I recently attended one of the largest in-person gatherings of online marketing professionals. I asked each of the people I met, close to 15 large, name brands the same question:
What % of your total revenues are you spending on payments processing?
Not one single eCommerce manager could answer the question, even within a ballpark.
Why do you all think no one’s looking at this?
Some ideas I thought of:
- Overemphasis on top line vs. bottom line
- “not sexy” relative to cutting CPA or increasing conversion rate
- lack of knowledge among GMs about how payments work (a corollary might be that there are assumptions that payment processing costs like electricity—necessary, but fixed).
Take a look at your payments metrics. Evaluate the competition. Run a quick model—it only takes an hour or so. You might be surprised about how much opportunity there is for you to be a hero and save some money.
Then get in there and make those payments vendors give you back some of your site’s hard earned cash. In this economy, everyone can use a little extra profit, right?
Personally, I’m taking a good hard look at Visa. Given its business model, it’s as close as we’re going to get this year to a blue-chip IPO.