Archive for July, 2009
Like almost any other company that is out there today we need to accept credit card payments for our products on scrubadoo.com.
To give you a quick background I used to work with and sell merchant services while I worked at BB&T so I am fairly familiar with the product and the sales process. There are a slew of merchant service providers out there that you can use, making this decision process one of those research tasks that you really don’t look forward too.
Here are a few lessons learned about the overall merchant services industry:
There is a difference between a gateway and a processor. For online sales you need both. The gateway is the front end that collects the information and then sends it to the processor. Most of the time the gateway and the processor are different companies. Authorize.net is one of the big gateways that you may have heard of. The processors are “partnered” with certain gateways. Processors are the ones that process the payments securely and work with the bank card associations to make sure the entire credit card transaction runs smoothly.
Aside from price (I will get to that in the next post) one thing to look for in your “processor” is if they are actually a processor. There are a ton of companies out there that are the merchant services equivalent of a mortgage broker. They are basically a sales force that sign up users and then sell the processing off to real merchant “processors” for a fee. They do not keep your account so all of your interactions, customer service needs, etc after the sale will be with some new company.
You as a merchant will end up paying the majority of your fees to your processor. There may be a set up fee for the gateway and a small monthly fee but aside from that the majority of your interactions will be with the processing company.
That is a quick rundown of the merchant landscape. I will follow up with a fee’s post the next time I have some time.
I am pretty much an eternal optimist. So when contractors I have hired tell me it is going to take about two weeks and $500 to complete a project I usually assume it is going to take about two weeks and $500 to complete.
My experience to this point has taught me otherwise. Every web based project we have started on has taken us about twice as long and cost us about twice as much as we had anticipated. I was warned of this when I started but I didn’t really believe it (again I am an optimist).
I don’t know if this is intentional or it is just the way it “works” with web development companies but it is extremely frustrating. I have learned that a lot of it comes down to communication. Web developers speak a different language than I, or most people, do. Even after we have had several conversations and I think everyone is on the same page, two days later I will get a response to solicited critique I have made of the project’s progress. The response is typically something like “You hadn’t specified that the site needed that functionality” when I thought the fact that we needed a specific functionality was very clear. So the developer tacks on another 15 hours of work.
One thing I have learned is that diagrams are very helpful, they are in no way a cure-all, but they seem to make sure everyone is visualizing the same picture. Most of the developers I have worked with are pretty good at providing these to me and I now always ask for one as a part of their bid. It shows me that they understand what I want and that everyone is at least close to being on the same page.
I thought scrubadoo.com would launch July 1 It is now July 16th and we are still chugging along on the programming side. Hopefully we will be finished soon.
First off I apologize for the long break. I will be back to a more regular schedule after the brief haidous. Now on to the post.
In general the products we sell at scrubadoo.com are relatively low ticket items. This combined with the fact that we are almost 100% e-commerce makes shipping tremendously important to us.
Shipping is so important for several reasons. First, our shipping costs can reach 30% of the total ticket price of some of our items. Second, to help differentiate through customer service we need to provide a flawless customer experience which includes on-time, track-able shipping. Finally, we need to provide a seamless way for customers to return items that are defective or they feel should be returned for other reasons.
Like any business there are a ton of capabilities we would love to have but there are only a few that without we would be sunk. One of those few is shipping. Because of this we spent a lot of time looking at UPS, FedEx, and USPS. We needed a product we could integrate into our website, a company that was business friendly, and a company that offered reasonable rates.
My first impression of the three companies was underwhelming. None of the three seemed to have their act together on the small business side. Additionally, all of their web capabilities seemed rather antiquated and it was impossible to get an anwser from anyone. After a frustrating amount of digging I found out the following:
USPS- currently does not offer many capabilities for business owners. They are currently building a small business platform that will eventually satisfy the type of needs we have for scrubraisers and scrubadoo.com.
FedEx- I was never able to get very far with them. Through there web they dont seem to have a small business orientation nor do they have the capabilities we needed. If they do have the capabilities needed I could not find any information about them nor could I get in touch with someone who could help me out.
UPS- At first I could not get anyone to speak with me and then when I did get someone they had never even heard of the product they advertised on the web that I had more questions about. That product “returns on the web” turned out to be what we needed. I was finally able to get them to assign me an account rep who was able to either A) answer my questions or B) put me in touch with someone that could answer my questions.
We went with UPS and since my initial negative experience, I have since been impressed with their customer service (they even took me out to lunch). We launch the site in the very near future and hopefully UPS will play a key role as a strategic partner for us.
Working for a start-up company I have learned that you need to take advantage of anything free. With this in mind, the main focus of my work so far has been using social networks and online media for marketing Scrubadoo.com I have had mixed success so far. I have tried traditional networks like Facebook and MySpace as well as targeted networks for nurses like ultimatenurse.com and allnurses.com.
In general the one thing we have done very well is having a singular end point, our Facebook page Scrubaoo.com. This has simplified my work by allowing me to post in forums and networks and direct everyone to a location where we can manage discussions with customers. I think this is very important not only for saving time, but also to avoid double-counting “fans” that you may have if you were to have say a Facebook and MySpace group.
I have also found that for our company’s situation, it’s more efficient for us to interact with potential customers in forums and networks where we can converse with multiple people at once. Facebook is the medium that I am most comfortable with, but their is a lot of competition for people’s attention in Facebook through ads, groups, and pages. Nursing networks like ultimatenurse.com and allnurses.com have been very helpful. To be able to find a high concentration of potential customers for Scrubaoo.com is invaluable, and then being able to converse with them relatively easily by posting in forums is incredible. We were lucky to have established networks with tens and hundreds of thousands of our target audience.
The two most important things I have learned about using social media for marketing are:
Cast a wide net – focus on networks and media that have many potential valuable contacts.
Don’t Advertise – you have to blend in at least a little to maintain credibility in a network.
I realize that this statement may seem extremely obvious but I have already made this mistake at least once. I thought I had been pretty good about making sure I have at the very least an email trail for everything I do. This included contracts with suppliers, the outsourcing we have done for web development, or agreements with employees.
The Story goes like this:
We planned on using one primary supplier for our scrubraisers campaign. I set up our account with the company for scrubadoo.com and was assigned an account manager, Andy. I was able to negotiate a bulk deal for their products that would allow us to use them as the primary supplier for scrubraisers. I wrote about all of this in a blog a few weeks ago here: http://www.scrubadoo.com/blog/?p=137.
Well I did all of those negotiations in phone conversations with Andy and I did not realize that he had not sent an email or any follow up paper trail. Two weeks ago I sent him a message to try to negotiate similar bulk discounts for some of the other products that they offer. I did not receive a response for several days. When I did it was from a new sales rep. Andy had left the company.
There was no record of the deal that Andy and I had agreed upon. My new contact’s first offer was a a deal that is not going to work for our scrubraisers projects. I pushed back and I am still waiting on them to come back to me with something that will work for both of us. Needless to say it is no fun being in limbo on this, nor do I want to set up a new supplier for scrubraisers.
Hopefully this will all work out for everyone and we can continue to move forward with this supplier. I have certainly learned a lesson here that I hopefully won’t have to learn again. You never know what is gong on with your suppliers so it is always better to be safe than sorry.