Guide to Affiliate marketing

Definition of Affiliate marketing:
Affiliate marketing is a revenue sharing partnership between a web merchant and one or more affiliates. The affiliate is paid a commission for referring clicks, leads or most often sales to the merchant.

Affiliate Marketing is a revenue sharing venture between a website owner and an online merchant. The website owner will place advertisements on his websites to either help sell the merchant's products or to send potential customers to the merchant's website, all in exchange for a share of the profits.

Affiliated companies are companies which are related to each other in some way. There are a number of ways in which companies can be related, ranging from formal arrangements, like interlocking directorates, to simply working in the same industry. Affiliated companies may work together on projects, provide special services for customers of their affiliates, and engage in other business activities in association with the companies they are related to
Being an affiliate marketer you won’t have to worry about creating your own product, e-commerce, product delivery, or even customer support since it is the merchant’s responsibility.

Qualities to possess to succeed in affiliate marketing
1. Affiliate Marketing Needs You To Be Patient
Too many Internet marketers lose out because they become impatient. You need to have a strong desire to succeed in affiliate marketing.

2. Affiliate Marketing Requires Hard Work
Starting out in affiliate marketing requires your time, dedication and hard work. I remember my sleepless nights, working shifts at my workplace and coming back home to continue on my sites. If you're just starting out, forget what the gurus tell you about working 2 hours per day the watching the money flow in.

3. Affiliate Marketing Needs You To Be Creative
The real key to being successful with affiliate marketing is to develop a good content based website and weave your affiliate links into all your content. You have to provide your prospects with good, quality content to keep them coming back to your site.

Ways to earn money through affiliate marketing
Pay Per Click — Every time a potential customer leaves the affiliate website by "clicking" on the link leading to the merchant's website, a certain amount of money is deposited in the affiliate's account. This amount can be pennies or dollars depending on the product and amount of the commission.

Pay Per Sale — Every time a sale is made as a result of advertising on the affiliate's website, a percentage, or commission, is deposited into the affiliate's account.

Pay Per Lead — Every time a potential client registers at the merchant's website as a result of the advertisement on the affiliate's account, a previously determined amount is deposited into the affiliate's account.

For many website owners, this is a great way to earn some extra money without actually having to "do" anything. All it involves is placing an ad on the affiliate's website. There's no selling or promotion of any kind. The affiliate can just sit back and wait for the profits to roll in.
The affiliate has to do thorough research on the merchant before agreeing to affiliation. To not do so can mean ending up with a merchant who refuses to pay commission fees or packs up his business and moves on without informing any of his affiliates. This is rare, however, and most merchants and affiliates have a pleasant and profitable business arrangement.

It's important to choose wisely. In some cases, an ad can be placed on an affiliate's website for months before a potential customer "clicks" or purchases something. If the commission is only pennies, this can lead to a frustrating relationship. Both the affiliate and the merchant are well advised to ensure the relationship will be mutually beneficial.

Becoming an Affiliate Marketer

As an affiliate marketer first thing you need to do is to go to a site like Commission Junction and sign up. Once you sign up, you can browse what kind of products they offer that you can promote, this is very important. Once you find something there to promote, you can add the code to your site. Try as much as possible to pick something that will be compatible with your website. Like, if your website is about early childhood education, you find an affiliate program that has do with things related to early childhood programm.
Your main goal as an affiliate marketer is to bring traffic to your partner merchant. By "traffic", we mean a number of people visiting a certain website.

There is no standard in traffic counts. Each merchant has their own desired traffic figures. As an affiliate marketer, always remember to pattern your strategies to your partner's objectives.
To generate your merchant's aspired number of traffic, develop contents in your website based on your market's interests and your merchant's profile. To do this, understand how your partner's business operates and understand what your consumers' behaviour are when online.

Get an affiliate program you want to promote, make a free website, write an article about what you are promoting and submit it. Back link your site on forums that are on the same subject as your website.

You need to make sure your affiliate link or banner is somewhere that will get people to notice it and make them want to click on it. This up to you/ try different location until you find one that works for you.

Once you have that set up the code on your website, you will have to promote the page to get people on the site. That is somewhat easy to do. The best and easy way to do it is to post in forums that is similar to your site and have you site in the signature. You can also write articles on sites with your link in the resource portion of the article.

Now you might be saying, "what if I don't have a website?" Well, that's fine also, just make a blog about a subject that you know about and go to Commission Junction to find an affiliate product to promote it.

Also if you don't want to start a blog, you can also use a signature in a forum if you post in the right forums. But that's sometimes is frowned upon. I have seen people do that before though. I'm not sure how much money you can make doing it this way, but you can always try it if that is what you want to do and you should start seeing some kind of money coming in. It will not make you rich but it will put smiles on your face.

While affiliate marketing can be incredibly lucrative it is important to know that affiliate marketing is not easy money. Most people who try it make very little as it relies upon numerous factors including:

traffic (high traffic helps a lot)
finding relevant products
finding quality products
building trust with your readers
having a readership who is in a ‘buying mood’
you being able to write good sales copy (and more)

However, as they always say there are two sides to a coin, the affiliate marketing program also has its advantages and disadvantages.

Advantages of Affiliate Marketing

•Affiliate marketing boosts sales and opens up new marketing channels.
•Merchants only have to pay their affiliates when a lead has been generated or there has been a sale, which is cost effective marketing.
•An affiliate marketer can still maintain his present work or business and have the affiliate marketing income to supplement his financial position. With a laptop and an internet connection, anybody can work almost anywhere even while enjoying a vacation.
•For clients, they do not have to drive all the way to the merchant's store or retailer to physically buy the product or engage the services of a service provider.
•Marketing allows smaller companies the chance to expose their products on websites that already have a great number of people looking at them. Affiliate sites also benefit from this type of marketing because they receive a commission for every sale they make for their website.
•It does not require a sizeable investment on the part of the affiliate.

Disadvantages of Affiliate Marketing
Having gone through the advantages of affiliate marketing, it also comes with a few disadvantages.
•The greatest one of all is that a lot of people get into this game with completely wrong expectations, unfortunately, it's not like you can simply create a small website and start earning raking in huge commissions over night. Even though affiliates generally have to deal with fewer issues than product creators, it's still a complex business that requires many different skills.
•There are link hijackers that hijack the affiliate link and then get paid the commission that the affiliate is suppose to be getting paid.
•Dishonest merchants can close down their program without telling the affiliate and without paying them their commission.
•Affiliates may mislead or falsify advertising in order to get the sales commission. The affiliate may make promises regarding the product which are completely wrong or exaggerated. If this happens the merchant will usually receive complaints and potentially lose customers
•Merchants could promise high commissions to get new affiliates and then lower the commission rate a couple of weeks after getting the new affiliates.

Lastly, No matter what the disadvantages of affiliate marketing are, it still one of the best forms of marketing available online today and is a great way for you to make money. As a vendor, you should definitely have an affiliate program for your products, as it really is the best risk-free marketing to be had. As an affiliate, you simply need to have realistic expectations and be willing to put in the work necessary to really see good results. If you are looking for a way to make extra money and help others market their business, affiliate marketing is right for you.

Digital Marketing In Today’s Challenging Market

Before digital marketing came along, professionals had to rely on print, radio and television advertising to reach customers. All of these channels are essentially one-directional modes of communication, requiring clever thinking to generate a response and ensure customer engagement. With the advent of mobile telephones, the Internet and other forms of interactive communication; professional marketers can today enter into a two way dialogue with the customer.

When it comes to marketing, digital marketing is one of the most effective and cost into account in comparison to all other media. Digital marketing includes advertising or marketing strategy to use in advertising on mobile, Internet and other electronic media or digital. His importance to the advertising community is growing day by day, led many people to take their digital marketing profession.

What is Digital Marketing?

“The use of digital technology and processes in the development, distribution, and promotion of products and services”.

“Is the practice of promoting products and services using database-driven online distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner”.


What are Digital Marketing Media?

The digital marketing sector uses many different digital marketing media channels, such as:
Cell phone Short Message Service (SMS) – text messages
Really Simple Syndication (RSS) feeds
Podcasts
Voice Broadcast
Video E-mails
Banner ads on affiliate websites
Outdoor digital displays
Websites
Blogs


Strategies for Digital Marketing
There are two basic digital marketing strategies used by current and potential customers. These two types of digital marketing are called the “Push” and the “Pull.” Their methodology for providing information to customers works as follows:

Pull digital marketing – the customer seeks information about products and/or services by visiting the company’s sources of information searching for the specific product or service information. They are basically requesting to view this specific content. These are typically located in websites, blogs, streaming audio and video sources. Customers have found related information on other websites or been directed to the company’s sources by a referring website to find the information.

Push digital marketing – customers are provided information by receiving or viewing advertisements digitally, such as: SMS, RSS, cell phone calls, etc., as subscribers of the latest product and service information provided by the company.

Advantage of Pull

Pull has no restrictions on file size, no opt-in requirements, and low technology requirements for the company.
Since requests are inherently opt-in, the size of content is generally unlimited.
No advanced technology required to send static content, only to store/display it.

Disadvantage of Pull

Marketing required, little tracking of visitors and no personalization to keep the visitors coming back.
Considerable marketing effort required for users to find the message/content.
Some types of marketing content may be blocked in mixed content scenarios (i.e.: Flash blockers)


Advantages of Push

Personalization of messages, high conversation rate, and detailed tracking of customer choices.
Faster delivery - push technologies can deliver content immediately as it becomes available.
Consistent delivery - some push platforms have single content types, making it difficult for the user to block content by type.
Better targeting - since push technology usually justifies subscription, more specific marketing data may be collected during registration, which allows for better targeting and more personalization.
Better data - marketing data can be correlated to each request for content, allowing marketers to see information such as user name as well as demographic and psychographic data.


Disadvantages of Push

Requires Can Spam Act 2003 compliance, most customers must opt-in, can be blocked, simply opt-out, and requires delivery technology.
Smaller audience - push technology not implemented on common platforms generally need client and/or server software before content can be created, distributed, and/or viewed.
Higher cost - less popular platforms may have higher implementation costs.
Lesser discoverability - smaller audiences mean fewer views mean less visibility in search engines.


Important of Digital Marketing

In today’s business world, businesses have numerous opportunities to reach their potential customers through 3G-enabled mobile phones and DTH connectivity. With large groups of consumers hooked up to the internet or other digital mediums, digital marketing solutions have an edge over conventional marketing techniques.

If a business is to participate in a digital marketing campaign it is important to figure out the right campaign that will appeal to the target audience.

When it comes to the selection of the right digital marketing medium, the internet stands out as the cheapest and most effective option. Online video advertising, blog and forum postings, e-mail and RSS feeds are just a selection of advertising tools that have stemmed from the internet and its ability to reach to a wide, global customer base with speed and minimal cost compared to traditional marketing techniques.

The internet and mobile telephone technologies have revolutionized the marketing industry; providing the means to track consumer interests and obtain an inexpensive link direct to the customer.
A click on a website can capture customer details and ask key questions to assist with market profiling. The voluntary provision of email or mobile telephone contact details allows the marketing professionals to 'get in front of' the customer without breaching privacy regulations. The more closely consumers become connected to digital technologies, the greater the power of the information channel for marketing professionals. With mobile telephones and other electronic devices kept on the person, the rate of 'hits' is likely to be far higher than the scattergun approach of traditional media.
Digital marketing helps your company increase its exposure to consumers who are actively seeking your product or service, making it much more effective than other forms of advertising.


Marketing Solutions

Digital marketing solutions include the use of multiple channels of delivery, along with the use of both Push and Pull digital marketing techniques. Both of these are used to deliver messages and information about products and services to customers, along with any others who submit inquiries.


Conclusion

With many companies going into social networking now as a form of marketing strategies; Social networking media do not necessarily increase leads, nor do they populate a company's prospect database. But they do give organizations the opportunity to share information in a one-to-many format authenticated by consumer and peer reports. It give customers the ability to research companies more thoroughly, read peer reviews, and develop a comprehensive business profile before they ever make a purchase.

Digital marketing campaigns have yielded greater conversion rates for affiliates than e-marketing strategy alone, because it is not restricted to the Internet. It may seem to be hard to believe, however, there are many people in world today who do not have access to a computer or have access to the Internet. Although almost everyone has a cell phone, MP3 player, iPod, and views outdoor digital displays.

Developing Your Brand Strategy

Developing a brand strategy can be one of the most difficult steps in the marketing plan process. It's often the element that causes most businesses the biggest challenge, but it's a vital step in creating the company identity.

Your brand identity will be repeatedly communicated, in multiple ways with frequency and consistency throughout the life of your business. To begin the development of your brands strategy you must have an understanding of these four marketing components: -

Primary Target Customer and/or Client Competition Product and Service Mix Unique Selling Proposition By identifying these components of your marketing plan you have created the basis for crafting your brand strategy. An effective branding process will create a unique identity that differentiates you from the competition. That is why it's often deemed as the heart of a competitive strategy. Determining Your Brand’s Objectives your brand should be comprised of the company personality, image, core competencies and characteristics. The impressions that you make as well as the words people will use to describe your company to others, are the basic framework of your brand. With a strong brand you build credibility, have more influence on your market, and motivate customers and clients to purchase from you. If done correctly your company will be looked at as a leader not a follower.

Some of the questions to ask yourself when determine your brand objectives are as follows.
•What do you want others to know and say about your products or services?
•What is it that you want your brand to do for your company?
Your objectives may include the following:-
•Being recognized by receiving a specific award
•Picking up a certain number of choice projects
•Gaining a specific number of new clients in the next year

Positioning your company as an industry leader in the next couple of months by defining your objectives you are able to draw up a plan on how to achieve these objectives. For instance your objective is to position your company as the best in the industry. In doing these here are some of the things you could do:
Have members of your team speak at Trade Shows •
Write and publish articles magazine, newspapers e.t.c
Schedule lectures at professional gatherings within the industry Once you’ve determined your objectives the next stage is to build and develop your brand strategy by listing out how, when and what you are going to do to accomplish and meet these brand objectives. Use the questions above to determine your brand objectives. List each objective and map out how you plan to accomplish and succeed in meeting those objectives. Don’t stop there! Once you’ve finished take the time to list out what you can do at every point in time to meet that objective. Be specific and schedule those action items in your business agenda.

The objectives that a good brand will achieve include:
Delivers the message clearly
Confirms your credibility
 Connects your target prospects emotionally
Motivates the buyer

Concretes User Loyalty Important of Branding to Marketing Strategies To succeed in branding you must understand that needs and wants of your customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact. Your brand resides within the hearts and minds of customers, clients and prospects. It is the sum total of their experiences and perceptions, some of which you can influence and some that you cannot. A strong brand is invaluable as the battle for customers intensifies day by day. It’s important to spend time investing in researching, defining and building your brand.

your entire brand is the source of a promise to your consumer. It’s a foundational piece in your marketing communication and one you do not want to be without.

The Elements of your Brand
Branding your business is very much like a game. There are important elements of your brand that translate into the world of competition. You have an objective – to make sales; a playing field - your marketplace; opponents - competitors in your market; strategies –your marketing approach; specific plays - your marketing tactics; and a winner - the company that makes the most sales. This game is constantly being played at every market for every product or service. Just think of the titanic battles you see everyday --- Coke vs. Pepsi, Microsoft vs. Apple, or Google vs. Yahoo, GM vs. Toyota. Each of these companies is competing with variety of strategies and tactics in hopes of defeating their rivals and dominates the market. They battle each other using offensive and defensive plays in hopes gaining the best position in the mind of the prospects. They aggressively execute their brand marketing plans and seek to advance their influence on the market until they score by reaching the coveted sale. Scoring a sale is the ultimate objective in the branding game. As a small business this must be the focus of all of your branding efforts.

Your cannot afford the time and money that is required to do the glamorous, image advertising like buying the naming rights for a stadium or airing a thirty second Super Bowl ad. Your branding must achieve results and sales are the only desirable outcome. The brand game consists of several necessary key elements that define the character of your brand. It’s important to use these elements in combination to appeal to your target market.

Pricing – this represents value; a higher price may imply higher quality, and lower prices may suggest decreased value.
Distribution – how available your offering is; limited distribution of a product or service may imply exclusivity and consumers may be willing to pay more.
Quality – this influences satisfaction; higher quality translates into more satisfied customers who return again to purchase your offerings.
Presence – how prominent you are in the marketplace; a high-profile market presence will lead to brand awareness and opportunities to sell.
Reputation – the market’s opinion of your brand character; this is built over time and difficult to alter once established.
Image – the perceptions of your brand by buyers; this is closely related to your quality and reputation in the marketplace. Like reputation, image is difficult to change once established.
Benefits – the affect your product or service has on the consumer; positive benefits are crucial to the product offering and to brand image and reputation.
Positioning – your differentiation from the competition, this is established by the sum total of all of your branding strategy.
Preference – the consumers predisposition to buy your product or service; this is the foundation for building customer loyalty.
Customer commitment – the ultimate result of your branding strategy; loyalty is built through relationships and close consumer contact.
The 22 Immutable Laws of BrandingKellogg on Branding: The Marketing Faculty of The Kellogg School of ManagementDesigning Brand Identity: An Essential Guide for the Whole Branding TeamBranding Faith: Why Some Churches and Nonprofits Impact Culture and Others Don'tBest Practice Cases in Branding (3rd Edition)
In conclusion, these entire element costs no dime. They are attitudes and approaches that convey who you are. Yet, unlike image advertising, they are substantial, solid core values you must project in everything that you do.

E- Marketing in 21st Century

Email marketing has become important in today’s business world. Its undeniable benefits continue to gain adepts in every level of commerce, industry and service.

What is Email Marketing?

Email marketing is the advertisement of a product, service, or brand through electronic mail. Email marketing can be used to improve the relationship between a business and its customers or to gain new customers. In order to gain the email addresses of potential customers, businesses must either pay a fee to an email broker, use a subscription service, or rely on referrals from existing customers. Many companies, of course, use a combination of these methods.

What is Bulk Email Marketing?

Bulk email marketing refers to a form of marketing that involves sending the same, or nearly identical, message to multiple email recipients. This type of campaign requires special software that takes each individual email address from a pre-existing list, and distributes a single message to each one. The number of recipients can range from hundreds to thousands, depending on campaign objectives.
Email marketing is easy to setup, affordable, vigorous and highly effective and targeted. Email is faster, by far less expensive and more compelling than the standard marketing tools, such as direct mail or print advertising. Email marketing is available to all. It is direct, it demands less time and resources and the results are instantly manifested.

It is well known now in the business world that selling to existing customers is several times less expensive than getting a new one, and that profitability us hinged upon loyal customers and repeat business.

Human beings have not changed much at their core, despite all the new resources that pile up to make our daily lives and businesses more productive, effective, fun and relaxed. When we find a good merchant or a good service provider that offer what we need, we like to establish and carry a personal relationship with them. And when we are satisfied with the performance of a product or service and we do have a good relationship with the merchant, we keep going back to that particular source every time we have the need to. We also refer our acquaintances to their care and call them my butcher, my lawyer, my child’s day care, my accountant, my doctor…

So, at the end of the day, creating and sustaining good business is nothing but creating and sustaining good relationships. And good relationships are nourished via frequent, positive communication.
Email is the best tool available for this in our busy times.

Studies show that it takes several contacts –six to seven, on average– before you actually turn a prospect into a customer, and that the more personal the contact, the better. But standard business communication tools –direct mail, telemarketing and print, radio and television advertisements– are not only expensive and time-consuming, but also often perceived by the public as invasive nuisances.

Who doesn’t dread going to the mailbox on ‘junk-mail day’? Or picking up the phone when the caller ID shows a 1-800 number or ‘unknown caller’? Or even picking up the newspaper from the doorstep on Sundays, for heaven’s sake? How long did it take for you to figure out –and fume over– the fact that the young, perky voice on the other end of the line talking to you so casually was some satellite dish company’s computer?

If doing good business is mostly about earning the good will of the public in the first place, standard marketing communication doesn’t do business a much lasting service in today’s world.

Let try to remember how small business dealt with their customers in the past, we will easily grasp the value of permission-based email marketing. In the past, small business owners would build relationships with their customers in the neighborhood through personal interaction. In the course of this interaction, they learned their customer’s names, their birth dates and anniversaries, their place of origin, the names of their spouses and children, their individual preferences and interests. They would remember this information and bring it up opportunely, always keeping in touch with their customers –appropriately called ‘patrons’ then– in an intimate, familial way.

The greater mobility, the more busy lifestyles of our time and new technologies have rendered a more expanded and impersonal world. The way we do business, the way we communicate and the way we socialize may have changed, but our core need to be individualized, to be recognized in the crowd, to be valued for ourselves, remains the same.

It is in this world that permission-based email marketing can provide you with a larger, more loyal, more intimate circle of patrons –and do so in a faster, more direct and less expensive way than is possible with more traditional and impersonal marketing tools.

Permission-based email marketing is affordable, renders a response rate up to five times greater than standard marketing and has a positive impact on the receivers’ perception of a company. A fraction of a cent per email takes a tight marketing budget a long ways into attaining your goals of winning new customers, boosting customer loyalty and fostering repeat business. But even if you favor a mix of flyers, print ads, newsletter sponsorship and Web banners in your strategy to obtain new business and retain customers, throwing the fast, affordable, direct and highly effective permission-based email marketing into that mix will only maximize the power of your investment.

One of the advantages of email marketing is that it is expeditious. As soon as you have time-sensitive information to communicate to your client list, for example, or the minute you are ready to launch a particular campaign, you can wrap it up in an email message and immediately send it out directly to everyone on your list. And you will be able to see results right away –because with permission-based email marketing your patrons are actually looking forward to your messages.

Email can be used to distribute newsletters, create brand awareness, promote preferred customer specials, advertise sales, announce new services and/or products, send/birthday/anniversary/holiday greetings, invite to events, educate your customers, and more… really fast. And what is best: it allows for that instant, consistent, one-on-one, two-way communication that will certainly benefit your business

With email marketing, you can easily assess the number of emails sent, the number of emails opened and who opened them; the number of unsubscribers; the number of bounce-backs (both hard and soft), and the click through rates (including which links were more effective and who clicked through).

This information is invaluable to gauge the overall effectiveness of your campaigns and to design and launch future campaigns that are highly effective and targeted to very specific individuals and/or groups of individuals.
One of the disadvantages to email marketing is something called spam. Spam is the word for both a tinned meat and email that is sent out to a huge number of people with little discretion. Spam is the email marketing version of carpet bombing. In fact, most email services include spam filters that weed out such emails from the general inboxes of their customers.
However, there is still concern in regards to SPAM (unsolicited commercial email) filters that are in use by ISPs (Internet Service Providers). These tools are being developed and used to protect the privacy and security of recipients from unlawful ‘marketers’ and other Internet crooks. The filters, however, are yet imperfect and sometimes weed out perfectly legitimate, permission-based messages (‘false positives’), which are then not delivered to the recipient, are usually ‘bounced’ back to the sender or simply deleted by the ISP –and can render a perfectly legitimate sender ‘blacklisted’.

Different Types of Email Marketing Campaign?
An email marketing campaign is one of the oldest forms of Internet marketing. While more advanced methods have come along, it can still be very effective provided the right approach and tools are utilized. There are many different types of email marketing campaigns that be launched by those who want to use the electronic mail system to reach their audience.

An opt-in email marketing campaign involves distributing mail to a list of subscribers that have agreed to receive it from a particular company. Though mainly leveraged by ecommerce stores, it can prove beneficial to almost any online business. With opt-in email marketing, a business can keep its customers up to date on the latest products or services, as well as special offers and discounts. Several marketers attest that the most difficult aspect of such a campaign is composing a quality list of subscribers.

Bulk email also represents a type of email marketing campaign commonly used to promote online businesses. Often facilitated through an email blast service or specialize software, bulk email typically involves simultaneously sending messages to a large mailing list of subscribers. This is generally an affordable way to reach a vast number of potential customers, but there are some notable disadvantages. There is a very fine line between a legitimate bulk email campaign and spam. Identifying this, and staying on the right side of it, is what usually enables marketers to achieve positive results.

Newsletter marketing is often viewed as one of the most effective of all email marketing campaigns. This is primarily because someone who subscribed for a newsletter is more likely to read it, whereas a message distributed through another type of email marketing may get deleted without the recipient even opening it. Newsletters offer the ability to combine various techniques into a single package, allowing a business to drive its marketing message home, whether it involves promoting products and services, or simply keeping customers updated on the latest company news.
An email marketing campaign can make a great first step for the business that wishes to encourage dialogue with its audience, or deliver a message to the market. All campaigns, however, must obtain the maximum email delivery and high open rates, which basically means that the intended recipients are both receiving and reading the mail. Many successful email marketers agree that this best way to ensure a successful campaign.


In conclusion, one of the great things of the Internet is that whether we are big or small, whether we have a huge marketing budget or a very tight one, what will determine our success is our ability to reach out to our existing and potential customers; our ability to establish and nurture a trusting and close relationship with them; our ability to single out our individual customers from the crowd; our ability to pinpoint and satisfy their most particular needs and wants; and the quality of the products and services we provide.

Important of Email Marketing to Every Business

Email marketing has become important in today’s business world. Its undeniable benefits continue to gain adepts in every level of commerce, industry and service. Email marketing is easy to setup, affordable, vigorous and highly effective and targeted. Email is faster, by far less expensive and more compelling than the standard marketing tools, such as direct mail or print advertising. Email marketing is available to all. It is direct, it demands less time and resources and the results are instantly manifested.

It is well known now in the business world that selling to existing customers is several times less expensive than getting a new one, and that profitability us hinged upon loyal customers and repeat business.
Human beings have not changed much at their core, despite all the new resources that pile up to make our daily lives and businesses more productive, effective, fun and relaxed. When we find a good merchant or a good service provider that offer what we need, we like to establish and carry a personal relationship with them. And when we are satisfied with the performance of a product or service and we do have a good relationship with the merchant, we keep going back to that particular source every time we have the need to. We also refer our acquaintances to their care and call them my butcher, my lawyer, my child’s day care, my accountant, my doctor…

So, at the end of the day, creating and sustaining good business is nothing but creating and sustaining good relationships. And good relationships are nourished via frequent, positive communication.
Email is the best tool available for this in our busy times.

Studies show that it takes several contacts –six to seven, on average– before you actually turn a prospect into a customer, and that the more personal the contact, the better. But standard business communication tools –direct mail, telemarketing and print, radio and television advertisements– are not only expensive and time-consuming, but also often perceived by the public as invasive nuisances.

Who doesn’t dread going to the mailbox on ‘junk-mail day’? Or picking up the phone when the caller ID shows a 1-800 number or ‘unknown caller’? Or even picking up the newspaper from the doorstep on Sundays, for heaven’s sake? How long did it take for you to figure out –and fume over– the fact that the young, perky voice on the other end of the line talking to you so casually was some satellite dish company’s computer?

If doing good business is mostly about earning the good will of the public in the first place, standard marketing communication doesn’t do business a much lasting service in today’s world.

Let try to remember how small business dealt with their customers in the past, we will easily grasp the value of permission-based email marketing. In the past, small business owners would build relationships with their customers in the neighborhood through personal interaction. In the course of this interaction, they learned their customer’s names, their birth dates and anniversaries, their place of origin, the names of their spouses and children, their individual preferences and interests. They would remember this information and bring it up opportunely, always keeping in touch with their customers –appropriately called ‘patrons’ then– in an intimate, familial way.

The greater mobility, the more busy lifestyles of our time and new technologies have rendered a more expanded and impersonal world. The way we do business, the way we communicate and the way we socialize may have changed, but our core need to be individualized, to be recognized in the crowd, to be valued for ourselves, remains the same.

It is in this world that permission-based email marketing can provide you with a larger, more loyal, more intimate circle of patrons –and do so in a faster, more direct and less expensive way than is possible with more traditional and impersonal marketing tools. For a pinch of a cent.

Permission-based email marketing is affordable, renders a response rate up to five times greater than standard marketing and has a positive impact on the receivers’ perception of a company. A fraction of a cent per email takes a tight marketing budget a long ways into attaining your goals of winning new customers, boosting customer loyalty and fostering repeat business. But even if you favor a mix of flyers, print ads, newsletter sponsorship and Web banners in your strategy to obtain new business and retain customers, throwing the fast, affordable, direct and highly effective permission-based email marketing into that mix will only maximize the power of your investment.

One of the advantages of email marketing is that it is expeditious. As soon as you have time-sensitive information to communicate to your client list, for example, or the minute you are ready to launch a particular campaign, you can wrap it up in an email message and immediately send it out directly to everyone on your list. And you will be able to see results right away –because with permission-based email marketing your patrons are actually looking forward to your messages.

Email can be used to distribute newsletters, create brand awareness, promote preferred customer specials, advertise sales, announce new services and/or products, send/birthday/anniversary/holiday greetings, invite to events, educate your customers, and more… really fast. And what is best: it allows for that instant, consistent, one-on-one, two-way communication that will certainly benefit your business

With email marketing, you can easily assess the number of emails sent, the number of emails opened and who opened them; the number of unsubscribers; the number of bounce-backs (both hard and soft), and the click through rates (including which links were more effective and who clicked through).
This information is invaluable to gauge the overall effectiveness of your campaigns and to design and launch future campaigns that are highly effective and targeted to very specific individuals and/or groups of individuals.
Is it all good?

Basically, yes. However, there is still concern in regards to SPAM (unsolicited commercial email) filters
that are in use by ISPs (Internet Service Providers). These tools are being developed and used to protect the privacy and security of recipients from unlawful ‘marketers’ and other Internet crooks. The filters, however, are yet imperfect and sometimes weed out perfectly legitimate, permission-based messages (‘false positives’), which are then not delivered to the recipient, are usually ‘bounced’ back to the sender or simply deleted by the ISP –and can render a perfectly legitimate sender ‘blacklisted’.

Legitimate email marketers are ‘CAN-SPAM compliant’, a certification that the merchant is doing legitimate business with legal products or services and in a permission-based mode.

One of the great things of the Internet is that whether we are big or small, whether we have a huge marketing budget or a very tight one, what will determine our success is our ability to reach out to our existing and potential customers; our ability to establish and nurture a trusting and close relationship with them; our ability to single out our individual customers from the crowd; our ability to pinpoint and satisfy their most particular needs and wants; and the quality of the products and services we provide.

See you next time!!!

Pricing Strategy an important tool for your internet business

Buying a product from your mini mart, you will easily come across so many divest products with similarities from different brand, Yet each has a different price, and each product has a different price strategy. These are marketing decisions, pure and simple. The 4 Ps of Marketing are elements of the marketing mix that you can control. Price is one of the key elements in a winning marketing mix.
Doing business on the internet without having a pricing strategy is a doom, sometime, it may seem pretty simple on the surface; your company's pricing strategy can easily mean the difference between thriving and going bankrupt. A lot of factors are involved.
One of the first questions you need to answer are as follows: -
1.What are your site visitors like?
2.Are they bargain hunters?
3.Or do they look for excellence in customer service?
4.Or shop for products based on their prestige value?
5.Another important question is what does it cost you to purchase (or produce) and market this product or service?
Your price will have to be above your costs -- most of the time. Here are the various pricing objectives you'll want to consider.

Pricing Objectives
Two main pricing objectives stand out:

•To maximize short-term profits. Here you try to squeeze as much money out of sales of the product as possible, even though fewer customers may make a purchase. Your strategy may be to charge premium prices for website design services. You end up with less customers, but then dealing with a lot of customers multiplies your problems. And you can make more profit off each customer. Or you may need to maximize profits in order to satisfy an impatient boss or investor.
•To gain marketshare. The other main strategy is to price your service lower to gain marketshare. You may want to maximize the number of subscribers to your online Internet access business, even though you don't make as much on each customer. But you know that later you'll be able to sell these subscribers other services such as web hosting, e-commerce, website design, DSL, and a host of others once they get comfortable with you. You don't make as much early, but you plan to make money later with "back end" sales.

Most importantly are these two above listed objectives, although two others objectives may be considered which includes: -
•To survive. Survival is a worthy goal. Sometimes companies lower prices so they can generate enough revenue to survive short term. But this isn't a very good long-term strategy. There's an old joke about the businessman who said he was losing money on every sale, but he expected to make it up in volume. Good luck. Sometimes it's better to call it quits before you lose even more.
•To help society. You might keep the price lower than "what the market will bear" in order to make essential products available to the consumers who would otherwise be priced out of the market. Altruism has its place. You don't have to make as much money as possible, unless making money is your only goal. For example, I really want to keep my consulting services priced within reach of small businesses. I long to see small businesses thrive; that's part of what makes me tick. But I also want to charge better-funded companies a more appropriate fee for the more extensive services I render them. The way I do this is to offer a standard product or service, and an economy service at a lower price, but with clear limitations.

Customer Demand
Consumer Demand is a crucial factor. Demand is driven by consumer tastes, consumer income, and the availability of other products at a different price. For example, if a competitor begins to sell 10 packs of iris chocolates at a lower price than yours, the demand for yours will decrease. Professional pricing consultants construct demand curves to determine absolute demand. An Educational center recently reduced the fees for admitting a new student into the school, for a duration of the first week, it was discovered just how much lowering the fees by 20 dollars, increments would increase the total number of registration by plotting registration figures on a demand curve.
Of course, commodities, well known products that are pretty much the same as every other similar product, are strongly affected by demand as well as supply. Take crude oil, for example. If it's abundant, prices drop. If it's in short supply, though, and customer demand remains constant, the price goes up. You could always sell beans or corn or pork bellies on your website. But the price would be constantly changing. You need a great product that you have more control over. Producing your own product, or getting exclusive marketing rights, of course, is best if you can do it.

But having a great and exclusive product is only half the battle. Making the customer aware of its existence and its value is the other, and that's the role of marketing. You can increase demand by advertising and careful pricing.

Estimating Revenue
Once you've established consumer demand, you need to estimate revenue. It'll help to master a few technical terms:
Total Revenue is the unit price multiplied by the quantity sold.
Average revenue is the average price the product sold for. This is still pretty simple. Now buckle your seat belts.
Price elasticity of demand is another concept. Think how much stretch a rubber band has in it. "Elastic demand" is when a small decrease in the price of Styrofoam cups produces a big increase in sales. "Inelastic demand" is when a small decrease in the price of cups makes only a tiny difference in sales.
Fixed cost comprises the fairly stable overhead costs of running the company, such as lease on the building, management salaries, insurance, and a Picasso print on the wall of your office.
Variable cost is the direct cost of production and marketing. This will vary with the number of goods produced and sold, such as labor and materials used in manufacturing. It costs you more for widget makers and widget glue when you produce more widgets.
Total cost is the sum of the fixed cost and the variable cost.
Break-even analysis is pretty straightforward. You determine the level of sales needed to cover the total costs and break even. Any sales after that start to accrue profits.
Determining the maximum profit point is a vital goal in pricing. This takes some research and then some mathematical analysis and graphing.

Pricing Approaches
Of course, pricing isn't just scientific. It has a lot to do with your particular niche on the Internet, and how you've determined you can best succeed. Below are some demand-oriented approaches to pricing:
1.Skimming pricing: - When you are offering a new or innovative product you can initially charge a high price, since the "early adopters" aren't very price sensitive. Then you lower prices to "skim" off the next layer of buyers, etc. Eventually, the price will drop as the product matures and competitors offer lower prices.
2.Penetration pricing: - You set a low initial price in order to penetrate quickly into the mass market. A low initial price discourages competitors from entering the market, and is the best approach when many segments of the market are price sensitive. Amazon.com, for example, offers a discount price and may lose money on the first sale, but this way they gain more customers who will purchase products later at a lower marketing cost (since it costs much less to attract them back for the second or third sale if they are happy with their first purchase experience).
3.Prestige pricing: - Cheap products are not taken seriously by some buyers unless they are priced at a particular level. For example, you can sometimes find clothing of the same quality brand at Nordstrom as you do at the Men's Warehouse. But because it is priced higher, Nordstrom's clientele believes it to be of higher quality.
4.Odd-even pricing takes advantage of human psychology that feels like $499.95 is less than $500. Studies of price points by direct marketers have found that products sell best at certain price points, such as $197, $297, $397, compared to other prices slightly higher or lower. Strange, we humans!
5.Demand-backward pricing is sometimes used by manufacturers. First, they determine the price consumers are willing to pay for a product using an approach such as Make Your Price Sell! (http://sales.sitesell.com/myps) automates. Then they work backward through the standard markups taken by retailers and wholesalers to come up with the price they can charge wholesalers for the product.
6.Bundle pricing is offering two or more products together in a single package price. This can offer savings to both the buyer and to the seller, who saves the cost of marketing both products separately. And the customer is willing to pay more because he perceives that he is getting a lot more, even though the cost to the seller may not really be that much more.

There are other cost-oriented approaches to pricing, this includes;
•Standard mark-up pricing: - Typically a manufacturer marks his price up 15% over his costs, a wholesaler 20% over his costs, and a retailer 40% over his costs. The retailer gets a larger markup based on the idea that, since he is closest to the end user, he is required to spend more services and individual attention meeting the buyer's needs.
•Cost-plus pricing adds a small percentage to the retailer's costs -- and "cost plus 5%" sounds so modest in ads for new cars! Ah! If only it were that simple.
•Experience curve pricing assumes that it costs a company less to produce a product or provide a service over time, since learning will make them more efficient.

Then there are competition-oriented approaches to pricing that you'll recognize:
•Customary pricing is where the product "traditionally" sells for a certain price. Candy bars of a certain weight all cost a predictable amount -- unless you purchase them in an airport shop.
•Above-, at-, or below-market pricing. Certain stores advertise "low cost" or "discount" pricing. Others price at the market, while others deliberately price above-the-market at premium prices to attract prestige buyers.
•Loss-leader pricing works on the basis of losing money on certain very low priced advertised products to get customers in the door who will buy other products at the same time.
•Flexible-price policies offer the same product to customers at different negotiated prices. Cars, for example, are typically sold at negotiated prices. Many B2B sales depend on negotiated contracts.

Once you have determined the list or quoted price you can make some special adjustments which includes;
Quantity discounts; encourage customers to buy larger quantities, and thus cut marketing costs.
Seasonal discounts; encourage buyers to stock inventory earlier than their normal demand would require. This enables the manufacturer to smooth out manufacturing peaks and troughs for more efficient production.
Rebates, such as $40 off Microsoft FrontPage 2000, are usually offered by the manufacturer, but sometimes a retail store will offer its own rebate. Rebates make marketing sense, since they strongly motivate sales, but often less than 50% of the buyers will remember to collect the receipt, proof-of-purchase, and rebate form, fill it out, and mail it prior to the expiration date. And, of course, the rebate is often subtracted from the list price of the item, which still has considerable profit built in. Rebate marketing is less than half as expensive to the marketer as the price cut would seem to indicate.
Trade discounts are offered by manufacturers to distributors or resellers in their distribution chain. For example, a manufacturer may quote list price of $1000 less 30/10/5, meaning 30% off the list price to the retailer, an additional 10% off the $1000 to the wholesaler, and an additional 5% off the $1000 to the jobber. This pricing will be expected if you have an online B2B store.
Cash discounts are sometimes offered for the costs saved from not having to extend credit and bill the buyer on an open account. This mainly affects B2B sales rather than retail.
Allowances may be permitted for trade-ins (not too many trade-in cars shipped by modem though) or by a manufacturer for promotional advertising that a retailer undertakes.
Geographic adjustments involve FOB (freight on board) pricing at the point of shipping.

Regulations on pricing
We need to note that there are various governmental regulations on pricing. If you sell outside your own country (and having a global marketplace is the beauty of the Internet!), you'll need to familiarize yourself with laws in other countries in other to get going. In most countries for example, conspiring with other firms to set prices for a product is called price fixing and is illegal. Price discrimination -- different prices to different buyers of the same goods or services is tricky. For instant in the US deceptive pricing is outlawed by the Federal Trade Commission. Predatory pricing that is, charging a very low price with the purpose of driving competitors out of business, is also illegal in the US under the Sherman Act and the Federal Trade Commission Act, but is hard to prove.

Lastly, you need to think through and then adopt a very deliberate price strategy for your business; will you sell what are essentially commodities and be the low price leader? Or the service leader? Will you deliberately price low in order to penetrate the market quickly and establish first-mover advantage? Or will you price high to skim off the early adopters at a premium profit? Will you bundle several products in order to make a greater profit? Will you round off to the nearest dollar or use an odd price approach? Do you have a new or exclusive product that you can study scientifically for the best price?

Most online businesses only guess at prices -- and most will be out of business in a few years as a direct result. The best online businesses are very deliberate about pricing, do their homework, and make changes quickly when necessary. Do your very best with pricing, After all, pricing is the only one of the 4 Ps of Marketing that brings revenue in rather than sending it out.

See you next time!!!!

THINGS TO NOTE WHEN CHOOSING THE RIGHT MERCHANT ACCOUNT PROVIDER

Every business owner aim to succeed in their respective businesses, they want to increase their sales and make more money.
The best way to do this is to offer your customers the ability to pay for merchandise with their credit cards or debit cards. Whether you operate your business in a physical location or online-only, allowing customers the option of credit card payment is logical. You will increase sales because of the convenience of the payment options you offer. The vast majority of shoppers, online and in person, prefer to pay with their credit cards. Opening a merchant account is the way to give your customers more payment options. But it is important that you find out as much as you can about merchant accounts and merchant account providers.

First and foremost let look at the word “Merchant”
What is a merchant account?
A merchant account is an account that enables merchants to accept credit card payments. Any merchant who wants to take credit card orders must establish a merchant account. A merchant account can be obtained through a bank, credit card Company, or the direct payment processor. Keep in mind that banks are not merchant providers; they use third parties to set up merchant accounts. Once you are set up with a merchant account you will have the ability to
accept all forms of payments including credit cards, debit cards and electronic checks.

A merchant account is set up through a bank or an online merchant account provider for a retail or online organization in order to accept credit cards as payment from customers. A merchant account is not a bank account. The merchant account provider's job is to place the money you earn from credit card sales into your bank account. It used to be that merchant accounts were only offered by banks and providers to retail businesses that were located in a physical location. But with online shopping gaining popularity over the past several years, merchant account providers have started providing accounts to online business owners as well. Even though most banks still do not provide online merchant accounts due to the constant concern over credit card fraud, there are an increasing amount of online merchant account providers that offer services especially to those merchants that market their products online. Because of the high number of merchant account providers out there, it is important that you research all aspects of them, what services they provide, and especially the costs they impose, so that you don’t lose precious profits.

When looking into merchant accounts and providers, be aware that there are two types payment processing that they will offer. These are manual and real-time processing. Manual processing requires that the credit card number be delivered through a phone transaction, fax transaction, or an online order form. The order is processed manually by contacting the payment processing company (through an Internet connection) to verify the credit card number, or by using a point of sale machine to swipe the card at the time of purchase. This type of processing is more secure, less costly, and ideal for a low-volume merchant in a physical store location. Real-time processing is perfect for web-based merchants because the credit card is immediately processed at the time an order is placed. Pending verification and approval of the credit card, the customer receives notification (via e-mail) that his or her order is accepted and fund transfer is approved. This is the less secure of the two processing options.

5 Essential Factors
Starting to accept credit cards and debits cards at your business can be a challenging task. The Card Processing Industry is highly competitive, with many companies offering a broad range of services it is important for any business considering Merchant Services to understand these important factors; Benefits, Equipment Costs, Rates, Types of Processing and Terms of the Agreement e.t.c.

1. The many ways a merchant account will benefit your business.
•Boost Sales
Most everyone pays with credit or debit cards. Our society is all about convenience. If you make it easy for your customers to pay they will appreciate it. Most all businesses find an immediate increase in sales after they start accepting credit cards.
•Receive Immediate Payment
Rather than waiting for weeks or months to receive payment, funds will be deposited directly into your account in a matter of days. Money goes directly into the checking account of your choice.
•Reduce Staff Overhead
In receiving payment via credit card your business forgoes excessive time spent in sending overdue notices and making awkward phone calls to request payment.
•Avoid Non‐Payment
Many business owners are reluctant to pay a small percentage of profits to credit card processing companies, however, most find that the service quickly pays for itself in avoiding loss from non‐payment.
•Expanded Customer Base
The modern consumer expects to be able to pay via credit card and is often without cash, check, or other means of payment. Credit Card processing is a convenience for your customers and a professional foot forward for your company
•Go Virtual
Business has moved online. With the Internet, small and large businesses alike can have a global customer base. However, credit card processing is a requirement for effective ecommerce.
•Auto Charge Your Clients
For customers or clients on a revolving payment schedule it is usually easier for them and for your business to simply auto charges their credit cards each cycle.

2. Equipment Costs
•Buy
When you buy equipment you have complete control over the machine, but you are stuck with equipment that you have to maintain and update yourself. This also raises the start up costs tremendously.
Expensive Start Up
Buying equipment can be expensive. Terminals can cost up to $1,000. If you are looking for low start up costs this will not be the right option for you.
Training
You want to make sure that training of some form is included with your purchase. A quick introduction to using the advanced features of your terminal can help you get your money's worth.
Keeping Up With Technology
You don’t want to get stuck with an out‐dated machine. Technology is constantly changing and you want to keep up‐to‐date with the changes. You want to make sure the machine is compliant and can be used with the processor of your choice.

•Lease
A lease payment will often cost you far more than purchasing your equipment outright. You could be paying more than the machine is worth and usually you have to enter into some sort of contract. Make sure to read the entire contract.
No Replace or Repair
Most leasing companies specifically state that they have no responsibility to replace or repair your equipment should something go wrong. Many merchants enter into lease agreements thinking that they can get a warranty or service from the leasing company, and this is rarely true.
Hidden Fees
You should be especially aware of agreements that give the lease company authority to debit your account for additional fees for insurance at their discretion.
Know the Agreement
Many merchants lose track of their agreements over time and continue to pay monthly lease installments long after the lease term has expired. Don’t assume that your sales person will notify you at the end of your lease term. The lease company will continue to charge you, or even worse, renew your lease for another 48 to 60 month term. Be sure and send notice of intent to cancel or buyout at least 60 days prior to your lease expiration.
Locked In
Can I use this equipment with any processor? Some terminals are proprietary to a specific processor or network. You could end up paying thousands of dollars for a terminal that you cannot use with any other processor should you choose to change providers. Remember, changing processors has nothing to do with that third party lease. Even if you buy new equipment, you will still be responsible for the lease terms in your agreement. Be sure and ask
lots of questions when considering leasing options.
•Free
This is probably the best option for you and your business. If a company is offering free equipment you can take advantage of the low start up fees, new equipment and training that is often offered with a high quality merchant account processor.
Low start up
This can be a great option if you are looking to get set up to accept cards with no expensive upfront cost. You won’t have to worry about a chunk of money that is associated with buying a machine and you won’t have a monthly fee for leasing the machine.
You don’t own the machine
This is similar to the cell phone industry if you sign up for the service you receive a new phone at no extra cost. Usually the company will still own the machine if you want to cancel your contract. Even with a termination fee you will still save money by taking advantage of the free use of the machine.
New Equipment
With a quality processor you will have the most up‐to‐date equipment and they will make sure that it is compliant with of the latest upgrades. This can save time and money in the long run.

3. Rates & Common Fees
There are many different rates to consider when you are talking about credit card processing. If a processor offers you one flat rate you should look deeper into the actual contract to make sure you fully understand what the processor is charging. Make sure you have clear communication with your merchant account processor about fees and ongoing costs. Some typical fees include the following.
•Set up Fee: A onetime fee for starting a merchant account.
•Statement Fee: A fixed monthly fee that virtually all processors charge for your monthly statement
Provided to show how much processing you did in the previous month.
•Transaction Fees: Fee the merchant has to pay per transaction.
•Discount Rate: Flat percentage charged for every transaction
•Pin Based Debit: PIN Debit is a transaction in which the customer uses a debit card and enters in their PIN
Number. This functions essentially as an ATM transaction and the merchant pays a per item fee and PIN Network Fees for each transaction.
•Qualified Rate: The rate a merchant pays on a swiped transaction conducted face‐to‐face with a signature where the full contents of the magnetic stripe were read. Usually includes all consumer credit cards (and debit cards if a separate category for swiped Debit is not set up in the billing). These are the lowest risk transactions so they carry the lowest discount rates.
•Mid Qualified Rate: A higher rate than Qualified which is charged to merchants for processing a hand‐keyed transaction from consumers (and sometime rewards cards also cleared as a midqualified).
There can be a mid‐qualified rate for credit, debit, rewards cards, and more.
Primarily these are consumer cards which are hand‐keyed and meet all other requirements of Interchange.
•Non‐Qualified Rate: The highest rates charged to merchants. The transactions are typically swiped or keyed for business or corporate cards. Additionally, Visa transactions where a consumer cards are hand‐keyed without AVS will Downgrade to Non‐Qualified.
•Termination Fees: If you terminate your contract early this is the fee you are charged to get out of your contract.
•Monthly Minimum: The minimum amount the processor needs to have in fees. As long as your credit card processing meets or exceeds the minimum amount then you will not be charged. If your monthly fees are less than the minimum then you will be charged the difference.
Get it documented.

All of the above fees should be disclosed in writing at your request. Once you have a basic understanding of all the associated fees, you will have the knowledge necessary to obtain the best deal possible. Unfortunately, business owners often research only the difference in percentage rates. This is meaningless if the savings disappear in higher fees hidden elsewhere.
Every account is different and you need to speak with a knowledgeable sales person who can set your business up with the proper processing solution.

4. Find the Right Processing Solution for Your Business
Getting set up with the proper processing solution is very important. This alone can save you money by having the best rates for the types of cards your business accepts and through how you will be accepting the card.
Retail Solutions
For most retail businesses, including stores, hotels, restaurants, etc., the most suitable option for credit card processing is a simple landline terminal. This traditional point of sale system is set up phone line or IP. For face to face transactions, this is the best option for your business.
Wireless Solutions
If your business is mobile, and being tied to a storefront or landline is not an option, then wireless solutions may be what you need. The wireless terminal can process credit and debit cards wherever there is an available cell phone signal.
Internet Solutions
The fastest growing segment within the credit card processing industry is in online transactions. There are many different types of online gateways that will help your business begin accepting credit cards via the internet. Through web access and a secure website, you will be able to manually process credit card transactions from orders received offline, issue credits, void transactions, and view your online list of transactions, from any internet connection in the
world.

5. Terms of Agreement
Every merchant account provider is going to require some type of contract. This is going to be a very important factor in choosing a merchant account provider. You want to make sure you read the entire contract including all of the fine print to make sure you understand the entire offer.
Ask for the offer in writing
You need to have a copy of the agreement before you start a merchant. If you speak to someone on the phone ask them to email or fax you the application to make sure you have all the information.
Rate Disclosure
Make sure all of the rates are disclosed in the contract. Be very cautious when the rates are not listed, because you may run into some hidden fees.
Termination Policy
How long does the contract last? How much is the termination fee? Some companies offer a trial period and most all companies have a termination fee, similar to cell phone contracts.
Sales Representative
Can your sales representative explain the contract? You want to make sure you are dealing with an experienced representative; this alone can save you money. Ask relevant questions to make sure they are helpful and can set your account up properly.

Lastly
When you are ready to accept credit and debit cards and you are researching merchant account providers, make sure you keep all of the following factors in mind.
More than likely, you will have a long relationship with your merchant account provider. Therefore, you should have the utmost trust and confidence in them. Your provider should offer various services that will give you options in making your business transactions run smoothly. They should be able to accommodate several brands of credit cards (Visa, MasterCard, Discover, American Express, etc.), in addition to providing other payment alternatives, such as PayPal. They should have a record of impeccable service and reliability. They should also be first-rate customer service providers. Any problems should be handled discreetly and quickly. Despite the seeming necessity of having a merchant account provider, it can make or break your business with its fees and service. That is why it is important to know the ins and outs of a merchant account provider, and to choose one carefully

Pricing Strategy a tool to position your company ahead of others

Taken a glance back to the last issue of the of Marketing Canada journal, summer 2009, vol 5, issue 3, I deal on the topic, “How Effective and Efficient is your Pricing Strategies” Today we will be going forward to see what pricing strategy can do to your business; how much should you charge for your products and services.
Pricing as be said over time as one of the most difficult, yet important part of a company strategies , issues you must face as a company is how much to charge for your products and services. Basically there is no one single right way to determine your pricing strategy, but there are some reasonable guidelines one need to follow in arriving at a pricing decision.
Let take a look at the definition of pricing again to have a clearer view of the topic.
What is pricing? Pricing is a method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products.

What is pricing Strategies? Price planning that takes into view factors such as a firm's overall marketing objectives, consumer demand, product attributes, competitors’ pricing, and market and economic trends.
The pricing strategy of your business can ultimately determine your fate. As a business owner you can ensure profitability and longevity by paying close attention to your pricing strategy.

Before we go further, let quickly look at some factors the company need to consider:

Positioning - How are you positioning your product in the market? Is pricing going to be a key part of that positioning? If you're running a discount store, you're always going to be trying to keep your prices as low as possible (or at least lower than your competitors). On the other hand, if you're positioning your product as an exclusive luxury product, a price that's too low may actually hurt your image. The pricing has to be consistent with the positioning. People really do hold strongly to the idea that you get what you pay for.

Demand Curve - How will your pricing affect demand? You're going to have to do some basic market research to find this out, even if it's informal. Get 20 people to answer a simple questionnaire, asking them, "Would you buy this product/service at Price X? Price Y? Price Z?" For a larger venture, you'll want to do something more formal, of course -- perhaps hire a market research firm. But even a sole practitioner can chart a basic curve that says that at Price X, X' percentage will buy, at Price Y, Y' will buy, and at Price Z, Z' will buy.

Cost - Calculate the fixed and variable costs associated with your product or service. How much is the "cost of goods", i.e., a cost associated with each item sold or service delivered, and how much is "fixed overhead", i.e., it doesn't change unless your company changes dramatically in size? Remember that your gross margin (price minus cost of goods) has to amply cover your fixed overhead in order for you to turn a profit. Many entrepreneurs under-estimate this and it gets them into trouble.

Environmental factors - Are there any legal or other constraints on pricing? For example, in some cities, towing fees from auto accidents are set at a fixed price by law. Or for doctors, insurance companies and Medicare will only reimburse a certain price. Also, what possible actions might your competitors take? Will too low a price from you trigger a price war? Find out what external factors may affect your pricing.

What next the company needs to do is to determine the pricing objectives. That is the aim of your pricing?

Short-term profit maximization - While this sounds great, it may not actually be the optimal approach for long-term profits. This approach is common in companies that are bootstrapping, as cash flow is the overriding consideration. It's also common among smaller companies hoping to attract venture funding by demonstrating profitability as soon as possible.

Short-term revenue maximization - This approach seeks to maximize long-term profits by increasing market share and lowering costs through economy of scale. For a well-funded company, or a newly public company, revenues are considered more important than profits in building investor confidence. Higher revenues at a slim profit, or even a loss, show that the company is building market share and will likely reach profitability. Amazon.com, for example, posted record-breaking revenues for several years before ever showing a profit, and its market capitalization reflected the high investor confidence those revenues generated.

Maximize quantity - There are a couple of possible reasons to choose the strategy. It may be to focus on reducing long-term costs by achieving economies of scale. This approach might be used by a company well-funded by its founders and other "close" investors. Or it may be to maximize market penetration - particularly appropriate when you expect to have a lot repeat customers. The plan may be to increase profits by reducing costs, or to upsell existing customers on higher-profit products down the road.

Maximize profit margin - This strategy is most appropriate when the number of sales is either expected to be very low or sporadic and unpredictable. Examples include custom jewelry, art, hand-made automobiles and other luxury items.

Differentiation - At one extreme, being the low-cost leader is a form of differentiation from the competition. At the other end, a high price signals high quality and/or a high level of service. Some people really do order lobster just because it's the most expensive thing on the menu.

Survival - In certain situations, such as a price war, market decline or market saturation, you must temporarily set a price that will cover costs and allow you to continue operations.

Note: it is important after having the information so needed and clear what we are trying to achieve, then we take a look at the pricing methods to help us achieve our real numbers.
Below are the Pricing Methods to consider

As mention earlier, there is no "one right way" to calculate your pricing. Once you've considered the various factors involved and determined your objectives for your pricing strategy, now you need some way to crunch the actual numbers. Here are four ways to calculate prices:

Cost-plus pricing - Set the price at your production cost, including both cost of goods and fixed costs at your current volume, plus a certain profit margin. For example, your widgets cost $20 in raw materials and production costs, and at current sales volume (or anticipated initial sales volume), your fixed costs come to $30 per unit. Your total cost is $50 per unit. You decide that you want to operate at a 20% markup, so you add $10 (20% x $50) to the cost and come up with a price of $60 per unit. So long as you have your costs calculated correctly and have accurately predicted your sales volume, you will always be operating at a profit.

Target return pricing - Set your price to achieve a target return-on-investment (ROI). For example, let's use the same situation as above, and assume that you have $10,000 invested in the company. Your expected sales volume is 1,000 units in the first year. You want to recoup all your investment in the first year, so you need to make $10,000 profit on 1,000 units, or $10 profit per unit, giving you again a price of $60 per unit.

Value-based pricing - Price your product based on the value it creates for the customer. This is usually the most profitable form of pricing, if you can achieve it. The most extreme variation on this is "pay for performance" pricing for services, in which you charge on a variable scale according to the results you achieve. Let's say that your widget above saves the typical customer $1,000 a year in, say, energy costs. In that case, $60 seems like a bargain - maybe even too cheap. If your product reliably produced that kind of cost savings, you could easily charge $200, $300 or more for it, and customers would gladly pay it, since they would get their money back in a matter of months. However, there is one more major factor that must be considered.

Psychological pricing - Ultimately, you must take into consideration the consumer's perception of your price, figuring things like:

Positioning - If you want to be the "low-cost leader", you must be priced lower than your competition. If you want to signal high quality, you should probably be priced higher than most of your competition.
Popular price points - There are certain "price points" (specific prices) at which people become much more willing to buy a certain type of product. For example, "under $100" is a popular price point. "Enough under $20 to be under $20 with sales tax" is another popular price point, because it's "one bill" that people commonly carry. Meals under $5 are still a popular price point, as are entree or snack items under $1 (notice how many fast-food places have a $0.99 "value menu"). Dropping your price to a popular price point might mean a lower margin, but more than enough increase in sales to offset it.
Fair pricing - Sometimes it simply doesn't matter what the value of the product is, even if you don't have any direct competition. There is simply a limit to what consumers perceive as "fair". If it's obvious that your product only cost $20 to manufacture, even if it delivered $10,000 in value, you'd have a hard time charging two or three thousand dollars for it -- people would just feel like they were being gouged. A little market testing will help you determine the maximum price consumers will perceive as fair.


HOW TO COMBINE ALL THESE CALCULATIONS TO COME UP WITH A PRICE.

Your price must be enough higher than costs to cover reasonable variations in sales volume. If your sales forecast is inaccurate, how far off can you be and still be profitable? Ideally, you want to be able to be off by a factor of two or more (your sales are half of your forecast) and still be profitable.

You have to make a living. Have you figured salary for yourself in your costs? If not, your profit has to be enough for you to live on and still have money to reinvest in the company.

Your price should almost never be lower than your costs or higher than what most consumers consider "fair". This may seem obvious, but many entrepreneurs seem to miss this simple concept, either by miscalculating costs or by inadequate market research to determine fair pricing. Simply put, if people won't readily pay enough more than your cost to make you a fair profit, you need to reconsider your business model entirely. How can you cut your costs substantially? Or change your product positioning to justify higher pricing?
Pricing is an important factor in determining the success of the company, you’re certainly going to make a profit on your products and services are taken the right step in pricing decision. Always remember something is ultimately worth only when someone is willing to pay for it.