Direct marketing companies continue to grow in number and in annual sales. According to the Direct Marketing Association, it’s reported that direct marketing campaigns have driven more than $1.7 trillion in annual sales across all channels.
Consumers have been responsive to direct marketing, making purchases online and over-the-phone at increasing numbers. While it is a popular method of selling, it also has inherent challenges.
This brings us to direct marketing merchant accounts; and how a specialist processing partner helps steer high risk direct marketing ecommerce merchants through difficult times.
Difficult times, you ask? Well yes, if you consider the high risk label and lots of chargebacks making it difficult for some ecommerce merchants.
Let’s start with the basics of direct response, and take a linear path to direct marketing merchant accounts and the benefits they deliver. Directly.
What is Direct Response?
Direct Response (DR) marketing represents a subset of the marketing discipline. Alison Lohse, writing for MarTech Today, summarized it this way:
“Brand marketers focus on sentiment, engagement, interaction, equity, and other slightly ‘fuzzy’ KPIs, while direct response marketers look at transactional metrics and behavioral response: This $1.00 returned $1.50 based on this consumer action.”
First touted by Lester Wunderman, the DR marketing promotional method attempts to send messages directly to consumers (via direct mail, email, pop-up ads, telemarketing, TV commercials, websites, and the like).
Its focus is driving trackable, measurable, positive actions through a specific, measurable “call to action” or CTA. You know, fill in a coupon and mail it — call a toll-free number — sign up for an e-newsletter — or click “buy now.” Ultimately, the desired action results in a consumer placing an order.
Among Wunderman’s 19 Principles of Success you find this gem: “Your Share of Loyal Customers, Not Your Share of the Market Creates Profits.”
A strategy used by nearly every ecommerce merchant, direct response marketing falls into the high risk category, mostly because of the card-not-present (CNP) nature of online sales transactions and the blistering rate of chargebacks experienced by direct marketing merchants…A good reason for merchants to choose direct marketing merchant accounts.
Rampant Chargebacks Plague DR Merchants
Whether customer remorse leads to “friendly fraud” chargebacks, or bad guys commit true fraud with stolen card data, the direct marketing world suffers rampant chargebacks. Either way, fraud is the culprit.
For example, experts at Chargeback believe that the easiest way to reduce your chargeback rate is through “iron-clad fraud prevention methods.” We agree. Best practice fraud prevention methods include:
- Insist on a secure Payment Card Industry Data Security Standard (PCI-DSS) Level 1 compliant payments gateway from your processing partner. Don’t shirk this requirement, as non-compliance costs dearly in the form of large fees from major card brands.
- Always require Address Verification (AVS), Card Code Verification (CVV) and IP Address verification in your payments gateway and online payment portal.
- Screen your payment gateway for fraudulent transactions using a robust, recurring process.
- Require strong passwords that meet best practices for ecommerce fraud prevention (when customers create online customer profiles to facilitate repeat orders).
- Develop and document a clear, robust fraud prevention policy and showcase it on your website.
- Retain copies of all purchase transactions, and order fulfillments. Maintain the records in a secure and convenient location, as you’ll need them to dispute chargebacks and facilitate resolution.
- Review and be willing to revamp your terms of service and return policies. Move customer service into user-friendly territory, if not there already. Treat your customers well and communicate in a friendly and professional manner.
Every email represents the opportunity to retain a customer and perhaps generate a follow-on sale. Always send an email confirmation thanking customers for their purchases, fulfill orders quickly, and send an email with shipping and delivery information.
Customers who believe you care — because you treat them well and conduct business professionally — are less likely to commit friendly fraud by asking their issuing banks for chargebacks. (Check out more fraud prevention suggestions in the link, especially those about your business processes.)
Work hard to build strong customer relationships through good communication, and you may be surprised how well your ecommerce business grows.
High Risk Direct Marketing Merchant Accounts to the Rescue
Direct response merchants often find themselves struggling to find long-term, affordable payment solutions. You need a secure payment portal for transactions to help you move products.
You can’t help that your chosen industry sector — direct marketing — falls into the high risk category. But you can choose to work with an experienced high risk payment processor that offers direct marketing merchant accounts.
MerchACT has worked with a variety of direct response marketers and “as seen on TV” resellers. We’ll pair you with the right merchant bank and set up your secure processing portal so you can do more than just move your products; you can accept multi-currency payments for them too.
With our high risk direct marketing merchant accounts and reliable payment gateway for secure transactions, we help you:
- Grow your direct response ecommerce business with recurring billing and multi-currency options for merchants worldwide,
- Earn more from the growing industry of direct marketing,
- Maximize profits with a reputable and stable solution.
Let MerchACT be your payments advisor to help you get chargebacks under control. We treat clients as business partners, to help you be profitable and grow your business. Because if you’re successful, so are we. Give us a shout today. We’ll both be glad you did.