Millions are spent daily trying to understand customers. Understanding why your customers shop for your products in the first place can help you better meet their needs. It also ensures you maximize sales and get the most out of your advertising dollar. However, understanding how your customers buy is just as important as understanding why they buy. A unified approach to how the customer buys leads to oversights, which is a lesson learned this week by none other than Chris Christie.
The New Jersey Governor recently admitted to an $800 million shortfall when it came to online gambling in New Jersey. The bill that was expected to generate nearly $1 billion in revenue in the first year for the State; However, the estimates were recently downgraded to $200 million, and it turns out, one of the reasons is credit card processing.
“Currently, Visa and MasterCard are accepted for online gambling services, while American Express and Discover are not. Visa approves only 44% of requested transactions, but Mastercard approves 73% of requests.” reported payment processors, Vision Payment Solutions. “A lot of transactions are being declined by credit card merchant services, and only roughly 44% are actually getting approved.”
New Jersey knew there was a market. However, the “hows” of the conversation were unfortunately not discussed, leading to the shortcomings. So with cash, credit cards, ecommerce markets, mobile card readers, and everything short of bartering their possessions, how do you target customers by the way they purchase?
Understanding the Online Shopper aka the Researcher
Customers who primarily buy online tend to be your researchers. These types of customers pay by credit or debit card, and usually search multiple store sites for the best value or items with the most features before finally making a purchase. They are your comparison shoppers. These types of customers tend to be the most cautious with their purchases and also value warranties, generous return policies and internet safety.
Because these kinds of customers value getting the most for their dollar and feeling secure about handing over their card information, you can win them over in a variety of ways. Showcasing your products and pricing along with listing the products and pricing of your competitors shows customers that you offer the best deals and saves them research time. Offering money-back guarantees and ensuring a high degree of security at the point of sale increases the likelihood that customers who primarily buy online will buy from you.
Cash and the Impulse Buyer: What Does this Customer Buy?
The less an item or service costs, the more likely someone is to buy it impulsively. Although impulsive people tend to make impulse buys more than others, on the whole, people make impulse purchases based on two factors: availability of funds and want/need of product or service. A customer with money in her pocket and a desire for something she doesn’t have is the most likely to make an impulsive buy, whether she’s buying a cup of coffee or a new laptop. Still, because large purchases take a bigger chunk out of a customer’s budget, people are far less likely to impulsively purchase big-ticket items like a refrigerator or a new vehicle.
Can Your Business Benefit from Impulse Buying?
The answer to this question is, in many cases, industry specific. Coffee shops, inexpensive restaurants, grocery stores, and stores that carry home goods and décor are among the most likely to capture the impulse buy dollar, simply because people tend to buy these items on impulse. If you’re running an electronics store or a carpentry business, for example, most people simply won’t buy from you on impulse because they need time to consider their purchase and even plan for the cost. However, you can potentially increase your sales volume if you have the ability to take down payments in an instant.
Mobile Card Readers Are Changing Every Industry
Small business owners and entrepreneurs can increase their overall sales volume by adding mobile card readers to their smartphones. Mobile card readers allow you and your sales force to take payments anywhere you can bring a phone. A mobile card reader allows you to take credit card payments through a small device you attach to your phone. This makes it easier for customers to buy small items when they don’t have cash available. A mobile card reader also allows customers to prepay for services or put money down to reserve an item on the fly.
A mobile card reader is a small device that you can attach to your phone or tablet as needed to swipe credit cards for business transactions. Several companies including Square and Paypal offer mobile card readers and provide credit card processing services for a small percentage of sales. Costs to your business are about the same as having a traditional card processing service, and getting paid from a reputable service provider isn’t much different, either. Most providers don’t charge businesses for the card reader itself because they earn income on sales instead. In most cases, you will need to install a specific phone app to be able to process payments.
“Smart strategies and development plans for mobile should rely on an in-depth understanding of the user and be designed to deliver a meaningful experience. For the mobile market in particular, there is no ‘one-size-fits-all’.” said mobile app developer Perpetuating in a recent blog post.
Mobile card readers are already working their way into every day businesses like coffee shops and food trucks, as well as larger retail stores like REI. The biggest advantage businesses have is really the mobility of the mobile processor, allowing them to take cards anywhere. Customers can pay anywhere without cash or a nearby ATM. This opens up opportunities to reach customers in strategic locations previously inaccessible or cost effective and stimulates the demand for creativity and innovation in marketing and sales.
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