Author Archive for Doug Smith

The Hidden Benefits of Putting Up a Fight

Monday, August 30th, 2010

Online businesses often ask us about the value of fighting chargebacks.  After all, it’s a relatively small percentage of total revenue (less than one percent if you’re following the rules).  There are, however, several reasons to put up a fight that may not be readily apparent.

There’s an old joke about two guys camping.  They hear a bear outside the tent.  One guy starts panicking, while the other calmly puts on his tennis shoes.  The first guys says “what are you thinking?  You can’t outrun a bear!”  The second guy replies “I don’t have to outrun the bear.  I just have to outrun you.”

Your site doesn’t have to be bullet proof, and you don’t want to make it impossible for someone to get their money back.  However, you do want to make your site a less attractive fraud target compared to your peers.  The web is littered with blog entries and Facebook postings of people telling how to scam a particular merchant.  If you are an easy target, people share that information, and others will victimize your business.  If you take a harder line, though, the fraudsters will look for an easier target.

Analysis of your credit card traffic will also show that you may benefit from educating the banks.  Most merchants see that a handful of banks may make up a reasonable percentage of their transactions.  Our analysis shows a drop in chargebacks received from some of these particular banks as merchants fight chargebacks over time.

Over the first year of fighting chargebacks, Vindicia clients see up to a 1/3 reduction in the total chargeback volume they receive.  While some might opt to only fight specific types of chargebacks, we have repeatedly shown that our merchants benefit from aggressively fighting chargebacks across the board.

Doug SmithTags: , ,
Posted by Doug Smith in Best Practices, Client Services, Data Geek, Marketing Fury | 1 Comment »

Sharing is Only for Kids

Monday, August 23rd, 2010

I received an interesting email from Visa recently, and it bears wider dissemmination.  The crux of the message was a reminder that it violates Visa regulations to share card numbers between merchants.  This is probably obvious in some contexts (i.e. if you sell your customer list to another company, you better not pass along their card numbers).  In other cases, though, folks may not realize they’re breaking the rules.

Assume you run an online video service.  You have an affiliate that sells pizza.  They allow someone to buy their pizza, then ask the pizza-buyer if they’d also like to rent a movie online.  If so, they route the user to your site.

So far, so good… but this is also where people get into trouble.  If the affiliate passes in basic information (their affiliate ID, the genre of movie in the advertisement, etc.) that’s OK.  However, the affiliate is explicitly prohibited from passing along the payment information.  Would it be more convenient for the customer if the payment info passed in?  Probably.  However, it’s against the Visa regulations.  It’s also a violation of rules with the FTC, unless you have explicit permission to do so from the customer.

Just a friendly reminder to be careful about passing this sort of information between affiliates.

http://www.paymentsnews.com/2010/04/visa-prohibits-web-merchants-from-passing-along-cardholder-info.html

and

http://www.retailing.org/advanced_consent_marketing_guidelines

Doug SmithTags: , ,
Posted by Doug Smith in Best Practices, Client Services | No Comments »

Secrets to Successful Implementations

Wednesday, July 14th, 2010

If I had a dollar every time I’ve heard “We have to get the project rolling right now.  We’re going to want to go live in <insert irrationally small number here> days,” I would have my own private island.

It’s natural that when companies sign a contract, the exec sponsors want to get things moving quickly.  The decision has been made, and it’s time to get on to reaping the benefits of the best SaaS platform on the market.  Looking across all of our clients, it’s easy to see who will get their implementation up and running first.  The funny thing is, it is actually independent of the size of the client, or how “process oriented” they are.  It comes down to three simple things.

1)       Defined Scope

Clients who get live quickly do so in part because they define a scope and stick to it.  There’s always a new feature to add, something that will make it even more cool, but if you want to get live, you make the conscious choice to save that new feature to phase II.

2)      Focused Resources

If your deployment team is also responsible for the corporate LAN, the CEO’s laptop support, resetting passwords for wayward users, and refilling the coffee pot, well, they’re going to have a hard time focusing on getting the work done.  (OK, a full pot of coffee probably helps, but the CEO is going to have to find the printer on his own!)

3)      Make Decisions Quickly

Even the smallest organizations can get bogged down if they debate simple questions endlessly.  Businesses don’t fail because the background on the offer page was the wrong color.  On the other hand, businesses do fail if you don’t get to market and start generating revenue.  Nominate someone from each of the key functional areas, and give them the authority to make the call.

If you adhere to these simple precepts, the implementation of a best-in-class billing system takes less time than you would imagine.

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Posted by Doug Smith in Best Practices, Client Services, Payments 101.201.301 | No Comments »

Now Announcing … “Refunds”??

Friday, June 11th, 2010

Building business-critical software is an interesting process. We must understand the core requirements of our prospects and clients, find which additional features will serve the largest number of clients, and predict future requirements. However, no matter how good you are at this process, no software package will meet 100% of every client’s needs. A good sales team must make certain that prospective clients understand where any gaps may lie, and an effective services team must be creative in proposing workable solutions to close those gaps. At the end of the day, however, you must have a product that services the vast majority of feature/function requirements as defined by your market.

I recently saw this announcement from one of our competitors:

http://blog.zuora.com/zblog/2010/06/zuoras-june-10-release-major-new-functionality-allows-zcustomers-to-accurately-track-payment-operati.html

I’m not sure how the services team at Zuora has been working around this for so long.  Refunds are a basic part of being able to accept credit card payments.  But I have to congratulate them on working around such a gap.

It does beg the question: what else are they working around?

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Posted by Doug Smith in Client Services | No Comments »

Experience Matters

Wednesday, March 3rd, 2010

Having spent nearly all of the last two decades working on billing systems, I’ve been through I-can’t-count-how-many different product selection exercises.  A typical scenario goes as follows:

  1. Someone in the organization decides that they’ve “had enough” and they start the ball rolling to select a new billing platform.
  2. A group of internal subject matter experts gather to consider the things a new billing system must do.
  3. These thoughts are collected in a “Requirements List”, which is watered, fertilized (and rarely, if ever, pruned).  The requirements list rapidly grows into a full blown RFP.
  4. RFP is sent to vendors.
  5. Shoes are shined, hair is combed, and promises are made that the platform being pitched will do exactly what you’ve asked.
  6. And then the real work begins…

The problem with this process is that it supposes that anyone out there has a billing system that matches exactly the way your team thinks of billing—and also that your team has nailed with 100% accuracy the needs of the organization not only today, but over the next 7-10 years.  I’ve been involved in projects ranging from straightforward SaaS deployments to “Enterprise Software” on up to “custom built” solutions.  No single delivery strategies has the corner on the market for success.

Many clients have told me that the one thing that tips the scales in favor of success is expertise.  Deploying a billing platform is a process filled with hundreds of small decisions.  Should I accept or reject this AVS return code?  Which screen layout will increase conversion rates?  When should we send email to our customers?  How should my retry cycle change based on my product offerings?  The key measurement of a services team is not only whether they know the answers to the questions, but do they know which questions to ask?  That is the key to maximizing value from the billing system.

My advice is simple:  when the experts gather and start watering the requirements tree, make sure they give consideration to the roots of the tree.  Make sure the services team of your billing partner can help guide you through not just the technical implementation, but the key business decisions that will have the greatest impact on your revenue.

Doug Smith Posted by Doug Smith in Best Practices | No Comments »