e-Commerce Considerations

If this were easy, every site would do it!

The overall e-Commerce transaction process involves:

1. Attracting prospects to a web site
2. that is properly designed to encourage visitors to browse (as opposed to leave),
3. leads the visitor to a completed transaction by offering products easily and without undue complexity, and
4. addresses concerns (perceived risks) that can scare off the potential buyer if left unanswered.

Completing an e-Commerce transaction is like buying a house. First, you visit a realtor and scan thru books with descriptions if properties, look at flyers with descriptions, or maybe just discuss some new addition to their inventory. This is very much like scanning search engine results, ezine articles, or reading press releases. They are all external to the actual property and as promotional pieces describe something in terms that you may care about. From this promotional material you make a list and go to visit the property. On the web you would "click here."

Second, you drive to the property with the realtor to see what it looks like. Sometimes, before the car even stops you will say "no, not this one" and drive off. Other times you will stop and take a look. This is often referred to as "curb appeal" -- the property appears to match your needs. On the web, this is usually the first impressions of your home page from the perspective of the visitor, not you. Does it meet their need? Does it offer a solution they seek? Does it "hook" their curiosity? The average home page loads in 48 seconds at 28.8kb, but the average visitor leaves in 35 seconds. Over 80% of all visitors visit only this one page. (Check your server logs now, you may be doing even worse.) Does this tell you something? So, the second component after promotion is to build a compelling home page that addresses the visitors needs and wants without having to scroll, and absolutely presents text in under 20 seconds.

Third, now that the realtor has shown you a property that seems to be what you like (at least from the curb), you want to go inside and see if it solves your problems. On the web, this is navigation, content, value-statements, a process to allow the visitor to buy without undue complexity, and a way to answer any last minute questions so that they will not abandon their purchase over a minor issue. Let the human factor (when needed) contribute to the sale.

Properly done this will take a visitor and allow them to become a customer.

Most e-Commerce sites do not do these steps properly.

Technology Discussion

Given this groundwork, a consumer will hopefully select a product that they want to purchase. At this point you might choose to utilize a Shopping Cart product to assist the consumer in the processing of their order.

Behind the scenes you need to have two key products. The first is a properly configured Shopping Cart to collect transactions to initiate communications with your merchant account bank, and the second is the merchant account itself (a holding account that clears transactions with the credit card companies). The merchant account actually comes with either data input equipment or Virtual Terminal software to act as the data input device. The Shopping Cart software will interface directly to the Virtual Terminal. The merchant account eventually receives the transaction, clears the funds, and then transfers the money into your business account. Determining the overall business cost of this sales tool is complicated by the many shopping cart products on the market (some are very expensive), and the different rates charged by the merchant account bank on the transactions (not all banks are equal).

There are several things that you need to do to in order to collect credit card payments from your clients. If you have never started this process you need to carefully follow all instructions on this page. If you already have a merchant account you need to review Step 1, then skip Step 2, and follow the remaining instructions.

Step 1 - Consider Credit Cards

It has been said that to allow the use of credit cards on a web site that sells products will at least double sales compared to having clients mail in checks. While this may be true for some sites, it is far from certain that this is true for all sites. And the issue is not whether it doubles sales as much as whether it keeps potential buyers from leaving the site without buying. Clearly, offering credit cards does not increase traffic, so any sales increase must be due to your ability to meet the needs of EXISTING visitors that REQUIRE the convenience in buying online.

The most important issue will be the sales cycle. If you sell an item that is purchased on impulse, then you MUST accept credit cards. The impulse must be acted on right then. If you commonly need to discuss a purchased item with a prospect before the sale (as in the case of our services where they need to be tailored to the needs of our clients) or you must ask a buyer to take action over the next 24 hours, then it is not an impulse sale. If you sell an impulse item and your payment process is not able to be online, then you are already losing half of your potential clients. In this case, offering a credit card payment option will help you keep consumers that you have already attracted to your site from leaving before they purchase. In this case, credit cards don't double your business as much as let you close the business that walks away because you don't offer credit card payments. If you do not sell an impulse item, and you find that you need to go through a process before you can close a sale, then offering credit cards may not have the impact on sales that you would expect.

It is important to consider some aspects of the sales process: web-based commerce with a human touch is very effective in most cases, especially with 60% to 70% of all shopping carts being abandoned before purchase. Do not design to avoid human contact if human contact increases the ability to sell your products. Factor it into your design. While this may be against the Amazon.com hands-off model, some firms like FaceTime Communications are integrating AOL Instant Messager with their web site e-Commerce applications to answer last minute questions. Reports are that six times as many visitors will buy if questions are answered. Customer Service is evolving, and it is alive and well on the web.

Another issue is risk. The security the client gets by knowing that if the vendor does not deliver the product that the consumer can file a complaint and have the credit card company intervene decreases the risk for the consumer and eases their mind, facilitating the sale. Couple this with the perception that the merchant has some financial stability and that the business is not fly-by-night, and you have further decreased the risk felt by the consumer. As such, it is far easier to overcome the "cold feet" portion of the process and to help close the sale.

Part 2 - Obtaining a Merchant Account

If you do not have a merchant account, get one now. A merchant account is needed in order to move collected money from the Shopping Cart product, clear it with the credit card firms, and to transfer it to your bank.

Merchant accounts are available thru most banks, but the rates are typically not optimal and it takes (seemingly) forever. An client of mine went to Bank of America and Wells Fargo and both promised a reply in 10 business days, and both took over one month. My client maintains an average daily balance of hundreds of thousands of dollars in their accounts.

Another approach is to utilize merchant account agents. Much like insurance agents, they are charged with providing competitive rates and offering superior service. When picking an agent, look for nationwide coverage with regional offices, many years of experience (more than five), support for all major credit cards and electronic checks, an efficient processing structure (allows for 7 day application to implementation schedules), and a high approval rate.

But can you afford it? The cost is typically under $50 per month for the Shopping Cart software, under $50 per month for the Virtual Terminal, and the merchant account is usually $10 per month plus $0.30 per transaction plus 2.5 percent fee on all transaction. To see if you can afford it, take your sales for the month and plug them into this formula. This is what it would cost you to process credit cards today. Now cost your business with a 50% increase in sales volume. Can you still make money? Do you make a lot more money? Can you afford NOT to do it?

Part 3 - Obtaining a Shopping Cart

Shopping Carts are programmed into your web site. You will need to have it installed by your web designers, and you will need some directories added to your domain on the server.

The major issue in a Shopping Cart product is speed. If it is too slow, then the user clicks stop and goes to another store. The site obviously must be able to process requests in a timely manner and make the sales process straight forward.

Another significant issue is feature set. It should provide basic capabilities such as:

• Typical transaction confirmation with merchant Virtual Terminal response time in under 8 seconds.
• Real time online and offline processing capabilities.
• Address Verification Service (AVS) compliant.
• Online reporting capabilities.
• Daily AUTOMATIC settlement of transactions.
• Electronic Check support.

In some cases the Shopping Cart product offers significant look and feel capabilities. Note that these products sometimes require FRAMES. Note that FRAMES are discouraged by Search Engines, so you should avoid these products where possible.

Part 4 - What About Getting More Visitors?

You have gotten a great ratio of purchases to visitors, with 40% of all visitors actually completing a purchase. Now you need to focus on increasing your visitor count. Go back to our Strategy and Philosophy page.