A Lifecycle Strategy Encourages a
Lifetime of Consumer Payments
By Jason Pavona
Consumers, like never before, are in control. They
choose their brands. They determine when and
how they will receive messages about your products and services. What’s more, consumers today
transact with forms of payment that didn’t exist 10 years
ago. They’ve created digital-only brands, which contend
with brands that are decades established.
Powered by the Internet and unprecedented access to
content, the digitally empowered buyer consumes news,
television, radio and even mail on-demand, while religiously filtering unwanted messages and merchandising.
The best, often most loyal and profitable, of these consumers are multichannel and marketers must be too.
These changing dynamics are playing to the sweet spot
historically held by direct response marketers. Direct sellers are obsessed with a keen understanding that it’s about
making the product relevant to the consumer here and
now. Given its informative, educational and often entertaining approach to demonstrating products and services,
the industry has adapted well to capture shifts in consumer appetite for media. Today, direct response sells not only
through short- and long-form media, but also through the
Internet and through targeted in-store strategies.
Measuring the Back End First
Managing these shifts is not without change in how
business is done. Direct response sellers — regardless of
product, service or media channel — have been smart to
conform their businesses to the real-time needs of their
consumers. They are actively bringing lifecycle business
strategies to their entire service and fulfillment platforms.
Business processes that were once viewed only in their
own operational context are now viewed as one step in
a series of business process cycles that depend on one
another to optimize the customer experience and to enhance the lifetime value of each customer.
Order management, fulfillment and customer service, and many formerly-price-driven commodities,
are now viewed and measured first in the spectrum
of their ability to create
and to increase lifetime customer value. This approach
also has extended to a commodity often looked at through
a functional, lowest-cost lens — payment processing.
Your processing relationship today is increasingly less
about size, scope and seemingly low cost. It’s about the
relevance of your provider’s solutions as looked at from
your needs — the products and services you sell, the
media through which you sell them and the ability of your
processor to live and breathe the experience of your business and ultimately the needs of your consumer.
Achieve the Right Goals
Looking at the macro picture, today’s payment engine
should help you achieve three goals. First, your payment
engine should be a pivotal part of your revenue growth
strategy — reducing declined authorizations, improving
re-authorization success rates, lowering your percentage of
refunds, increasing adoption of service differentiators including alternative payments and international payments.
Second, it should help you minimize processing and pay-ment-related costs by helping you manage interchange,
reduce chargebacks and automatically update customer
payment information. Finally, your payment engine
should be included in all efforts to streamline operations
as they relate to all other business cycles — helping you
simplify connectivity, eliminate cost- and time-consuming gateways, develop clear, concise and flexible online
reports, and automate processes such as chargebacks.
The more holistic look it takes at the lifecycle of payments, the more consultative your payment processor
will be. Developing the micro applications to achieve the
three stated goals is where processing becomes a strategic
asset in your supply chain.
For example, understanding the interplay of authorizations or chargebacks and BIN analytics, or the relevance
of alternative payments to your customers — before
undertaking the development expense associated with
them — is the difference between value-adding processing services and the status quo. Take the time to evaluate
the people behind your payments, to make sure their goals
are aligned, and to examine closely how each payment
you process can be optimized. Doing so can enhance the
real value of payments made by your consumers and their
lifetime value to you.