"The Desktop Global Marketer" (tm)

   A free on-line newsletter of Sidereal Designs, Inc.,
   for Internet Entrepreneurs, and those who are
   considering becoming one.
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                  July 1998
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   "The Desktop Global Marketer" is free, and may be 
   re-published freely with permission. We encourage 
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   	jamie(at)siderealdesigns.com
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Your enterprise is on line. Should you be collecting money through
on-line transactions? 

Until very recently consumers have been shy about making purchases
over the Internet. The evidence is that this resistance is now
declining; web-stores are reporting that the ratio of purchases to
page visits is rising. Probably the initial reluctance has been more
attributable to consumers' discomfort with a novel medium for
transactions than to any inherent objection to Internet-based
commerce. Concerns about transaction security have been widely cited,
and they are important, but these same purchasers will happily give
out their credit card numbers to a stranger over the telephone, or
leave their charge-slip carbons in a store's trashcan.

What we are seeing is the initial stages of an economic
sea-change. The U.S. government's recent report, "The Emerging Digital
Economy," (http://www.ecommerce.gov/emerging.htm) which we will examine
in a future issue has some astonishing implications for the importance
of e-commerce in the near future. The current rash of investments in
web "portal sites" by major corporations tells another part of the
story. The time of e-commerce is come.

What does this mean for you? Your first concern with your on-line
presence should be marketing your products and services effectively to
a global audience. This is always true whether you are actually
closing transactions on line or not. Only once you have a good virtual
presence in cyberspace, is it time to ask if you want to use it to
actually collect money. This question is not the no-brainer it might
seem; it costs time and money to do it right, and you want to be sure
the returns will justify the investment. This is a separate issue from
the return from the global marketing and communication benefits of an
on-line presence.

You certainly don't have to collect money through your web site to be
a successful virtual marketer, and it may not even make sense for your
business or profession. At the Sidereal Designs web site, we don't
take money on line because most of our services are contracted to
clients with whom we have a long-term relationship, not impulse
buyers. We trust them to send us a check once in a while as things get
done. On the other hand, we might market tapes or other educational
materials on virtual marketing at some time in the future and, when we
do, we will be right there taking credit cards on the web.

If you are selling things that can be delivered on-line, such as
subscriptions, information, reports, educational materials, automated
services and the like, and which exist in some pre-packaged form or
which can be generated in real-time, then it's almost certain you
should think about closing transactions on line unless the unit cost
of your goods is very high. Similarly, if you are selling physical
goods which can be quickly shipped, and which the consumer need not
directly inspect in order to select (e.g., books, CD's,) then again it
is a good bet. Other situations require more careful consideration.

If you do decide that closing transactions virtually makes sense for
you, then without question the ability to take automated orders from
credit cards is the premiere method of choice. The reason is simple;
it's immediate. If the customer has to go through some delay and
trouble such as writing to you or calling you (perhaps at a later time
if it's 2 AM where they are,) then you will lose a large percentage of
people who otherwise might have purchased.

Because of the central importance of this means of payment, I'm going
to devote an entire future issue of The Desktop Global Marketer to the
methods and costs and pitfalls of setting up this kind of e-commerce.
Because it is (relatively) complicated and expensive, however, I want
to discuss some other alternatives here which, while not as elegant or
effective, may still be suitable for the beginning virtual marketer
just venturing into the on-line transaction arena.

Here they are:

1) Sometimes it pays to mention the obvious: if you are already in
business, you must have some means of collecting money
currently. Before doing anything else with your on-line sales,
consider if it can't start out as a funnel to bring people into your
existing procedure. If you take orders during some business hours with
an 800 number, put it on the web site. Even if you just take checks in
the mail, put your purchase instructions out there. If you have the
page up for marketing and information anyway it doesn't cost you
anything, and even one sale is a win. You would be amazed how many
firms on the web overlook this.

2) Another option is 'virtual money.' There are several organizations
which accept ordinary funds and then issue virtual cash which can
easily be spent on-line with participating merchants. See for example
the "E-Cash" issued by the Mark Twain Bank of St. Louis, MO
(http://www.marktwain.com/ectable.html.) This is a good basic idea and
may eventually become economically important, but at present too few
of your customers have it. You might consider it as an auxiliary
method, however.

3) There are two reasonable ways to collect money using the telephone
in conjunction with your web site, assuming you have something better
to do than sit by the phone all day (and night.) One is to contract
with a fulfillment service that will answer a number for you
twenty-four hours a day and take credit card orders. You can put the
number on the web site as if it were your own, and they will answer
it with your company name. No one will know you're not a giant
corporation, and such services are not terribly expensive. There are
likely several in your local phone directory.

4) The second "all-hours" telephone method is even cheaper and uses a
nice feature of the '900' number system to collect your money. These
numbers are often used to sell various spoken products by the minute,
but you can use them in the following way as well: When the customer
clicks to order your product, they are given a product code and a 900
number to call (which they can do at any time of day.)  When they call
it and key in the product code, the price of your product is
automatically charged to their phone bill. They are automatically
given a password over the phone which they then enter on your web
site's order form. The form is sent to you for order fulfillment (or
if appropriate they immediately get to download your product) and the
phone company collects the money and sends it to you, less a service
fee. This requires an intermediate step for the customer, but it is
relatively quick and effective and does not require a credit card at
all, nor even secure transaction software. Contact your local phone
company for details.

5) If you have a product or service that has to be delivered later in
any case, then it's less important to verify credit immediately. For
this situation there is a kind of 'half-way' solution, which is to
arrange only for secure transmission methods such as VeriSign to
protect your customers' card numbers. Then have them fill out an order
form with their credit card number at your website, but don't go the
whole way with on-line verification systems. The information they
provide can be stored at your site until you are ready to process it,
verify their credit off-line, and fill the order. In general this will
be much less complex and costly. (One issue to be aware of here is
secure access to the information via your own connection - this is
tricky; check with your webmaster.)

If none of the above seem appropriate for your situation and you want
to do on-line transactions, then you'll want to go for on-line credit
card verification. We'll discuss the ins and outs of this process in
an upcoming issue.
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