Identifying and Solving Issues that Inhibit Scaling – By Mark Standfield

by Jenae Reid on August 10, 2017

 

Most advertisers focus intently on overcoming marketing and advertising limitations, because it’s assumed these are the primary issues preventing growth.

While these certainly are valid concerns, there are other challenges that hinder the ability to scale -challenges that need just as much attention as leads and conversions if sustainable growth is the objective.

What’s Impacting Growth?

Oftentimes, it can be difficult to secure payment processing capabilities and maintain MIDs (merchant identification number). While these tasks aren’t easy, they are necessary. Because without adequate processing volume, sales and profits can’t be scaled.

That’s why it’s important to understand the risk KPIs that processors are monitoring. Why would a MID be lost, and why would additional volume requests be denied?

The answer is excessive chargebacks–the number one reason why merchant accounts are closed.

MIDs are lost because chargeback thresholds were breached. Because thresholds were breached, the business is perceived as a risky investment. Processors will be reluctant to offer additional accounts because they haven’t received proof that risk can effectively be mitigated.

Consider a very common scenario:

Industry experts provide advice on how to boost conversions. Their tips work–more sales are secured. But all too often, the advice is lacking information about the big picture and what conversion ratios can bring–which is high chargeback ratios.

Without insight, as to a better solution, each merchant account is analyzed one by one in an effort to determine what is needed to keep that particular MID from breaching thresholds. This process is repeated again and again, account after account, month after month.

Unfortunately, this just puts a temporary band-aid on the problem. Sustainable results aren’t achieved.

Is there a better solution?

Overcoming Challenges

Here’s the sustainable option that will yield long-term growth.

Risk is monitored in real time, so an increase in chargeback activity is detected immediately. Then, the reason why chargebacks are occurring is researched, so the underlying issues can be identified and resolved. This creates a processing portfolio with sustainable health, where risk is promptly and effectively mitigated.

This process will ensure current accounts are maintained, but more importantly, it builds credibility in the industry. Processors are more likely to honor requests for additional volume if risk is successfully mitigated for the MIDs that have already been granted.

How is risk monitored in real time? And how is the cause of chargebacks uncovered?

The secret lies in the data.

Combining data from all platforms in a single access point provides complete transparency. Chargeback activity and corresponding KPIs can be monitored by applicable variables–like traffic source, rebill cycle, price point, and more. Patterns can be established and, more importantly, abnormalities will be revealed. Unlike other risk mitigation strategies that produce short-lived results, this data-driven intelligence yields long-lasting chargeback prevention.

While this concept might be revolutionary, compared to what is commonly practiced, the idea really isn’t all that foreign. After all, data analysis is applied to every other component of affiliate marketing. Why not risk mitigation?

 

Mark Standfield is president of Midigator, a data-driven and technology-enabled chargeback management service. Visit http://go.midigator.com/advertisers

This article appeared in issue 39 of FeedFront Magazine, which was published in July 2017. https://issuu.com/affiliatesummit/docs/feedfront-39

 

 

 

 

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