Support Services: Pay Heed to Payment Management and Prosper1 Apr, 2009 By: Response Contributor Response
We're all managing through the roughest U.S. economy in decades. Waning consumer spending has had a dramatic effect on retail volume, and credit availability issues stand to dampen the commerce that continues. It's forcing all of us to consider how to maximize the value of every sale and of every payment made. For direct response merchants, this environment provides extraordinary opportunities to capture buyers who continue to favor direct-to-consumer sales channels and your approach to payments can certainly help.
How can DR merchants improve payment performance, enhance efficiency and even gain revenue in this environment? Better payment management, versus simple payment processing, can play a role in minimizing expenses, streamlining operations and growing revenue.
Today, merchants are in desperate need of a payment processing company that takes a vested interest in their overall business objectives. Now is the time for payment processors to elevate their merchants' offerings, to closely manage and analyze processing data, and to provide tangible solutions that will help them survive — and even thrive — through these tough times.
Merchants have more choices than ever when it comes to managing payments and selecting their operating platforms. What you sell, how you sell it and the medium through which most of your payments are received should dictate how you process. A direct response retailer with significant direct sales and explosive Web sales will have different needs than a large retailer whose payments predominately come through traditional point-of-sale transactions.
First, merchants should understand their real processing costs and the hidden opportunities to maximize revenue by grasping what their processing trends tell them. Take advantage of free payment management analysis offers that help you better understand the complexities and demands of your entire supply chain. Make sure that the analysis will look at all facets of your payment processing, not simply the price thereof, but the potential lost value from correctable inefficiencies and foregone revenue opportunities.
Investigate platforms that can reduce declined authorizations, improve re-authorization success rates, lower your percentage of refunds, and help you facilitate easy adoption of competitive service differentiators. Alternative payments, for example, can expose your products and services to new consumer audiences, helping to boost your revenue. When a card is declined, a solid payment management strategy might investigate additional approval options or help to identify trends that may yield an increase in successfully processed transactions.
Recurring billing also can be a powerful source of revenue for products or services delivered periodically or repeatedly. This strategy can substantially increase the number of consumers who try your product or service, as well as the number of consumers who continue to use it.
To take full advantage of recurring billing, you should seek a payment management provider that has extensive knowledge of related card association regulations and experience helping companies like yours with installment and recurring billing solutions.
At the same time, there are some key questions you should ask when considering a new payment management partner. Do they help to uncover potential problems before they exist? Does their insight lead to revenue growth opportunities for your business? Do you get data-rich analysis in your reports? Do they explain what the data suggests about your payment trends? Are you presented with periodic thorough reviews of your processing and payment performance?
It's increasingly clear that a processor's ability to fundamentally understand your business can add real, measurable value to your business. While you undoubtedly have access to your processing data, the most valuable payment management solution provides the analytics to capture and capitalize on key business intelligence to improve your business model while positively influencing your bottom line.
By taking a holistic view of the value of payments, you will start to see profound results within your business. The current economy only reminds us all that we should be learning how to derive the greatest value from each transaction. In the current economy, only those who devise a strong payment management strategy will survive and flourish.
Jason Pavona is vice president, product management, at Litle & Co. He can be reached via E-mail at firstname.lastname@example.org.