Is this a good thing?
Recently, Mastercard and Visa, as well as other merchant processors have conveyed some new regulations with regard to program execution such as one-time offers, forced continuities, and shipping and handling only, to name a few.
These new rules/regulations are due to longtime complaints from customers that are being billed for products they didn’t want or felt they were being misled into buying. All the processors have basically decided to shun any company that employs tactics like deceptive forced continuity type programs.
So the big question remains…is this a good thing or not?
Well, I guess the answer depends on you, your business philosophy, and the quality of products or services you provide for your customers.
I believe that there are many pros and cons to this new set of guidelines.
I’m very excited about these guidelines and plan to use them to our company’s advantage in order to lead our company to higher levels. We will simply do what we always preach and that’s to do the right thing.
Now, if you are one of those companies that is focused on taking every last dollar from your customers or trying to misguide or force people into a continuity program unwillingly in order to squeeze a month or two of program fees out of them… than you’re probably concerned about the new regulations. As you should be!
If you get caught violating these regulations, not only will you lose your merchant processor and merchant account, but most likely you won’t be able to get another account from other processors in the future.
Here at Strategic Profits, from time to time, we have tried optional continuity type programs. It is a possibility that we may offer some type of optional continuity program in the future, however, these new guidelines are making us step up our game, convey all of our offers with even greater clarity, and become superior in the way we handle our prospects and customers.
These new guidelines will force us to revisit the marketing basics that we know have worked for decades and decades (because consumer buying habits never change).
Now, we will focus even more on proper, in-depth, and crystal clear marketing communication with our customers and prospects. This will nudge us to be more effective communicators when communicating a marketing or product idea. It will compel us to test new and different marketing offers and options to better serve our customers and prospects without breaching these new guidelines.
Personally, I am looking forward to this challenge.
As I see it, this is a great first step in the right direction to help clean up the industries that prey on and take advantage of unsuspecting consumers.
But, do these new regulations mean you can no longer offer continuity programs to your list?
Not at all.
Nowhere in these documents does it say that’s not allowed. What it clearly does say is any misleading hidden practices that are strictly forcing people into programs
without the option to choose not to be a part of the program will not be tolerated.
Mastercard and Visa will frown upon any dollar type deals, shipping and handling type deals or free trial type deals with forced billing options starting at the end of the month. Clearly, this will be a problem for some online publishers and others. It has become clear that those practices have not gotten them any further than they are today anyway.
What do I mean by that?
Getting a few thousand new customers in one month and then only having 20% of them the following month is without a doubt, no way to build a business. However, the companies that do the right thing, sell the products up front and communicate and market effectively to sell those products usually have a higher retention rate. They will retain customers for much longer with a higher lifetime value as well as develop a greater following of customers that won’t feel like they’ve been duped.
Remember, there are costs and overhead associated with fulfilling a shipping and handling only type of offer. By doing the right thing and using these new business practices, you will retain the majority of new customers you get in the first month (as in the past) and the initial output of money will not be wasted.
Therefore, those who still want to do continuity type programs will have to create optional type programs that people would physically have to agree to by checking a box to add or clicking a button to add it to their cart, as well as additional confirmations that solidify their understanding and acknowledgment that the product is being added to their order.
To summarize, it is my opinion that this is a good thing for our industry; it’s a good thing for consumers; and it’s a good thing for outstanding businesses that want to do outstanding work and provide outstanding products and services. So, if we continue to do the things that have worked successfully in marketing for decades, I believe you will find that doing the right thing will advance your company in ways you’ve never thought you could.
I’m looking forward to helping our Strategic Profits’ clients with these processes and sharing the great information we learn from making enhancements and advancements to our own processes.
Please give us your thoughts. Let us know what you’re doing differently or how you feel about these new regulations being handed down.