For merchants, the customer payment experience is paramount to boosting conversions and avoiding involuntary churn. By taking a more proactive approach, merchants can leverage network payment tokens and account updaters—eliminating customer friction in the process.
During a recent PaymentsJournal podcast, Jason Harding, Product Director of Optimization at Worldpay from FIS, and Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research, delved into how organizations can improve their payment strategy to cut costs and refine the customer experience.
Seeking Growth Opportunities
Many merchants that Worldpay from FIS works with are looking for ways to save on operational costs and are also eyeing key areas to foster growth.
But it really comes down to what their payment strategy is. Because marketing spending may be subject to budget cuts, having a profitable payment strategy can ensure a higher percentage of conversions for first-time shoppers. Although it’s important to focus marketing spending on effective acquisition strategies to attract as many customers as possible, it doesn’t end there. Figuring out how to retain customers is just as crucial.
“Increasing the lifetime value of the customer that you have can be done within an effective approach to payments to ensure that those who are coming through the funnel have the best possible chance to convert,” Harding said.
Often, merchants may not be as comfortable taking a new approach or experimenting beyond what they have traditionally done. But Keyes notes, it’s important to find creative ways to boost conversions amid powerful economic forces.
“It’s about getting creative and trying new things with payments in order to increase your conversions when you really need it,” Keyes said. “There’s an opportunity to improve your operations so you can break even or even improve during these periods of time rather than just trying to wait it out.”
Leveraging Analytics to Drive Business Outcomes
When it comes to having a robust payments strategy, merchants also need access to the right data. Many solutions can be leveraged to ensure they have the latest customer information to process timely payments and enhance the customer experience. “Part of it is understanding what’s actionable insight versus what is the noise,” Harding said. “What is the data that we have access to? What data can we use to benefit an organization?”
To ensure that customer credentials are up to date, Harding recommends using network payment tokens, which are unique digital identifiers that provide a tokenized value in place of a primary account number that is used throughout the payment chain. Payment tokens reduce checkout friction without compromising security. There’s also an account updater—another important tool—which automatically updates subscription customer card credentials.
Catching that sale, even when customer credentials change, means staying ahead of the curve through actionable steps. “It’s taking the information we have and finding those actionable pieces of what we can do to get to the end result, if the result is higher conversions,” Harding said.
Merchants must also take the initiative to convert transactions by using the data that is made available and not waiting until the next billing cycle.
“Proactive is the keyword, where having this data gives a merchant more opportunities to know if an account is closed,” Keyes said. “To try to convert that transaction when it comes up a few weeks later because you bought extra time to figure that out as opposed to waiting until the billing cycle comes up. Using data to create more opportunities to convert including convert transactions that you thought you had in the bag.”
Harding posed a series of questions: “Is there a time of week that I should retry that transaction? What time of day am I typically seeing success? How do I use that information to effectively make the most of my strategy? That comes from experimentation learning and then applying that and re-experimenting.”
According to Keyes, simply initiating a transaction and expecting it to automatically go through doesn’t consider the real complexities surrounding these transactions. Again, data can be leveraged to determine the best strategy.
“There are so many more ebbs and flows where the time of day can matter,” he said. “The day of the week can matter. But these things, depending on the business, depending on the customer base, can increase or decrease conversion.”
Selecting the Best Routing
As merchants look to effectively implement a routing strategy, the right approach greatly depends on the types of solutions they’re already using.
“There’s many variables at play, such as card issuer, type, brand, the authorization mode—whether we’re using a CV2 verification, whether you’re using 3DS, you know geolocation, there’s tons of different payment credentials,” Harding said.
Ultimately, a merchant must focus on which solution delivers the best customer experience.
“I think a lot of these solutions are incredibly important,” Keyes said. “Account updater is a great example of one that really affects the customer experience. If I get a new credit card and I go to a merchant, I’ve shopped before and suddenly I need to input my credit card information when I haven’t the last 30 times I’ve purchased there, that’s really frustrating and it sours the experience.”
Conclusion
An effective payments strategy ensures that first-time and ongoing customers have a reason to continue doing business with the merchant. Amid increasingly tighter budgets, merchants must have high conversion rates top of mind, and this begins with leveraging relevant customer data.
With this data, merchants will be armed with the information necessary to avoid missed payments as they deliver exceptional customer experience.