The Marketing Mirth Blog: Laughter and Insights

Troubling Trend In Small Business Merchant Services

rickstartmarketing@gmail.com (Rickstart Marketing) — Fri, 04 Aug 2023 23:21:55 GMT

Many business owners are finding ways they can accept credit cards with no fees from new vendors. But what are the hidden implications of this transaction?

Introduction

I first noticed this trend as I was buying some snacks at a gas station convenience store. Approaching the register, a sticker on the credit card processor said 35 cents added to all debit transactions. 35 cents? No big deal, right? Yet, I was still struck by a feeling of somehow being manipulated here. Why should I pay some kind of service charge for choosing to use a more convenient payment method?

I realized later how the whole system worked, and why it was attractive to small businesses to try and recoup some of their costs using this methodology. In 2016, I opened my own retail shop and had to decide on a way to accept credit cards (I chose the Square POS system). Square typically charges 2.9% and .10-.30 cents to the seller per credit or debit transactions. With over 60% of my transactions being credit card purchases, monthly costs for merchant fees could really add up.

In recent years, there has been a growing trend of merchant services providers offering "no-fee" credit card processing. These programs typically work by charging businesses a higher percentage markup on each transaction; however, these are passed on to the customer in the form of a higher price when using a credit or debit card. When paying with cash, the customer would be presented with a discount. The seller is still technically being charged by the merchant services provider. Through some clever selling, and math, the idea presented is that the seller actually saves money vs. traditional merchant service systems like Square.

While these programs may seem appealing to businesses at first, there are a number of hidden costs that can make them more expensive in the long run. Additionally, it can make it more frustrating for customers, as they may feel penalized for choosing to use one type of currency over another. I suggest doing your research on how the numbers compare in your situation before agreeing to any merchant services contract. Let's take a closer look.

How do no-fee merchant services work?

Typically, a merchant services provider will charge a business a percentage of each credit card transaction as a fee. This fee is known as the interchange rate, and it is set by the credit card networks (Visa, Mastercard, etc.). In addition to the interchange rate, the merchant services provider may also charge a processing fee, which is a flat fee per transaction.

No-fee merchant services programs work by charging businesses a higher percentage markup on each transaction. This markup is then passed on to the customer in the form of a higher price. For example, if a business normally charges $10 for a product, it may charge $10.40 for the product if it is using a no-fee merchant services program.

This, when done correctly, is perfectly legal and agrees with the merchant agreements set forth from the credit card companies.

In my experience, I have worked with small business owners who were not aware of how to properly present their price in such a scenario. Not presenting the higher end prices on consumer-facing products and instead doing a markup at the register could be a violation of their merchant agreement, sometimes even state law ! So those of you who are in a "no-merchant-fee" agreement, please look into this!

Hidden costs in merchant services

In addition to the higher prices that customers may pay, there are a number of other hidden costs that can be associated with no-fee merchant services programs. These costs include:

Monthly Terminal Rental Fees: Merchant services providers that offer no-fee processing often charge fees for equipment use. This can be true of other service provider programs, too.

Hidden fees: I've witnessed a contract that contained as much as $65 a month in service fees that were simply add-ons that gave no additional value. Merchant services providers may also charge a variety of hidden fees, such as setup fees and cancellation fees. These fees can add up over time and make the no-fee programs more expensive than it appears.

Poor customer service: Be wary and do an online reputation search for customer service for the Merchant services providers you are considering. Poor customer service ratings could mean hours on the phone for you later down the road. This is because they are often focused on signing up new businesses and not on providing good customer service to existing customers.

Long term contracts: One of the things I liked about using Square for my services was that there were no contracts involved. I could switch vendors at any time. At Rickstart Marketing+, I've worked with clients who had signed up for multi-year contracts. The fine print included large cancellation fees. That made the client feel helpless in making any changes at present.

Can no fee programs benefit businesses?

Certainly, based on my analysis there are situations where a business may benefit from no-fee merchant services programs. If the average transaction amounts are lower, the business does want to offer a cash discount to customers, and the merchant services program is void of the hidden fees we talked about earlier, this can be better on the bottom line.

However, the mathematics can be very deceptive and difficult for a small business owner to follow. Note that the savings that vendors realize from no-fee merchant services programs may be offset if average sales per transaction increase in the future.

How do these programs affect customers?

Customers are the ones who ultimately bear the brunt of the costs associated with no-fee merchant services programs. They would pay higher prices for goods and services when using payments other than cash. Realizing that there is a markup for using other payment methods could make them upset.

The business needs to try really hard to make a big deal out of cash discounts in the 0% processing fee programs. And make sure your customer facing prices are the highest of what would be charged. I have seen this work out ok for a client because the customers were happy to have a chance at the discount thus increasing cash sales slightly.

Overall, our society appears to be moving more and more cashless overall . And in the next section you can glimpse into some charts detailing how cash vs credit, transaction amounts, and fees could affect your gross profit per sale.

What can business owners do to understand the pros and cons?

Merchant Services decisions are huge to your business. Let's take a look at some samples of how the choice made using one methodology over another would affect your bottom line.

Two scenarios are presented, both using Square processing fees versus a business using the 0% interchange fee option through ProMerchant . Both scenarios use an average ticket per customer of $10. The ratio of credit card to cash is 60-40 (this is about what it was in my retail shop all the way up to 2022).

In Scenario A we assume that the business would advertise prices to all customers at the preferred price if they were to use Square. If they were using ProMerchant, they would advertise all price at the rate 4% above that, and if the customer pays with cash, they would discount the price to the preferred price.

In Scenario B we assume that the business would advertiser a higher rate of 4% more to all customer regardless of the merchant processing provider and still offer the cash discount under the ProMerchant program. The reason for this is explained in the conclusion.

Next we summarize a day in which there are 30 total transactions under both scenarios and service programs. Notice that there is a benefit in gross profit with Pro Merchant in Scenario A and a benefit in gross profit with Square in Scenario B.

Conclusion

If it were my choice, I would try and achieve business practices that mirrored Scenario B. As I mentioned, setting it up this way would still create a need to have a cash discount in the ProMerchant scenario in order to have it make sense. Using merchant services with a flat rate-- in this case Square, I would charge prices accordingly and all customers would pay the same price regardless of payment type. I mean, you could technically not offer cash discounts with a 0% merchant fee system, but then you are back to a simple rate comparison. Equating that to our sample, any ticket over $30 would fair best for Square. Anything below that would be best for ProMerchant.

If a business owner is concerned that raised prices may scare away potential customers, and offering a discount is the way to go to encourage more cash flow, then scenario A and using ProMerchant as the program provider would be the better choice.

Remember, more and more people are going cashless. If you are taking credit cards, you are supposed to advertise the highest rate in your shop, and if that is what customers are going to see, that's how they are going to perceive your prices versus your competitors. Think about it like the gas stations you see every day-- the prices we talk about are always the "credit card" prices. That is why, to me, I would be less concerned about cash discounts, and more so about the right pricing strategy.

No matter what you decide, I hope this post has given you a lot to think about when it comes to deciding on merchant services. If you already signed up, I hope it gives you an opportunity to take a closer look at your program and review the fees you have to pay.

Social Media Marketing- Funny or Die?

rickstartmarketing@gmail.com (Rickstart Marketing) — Fri, 14 Jul 2023 23:23:51 GMT

What approach is best for social media these days? What's going to gain more audience, funny or serious?

Social Media Connects in Many Ways

Humor in your Posts

What about the serious side of things?

Some Additional Considerations

So, Which Is Better In Today's Environment?

Social Media Connects In Many Ways

In today's digital age, social media is an essential tool for businesses of all sizes. It connects us with customers, promotes products and services, and builds brand awareness. But how should businesses approach social media branding? What works better, funny posts or those of a more serious nature?

Unfortunately, there is no one-size-fits-all answer to this question. The best approach will vary depending on the business, its target audience, and its goals. However, there are some general things to keep in mind when deciding whether to use humor or seriousness in social media branding.

Humor In your Posts

Humor can be a great way to connect with customers and make your brand more memorable. It can also help to break the ice and make your brand seem more approachable. However, it's important to use humor carefully. If it's not done well, it can backfire and alienate your audience. We've seen lighthearted humor with the best intent cause huge upheavals in brand loyalty in the Bud Light, Dylan Mulvaney case.

Here are a few things to keep in mind when using humor in your social media posts:

Make sure the humor is relevant to your target audience. What one person finds funny, another person might find offensive.

Be mindful of your brand voice. If your brand is typically serious, then using humor might not be the best approach.

Don't overdo it. Too much humor can start to feel forced and inauthentic.

Here are a couple of examples of businesses that use humor and seriousness in their social media branding:

Wendy's: Wendy's is known for its snarky and witty social media posts. With a knack for poking fun at its competitors and making light of its own mistakes, Wendy's has connected with a younger audience and build a reputation for being a fun brand.

Netflix: Using a mix of humor and seriousness in its social media branding, the brand's posts are often funny and self-deprecating, but they also take a serious tone when promoting new shows or movies. This approach helps Netflix to connect with a wide range of audiences and keep them engaged.

What About The Serious Side Of Things?

Seriousness can also be an effective way to build brand trust and credibility. It shows your brand is professional and you take your products or services seriously. It can also get dry and boring. You need to find a way to make your content engaging and interesting, even if it's not humorous.

Ultimately, the best way to decide whether to use humor or seriousness in social media branding is to test different approaches and see what works best for your business. There is no right or wrong answer, and the best approach may vary depending on your target audience and your goals.

Here is an example of a company that has done a great job of mixing in both serious and funny posts.

The Home Depot: Here, using a more serious tone in its social media branding, the brand's post focuses facts and figures and how proud it is of the associates and partners. This approach helps The Home Depot to build trust and credibility with its audience. If you were to follow other posts, you would see some good fun and humor involved as well.

Some Additional Considerations

Here are some additional tips for using humor and a serious tone effectively on social media:

Be authentic. The most important thing is to be yourself and let your personality shine through in your social media posts. If you try to be someone you're not, people will see right through it.

Be consistent. Once you find a tone that works for you, stick with it. This will help you build a recognizable brand voice and make it easier for people to connect with you.

Be creative. Don't be afraid to get creative with your humor or your serious posts. The more unique and unexpected your content is, the more likely it is to get noticed.

So, Which Is Better In Today's Environment?

We started this so I guess we have to pick sides. No matter which approach you choose, the most important thing is to be consistent with your brand voice and tone. If you're not sure where to start, test out different approaches and see what resonates with your audience. With a little trial and error, you'll be able to find the right balance of humor and seriousness for your social media branding.

And with that very impartial paragraph, we'll have to say that funny is the approach that, anecdotally, seems to be garnering the most attention these days. And there you have it, our winner-- funny!

New Paragraph

Where'd All This AI Come From?

Wed, 14 Jun 2023 23:23:54 GMT

There sure seems to be a lot of hype around AI. Where'd it all come from? How is Rickstart Markeitng using it?

Why So Much AI All Of A Sudden

What Is Rickstart Marketing+ Doing With AI?

Microsoft Bing

Bard AI: The Future of Language Models

ChatGPT: Revolutionizing Conversational AI

What Do I Like?

Where Does It Go From Here?

Why So Much AI All Of A Sudden

It sure seems like it was all of a sudden that our lives were intertwined with talk of AI around each and every turn. Looking back, it's been something circling around sci-fi novels and movies for quite a while now. Think back to HAL in 2001 A Space Odessey, and Skynet in The Terminator. Some pundits have even said novels as far back as 1818, Mary Shelley's Frankenstein, was a cautionary tale of AI.

Really, there are several factors that have contributed to the boom in AI this year. One of the key drivers is the continued momentum in AI investments, particularly among businesses most directly impacted by economic and supply chain disruptions, as well as mature industries generally able to scale AI adoption the most, such as financial services, retail, healthcare, and manufacturing. Another factor is the ongoing democratization of AI, which is making it easier than ever for businesses and organizations to access and benefit from AI technology. Additionally, there have been significant breakthroughs in AI technology, such as the rise of generative AI, which has attracted attention and investment.

I tend to think that this outpouring of AI is a revolution that will be marked in history. If trends continue, we will see more and more drastic improvements in the way AI interweaves into our everyday lives. It's really exciting for me to see this, especially as it coincides with the launching of my marketing agency this year.

What Is Rickstart Marketing+ Doing With AI?

When it comes to AI, I love having the tools at my disposal! I'm using it every day. And I use it for content, art, coding, and general knowledge. Most especially content. It's been embedded into the web building software I use, and I am often switching between Bing and Google's version of AI to look at different angles for content. Of course, I use ChatGPT from time to time as well.

Speaking of those different services, I have noticed that each one produces quite a different degree of specialty to the content they create. Here, let me have them tell you themselves (Here is their unedited information from their content generators, and if they give me links I've included it here):

Microsoft Bing

Microsoft AI is a suite of powerful tools and services that bring artificial intelligence to every developer. With Azure AI, developers can innovate and accelerate their development process using advanced vision, speech, language, and decision-making AI models. They can even create their own machine learning models using familiar tools like Jupyter Notebook and open-source frameworks like TensorFlow and PyTorch .

Microsoft AI also offers applied AI services that enable developers to accelerate their AI development with built-in business logic. These services allow developers to launch solutions in days rather than months, while also ensuring that their solutions are run responsibly with security that extends from the cloud to the intelligent edge . Additionally, Microsoft AI offers cognitive services that achieve human parity in computer vision, speech, and language. Developers can leverage a comprehensive family of customizable cognitive APIs, including OpenAI models .

Microsoft’s responsible AI principles ensure that the develo pment of AI is done in an ethical and transparent manner. With Microsoft AI, developers can build intelligent applications that are not only innovative but also responsible. From reducing mundane tasks with Microsoft Sales Copilot to uncovering and responding to threats faster with Microsoft Security Copilot, Microsoft AI is transforming the way we work and live .

Bard AI: The Future of Language Models

Bard AI is a large language model (LLM) chatbot developed by Google AI. It is still under development, but it has learned to perform many kinds of tasks, including

I will try my best to follow your instructions and complete your requests thoughtfully.

I will use my knowledge to answer your questions in a comprehensive and informative way, even if they are open ended, challenging, or strange.

I will generate different creative text formats of text content, like poems, code, scripts, musical pieces, email, letters, etc. I will try my best to fulfill all your requirements.

Bard AI is powered by Google's LaMDA (Language Model for Dialogue Applications) technology, which is trained on a massive dataset of text and code. This allows Bard AI to generate text that is both coherent and informative.

Bard AI is still under development, but it has the potential to revolutionize the way we interact with computers. It could be used to create more natural and engaging user interfaces, to power new kinds of chatbots and virtual assistants, and to develop new ways to generate creative content.

Here are some of the potential benefits of Bard AI:

Improved user experience: Bard AI could be used to create more natural and engaging user interfaces. For example, it could be used to create chatbots that can hold conversations with users in a more human-like way.

New ways to generate creative content: Bard AI could be used to develop new ways to generate creative content, such as poems, code, scripts, and musical pieces. This could be used to create new forms of art and entertainment.

More efficient customer service: Bard AI could be used to power new kinds of virtual assistants that can provide customer service more efficiently. This could free up human customer service representatives to focus on more complex tasks.

Bard AI is still under development, but it has the potential to be a powerful tool that can be used to improve our lives in many ways.

And here is ChatGPT

ChatGPT: Revolutionizing Conversational AI

ChatGPT, developed by OpenAI, stands as a testament to the remarkable progress in the field of artificial intelligence. Powered by the GPT-3.5 architecture, ChatGPT has rapidly gained attention for its ability to engage in natural and coherent conversations with users across various topics. This cutting-edge technology utilizes a massive dataset encompassing diverse text sources to generate responses that mimic human language patterns, making it a versatile tool for customer support, content creation, and even companionship.

At the heart of ChatGPT lies its sophisticated neural network structure. Comprising 175 billion parameters, these AI-driven systems are trained to understand context, syntax, and semantics, enabling them to produce contextually relevant and contextually accurate responses. This impressive understanding of language allows ChatGPT to seamlessly transition between subjects, provide explanations, and offer creative solutions, demonstrating a level of fluency that challenges the boundaries of human-computer interaction.

However, ChatGPT's capabilities also come with ethical considerations. As it can sometimes produce incorrect or biased information, ensuring its responses are reliable and unbiased remains a challenge. OpenAI is actively working to address these concerns by refining its training processes and providing users with the ability to customize and fine-tune the model's behavior to align with their values. As ChatGPT continues to evolve, it not only represents a technological milestone but also prompts important discussions about the responsible deployment of AI in our increasingly digital world.

What Do I Like?

Very interesting expose, right? They all have their nuances. I like the Microsoft Bing one the most. It seems more in-depth and has a lot of helpful prompts. Bard is actually the one I have used the most, though. I have found Bard to be annoying when Google searching, and the Bard prompt loads a lot slower than the search. On the other hand, I do appreciate the information it produces. With the Bing AI, it's off to the side and only is visible if I open it up. I've used ChatGPT to help with content and also give me some coding solutions (I'm not a coder so it has helped educate me quickly on some issues I needed to learn about).

Where Does It Go From Here?

AI video and audio creation are really interesting fields. We can expect to see dramatic developments in these areas in the next year. However, this comes with a caveat: it becomes harder to trust what we see and hear on a screen. A degree of skepticism has already lingered around film and television for some time now due to the advancements in CGI. But now, with the ability to put this technology in the hands of anyone with a computer, there will be those who want to use it for their own gain. While I am excited for the future, I also ponder how I will handle a phone call from my son or daughter asking me to send them money to get them out of trouble.

The Marketing Mirth Blog: Laughter and Insights

Troubling Trend In Small Business Merchant Services

Many business owners are finding ways they can accept credit cards with no fees from new vendors. But what are the hidden implications of this transaction?

Table of Contents

Introduction

How do no-fee merchant services work?

Hidden costs in merchant services

Can no fee programs benefit businesses?

How do these programs affect customers?

What can business owners do to understand the pros and cons?

Conclusion

Social Media Marketing- Funny or Die?

What approach is best for social media these days? What's going to gain more audience, funny or serious?

Table of Contents

Social Media Connects In Many Ways

Humor In your Posts

What About The Serious Side Of Things?

Some Additional Considerations

So, Which Is Better In Today's Environment?

Where'd All This AI Come From?

There sure seems to be a lot of hype around AI. Where'd it all come from? How is Rickstart Markeitng using it?

Table of Contents

Why So Much AI All Of A Sudden

What Is Rickstart Marketing+ Doing With AI?

Microsoft Bing

Bard AI: The Future of Language Models

ChatGPT: Revolutionizing Conversational AI

What Do I Like?

Where Does It Go From Here?