, the biggest source of friction in the small-marketer direct-selling business is lack of trust. Anything your payment processor can do to build trust will pay out for you.”

Transparency, good communication, and responsiveness are key, and if merchants are putting their customers’ needs first, they should feel confident about expanding into new channels and growing their business.

“Everyone is going to be omnichannel at some point,” says Canning. “The people that can handle that expansion while keeping that customer-centric mindset when rolling out their systems, that’s the definition of merchants who will succeed as consumer behavior continues to change.” ■

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About the Author: Nicole Urso Reed

Nicole Urso Reed

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