20 Sep

Five Ways Your Small Business Can Benefit From Back to School Promotions

From kindergarten to college, class will soon be in session for another year, if it isn’t already. Students aren’t the only ones who should prepare. As a business owner, put yourself in an advantageous position by capitalizing on products and services that cater to everyone going back to school.

Put Social Media to Work for You

You can harness the power of social media sites, including Instagram, Facebook, Snapchat and Pinterest, to engage students of all ages. These ubiquitous platforms offer you countless ways to spread the word about your business.

For instance, spark customer interest by sponsoring a “selfie” contest featuring some of your products, with the winner receiving a gift card or shopping spree. Offer coupons to customers who provide you with their contact information. Make the most of your website and social media pages to get people chatting and tweeting about everything you have to offer, and encourage your loyal customers to write reviews. The more buzz you generate, the higher the likelihood of attracting new patrons.

Making your pitch on local social media pages can be particularly lucrative. Post coupon ad discount information, being sure to tag area schools. Once you do, parents will tend to share the news with their friends. Before long, the buzz about your promotions might even go viral in your community.

Tap into the Benefits of User Generated Content

If there is any one group of customers who are savvy about social media, it’s students. Let them show off their online prowess while simultaneously boosting social media interest in the products and services you are offering. Encourage buyers to take videos of themselves choosing and using your products or services. Set up a commerce gallery that allows your customers’ friends to easily click on and purchase what they see. Set up a customer poll to see what products they like best. The hashtags they use will lead to more social media sharing. From your perspective, more is almost always better.

Help Your Customer Save Money on the Products They Want
Most parents – and even students themselves – are reconciled to the idea of making a significant financial investment in products related to a return to the classroom. If you carry basic supplies such as pens, pencils, notebooks and calculators, offer sales and promotions. Even retailers of household décor products can capitalize on young consumers’ desires to make a fresh start and up their study game, whether in the dorm or even in their own bedrooms. Whatever you are selling, consider creating combination packs at discount prices. For instance, bundle a notebook, calculator and protractor together for the young geometry student.
If you own a salon or spa, provide a discount on a haircut and manicure package that will ensure your customers are looking their best for the first day of classes. If you’re not sure what products to highlight, take some time to check out Pinterest and other websites that cater to younger customers. It won’t be long before you know what styles and products are trending for the new back-to-school season.

Now that you have an idea of what products you plan to feature in your promotion, it’s crucial that your target customers receive the word of your upcoming sale. Use social media, email blasts and good old-fashioned marketing techniques such as signage and notices on bulletin boards to create interest and excitement.

Host Events
If your goal is to sell products and increase your base of student customers, one of the best vehicles is to invite them to your shop or restaurant for a specific event. Of course, the nature of the celebration depends on the focus of your business, but examples are back-to-school open houses where door prizes are offered, movie screenings or concerts held in coffee shops or restaurants, or celebrity meet-and-greets in clothing retail shops.

Although young people will come into your place of business ostensibly to take part in the specific back to school event you are sponsoring, they will also automatically be exposed to the products and services you offer. If you combine your party with product discounts good only for that particular day or evening, you are even more likely to gain sales.

Reward Customer Loyalty
As a business owner, one of your chief goals is to encourage patrons to keep coming back long after back to school time. One of the best ways is through a customer loyalty program. Chances are good that your existing payment processing system might even be equipped with the tools to help you get started. With the influx of potential customers available to you during the back-to-school season, there’s no time like the present to get your program off the ground.
People love to earn points and rewards. If you own a restaurant or coffee shop, you can initiate a punch card system that gives students a free latte after 10 visits or results in a discount on their next purchase after they spend a certain amount of money. These types of incentives are great ways to encourage repeat visits. While customer loyalty programs furnish benefits to your patrons, they also give you an ever-growing list of customers and their contact information. As you enhance the scope of your marketing strategy, this gold mine of data can be the foundation of social media and email campaigns as well as providing potential subscribers to your newsletter.

As the doors of elementary, middle, high schools and colleges swing open for another academic year, use this time to reward existing customers, attract new ones and have a little fun. Giving people the chance to enjoy a time of year that can be expensive and stressful will ultimately boost your ongoing popularity with your patrons and keep them coming back long after the novelty has worn off of the new school year.

14 Jul

The Illusion of Flat-Rate Pricing for Merchant Processing


Both Stripe and PayPal/Braintree charge flat-rate pricing, an increasingly popular cost structure for processors. And it’s easy to see why – simplicity is attractive. Flat rate pricing is easy to understand and it saves merchants from the annoyance of sifting through complex credit card processing statements. There’s no risk of missing some fine print and — at least on the surface – it appears to be totally transparent.

The flat rate pricing illusion

Flat rate pricing is simple. Credit card processing is not. In fact, flat rate pricing isn’t designed to be competitive at all–the attraction comes from the ease in which merchants can understand the structure. It’s a marketing tactic. With all the intricacies involved in credit card processing, it’s all but impossible for processors to charge a flat rate that is competitive while still remaining profitable as a company. Here’s why.

Whether they’re aware of it or not, every transaction a merchant processes incurs three fees:

1. A fee to the issuing bank, e.g., Chase (interchange)
2. A fee to the card brand, e.g., MasterCard or Visa (assessment)
3. A fee to the credit card processor

While assessments are fixed costs, the interchange rate is not. This rate can vary from as low as 0.05% to over 3%. Processors that charge a flat rate need to account for every possible interchange rate. The good thing about flat rate pricing is that there’s no guesswork and it’s easy for a merchant to figure out how much it’s going to cost them to process their payments. Unfortunately this convenience comes at a cost of spending about 20% more than they have to on processing costs.

Stripe and PayPal/Braintree use a fixed percentage of volume pricing structure of 2.9% + $0.30 per transaction. This is on the higher end in comparison to interchange rates, and for merchants with low-ticket transactions that extra $0.30 can be a real burden.
“Interchange Plus” pricing optimizes costs
Quite simply, “interchange plus” pricing means the merchant pays the interchange rate plus a fee to their credit card processor. That fee is usually measured in basis points. Each basis point is 1/100th of a percent.
For example, let’s say you’re a retail business working with a processor that charges 70 basis points for a fee of 0.70%. If you ran a card-present transaction of $50 with an exempt Visa check card, the interchange fee would be 0.80% + $0.15 for a combined rate of 1.5%. That gives you an interchange rate of $0.75 + $0.15 for a grand total of $0.90 for the transaction. That same transaction through Stripe or PayPal would cost $1.75!


Another cost of processing with many flat rate processors is the funding timeline. Since companies like Stripe are technically payment aggregators, it’s not cost-effective for them to maintain the reserve required to fund their clients in a timely manner.

Through PayPal/Braintree, it takes 48 hours to receive your money. With Stripe, it takes eight business days. That’s seven days between purchase and funding, which can become a huge burden for many merchants, and can complicate accounting long-term.

Another thing–aggregators may process payments under one large merchant account rather than having separate accounts for each of their merchants. In this scenario, the money your customers pay through these services does not belong to you. Since the aggregator is the one with the merchant account, it technically owns the money being processed. The service provider then issues a payment to you for the amount of the transaction.

Other payment processors, like Aperture Payment Solutions, will always have you open and own your merchant account, a process that can be as quick as a few hours. For this reason, any money that your customers pay only ever belongs to you, and you’ll receive your money in as little as one day.
With a little education on pricing, business owners don’t have to settle for a flat-rate structure. Even smaller, low-volume businesses and startups should expect transparency, access to their money when they need it, and a full suite of developer tools. Expect more from your processor – you deserve it.

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