In today’s challenging economy, retailers must be able to offer flexible payment terms and offers that are tailored for the individual customer’s lifestyle. These same tools must also support marketer strategies to grow average order value (AOV) and profitability through sophisticated up sells, cross sells, and auto-ship / continuity programs. Matching your order entry and merchant account process with the needs of your business and the needs of your customer is essential in today’s complex direct-to-consumer (D2C) world. But with an order management system (OMS), your company can collect all its order data, leverage the best payment processing partners, and, in turn, improve results and boost your bottom-line.
How? Well, first you need the right order management solution.
Be Vendor-Neutral
Your OMS should be vendor neutral. This approach allows the marketer to manage multiple service providers and even payment processors – to test for the best and mitigate risk. The needs of any given company may be different depending upon your products, sales channels and how these elements of your business match up with the capabilities of your payment processor or independent sales organization (ISO). You want to ensure flexibility by choosing an OMS that supports multiple payment processors and multiple payment methods.
Know the Market
The bottom line is: Order management providers should be able to help you match the best processors for your product or market niche. Order management providers that support multiple payment processors can easily process campaigns with specific processors to best meet the needs of the individual campaign, thus reducing risk and cost.
In terms of deciding between ISOs and payment processors, it is important to keep in mind that they have different value propositions, market experience and technologies. ISOs, in general terms, are “middlemen,” as they are typically not performing the services sold. And individual processors have different tolerances for risk that are often connected with their specific experience with certain product categories, or business focus.
Align Payments to Programs, and Programs to Payments
Especially for those that utilize continuity and auto-ship programs, integrating and matching the right processor and OMS to the needs of your business can make a substantial difference to your top- and bottom-line.
For example, order management systems can report on a potentially expired card at the outset of a continuity program, and specific payment processors can also use BIN (Bank Identification Number) codes to recapture a new expiration date for an existing card. Your OMS should be easily reconfigurable to retry declined cards multiple times, with configurable business rules that control the frequency and number of times that reauthorization is attempted. This approach alone can often yield a 40%+ success rate. An OMS can then be used to automatically move fatally declined customers into an outbound call queue to discover the reason for the decline, make alternative payment arrangements, and recover the customer.
Multiple payment methods can also increase revenues and even improve cash flow. And for merchants that need to realign their programs to meet client needs, order management business rules can help the marketer turn on a dime, with dynamic tools to change the payment and shipping cycles, payment method, the quantities shipped, discounts, and other terms. “Save the customer” and “save the sale” techniques can often result in recovery of up to 60% of potentially cancelled sales! And your OMS and merchant account can play an important role in this process.
Process by Item
On a newer front, the latest order management technologies base payments on the item being processed, instead of the order being processed, allowing the marketer to have multiple processors that are precision matched to offer or payment method preferences. A good example would be a call center that closes an order on a primary offer and then upsells a companion product and then closes a club offer. While this is all one order for the customer, each item in this offer could be from different vendors and processed through different merchant accounts. The OMS should include tools to automatically tie these items back to a single customer order. This approach allows the merchant to use specialty processors that will provide the best rates for certain products or services, and other processors with different specialties or strengths. Matching the processor to the item reduces marketer risk, and reduces costs. And the ability to tie payments back to the item and customer order provides rapid resolution to any customer service disputes or potential charge-backs.
Use Best Practices
Don’t wait to select and setup a merchant account. Your order management provider should work with you every step of the way when setting up a campaign and integrating a new merchant account –they can help you to design and build offer strategies and an offer process, scripts, business rules, and a sales process designed to reduce risk and increase sales. Together, by sticking to a set of best practices, your OMS provider and your processor can work with you to decrease charge-backs and returns, maximize your sales and conversion performance –ultimately boosting your bottom-line and reducing your risk.
