Business.com |
- How Vendor Management Boosts Your Bottom Line
- 5 Reasons Your Social Media Marketing Campaign is Failing (and How to Fix it!)
- What Are Chargebacks, and How Can You Avoid Them?
| How Vendor Management Boosts Your Bottom Line Posted: 13 Feb 2020 11:00 AM PST  Every company knows that creating and maintaining good customer relationships boosts the bottom line by way of increased sales and repeat business. Similarly, businesses understand that good employee relationships also boost the bottom line by increasing productivity and minimizing turnover. A concept that may be lost in the mix, however, is creating and maintaining ongoing, positive vendor relationships, which is the broadest definition of vendor management. At first glance, a strong vendor management solution may not appear as directly related to a company's bottom line as customer and employee satisfaction obviously are. Vendor management and talent management might not sound like the same thing, but a company's vendors, like its employees, are an extension of the company itself. They can be equally important in terms of a business's ability to reduce costs, increase quality, and provide a high level of service. Consider the following case study for a landscaping business: Vendor management case studyTo cut costs, a landscaping company is looking into prospective vendors. They find a tree farm with an impressive inventory and significantly lower prices than what they're accustomed to paying. Excited about the potential savings, the landscaper quickly brings the tree farm on as its vendor of choice and signs a contract with them. Soon, the landscaping company begins several projects in a new, fast-growing subdivision. They complete several jobs, gaining more exposure, and subsequently winning more opportunities. Unfortunately, many of the trees they acquired from their tree vendor die within weeks of being planted. The landscaper guarantees his work but discovers that the small print in the vendor's contract includes fees and exclusions that make replacing the trees almost as expensive as planting them in the first place. Due to the expense of replacing the trees and having to mobilize his team to re-plant them, the landscaper finds the profit for each job significantly diminished. What's more, he has little hope that the replacement trees will fare any better than the initial plantings, as they came from the same vendor whose quality he's starting to suspect. A thorough vetting of all vendor prospects, as well as a clearer vendor management policy, could have spared the landscaper this unfortunate situation. Improve efficiencyA clear talent management strategy regarding vendors usually includes a centralized information system, which improves a company's efficiency by providing a clear understanding of your vendors and prospective vendors, their methods, and how they compare to their competition. Having all this information at your fingertips in one easily accessed location eliminates your need to reinvent the wheel every time a project requires outsourcing. This approach to vendor management streamlines the process of overseeing multiple relationships and ensures that you know who to turn to for necessary work or supplies. Your system might include tracking such elements as contact information, vendor reviews, your history with the vendor, financial information, contracts, insurance, and so on. Whether it's in-house or outsourced, the right vendor management system should include any and all information you deem pertinent to increase your efficiency in finding, hiring, and paying existing and prospective vendors. Improve qualityProblems like the landscaper experienced in the above case study can derail any business, which will have a negative trickle-down effect on employees and clients alike. Therefore, it's sound practice to approach vendor management as you would any talent management and find a system that enables you to evaluate and monitor your vendors closely. James Bucki, the director of computing technology at Genesee Community College and former business writer for The Balance Small Business, offers the following advice, "Once the relationship with the vendor has begun, don't assume that everything will go according to plan and that everything will be executed exactly as specified in the contract." Your company's quality and reputation are linked to the goods or services your vendors provide – not just those that you provide, so vigilance over mission-critical details is vital. The right vendors contribute significantly to the quality and perceived quality of your product. Here are just a handful of questions you should ask yourself regarding the quality of your vendors and vendor prospects:
Reduce riskOne of the reasons that vendor management is akin to other forms of talent management is that the cost of choosing the wrong vendors can be like the cost of choosing the wrong employees. Vendors, in their own way, are another form of employee, in that you usually have a contract with them, they provide you with services, and you pay them for those services. High turnover, poor performance, and unclear or unmet expectations can cause the same sorts of problems with your vendors as they can with your employees, and therefore have a detrimental effect on your bottom line. What are some of the forms of risk that a company might encounter if they choose the wrong vendors? Strategic riskStrategic risk can stem from contracting with vendors who don't provide the services that you need to maintain proper operations. Making a poor choice among your vendor prospects can result in diminished earnings and capital. Furthermore, not selecting the right service provider could produce unanticipated costs. Reputational riskReputational risk can result from the above-mentioned poor service from third-party providers. Their shortcomings can prevent you from delivering customer interactions in keeping with your standards. Compliance riskCompliance risk is elevated when your legal or consumer compliance controls are lacking, rendering you unable to gauge your vendor's compliance in key areas. This risk is also affected if your outsourced service or goods provider has insufficient control systems in place themselves. Operational riskOperational risk may result from a vendor's technology failure, inadequate capacity to fulfill their contract, or error. In worst-case scenarios, if a vendor engages in illegal or fraudulent practices, they can stall your operations and require you to spend precious resources rectifying the situation. Having a strong vendor management solution in place can appreciably reduce the above risks by helping you spot trends that can become problems and ensuring that you have all the information you need to select good vendors and negotiate workable contracts. Your ability to monitor an outside provider's performance history, whether that history is with you or you're looking into them as a prospective vendor, can help you make more educated contract decisions. Cut costsOne of the benefits of establishing an efficient vendor management system is that it enables you to see where your enterprise might have redundancies in terms of outside providers. For instance, perhaps you have more than one vendor providing similar services to different departments in a classic case of the right hand not knowing what the left hand is doing. Or, perhaps you currently have two vendors providing two different services, and one of those vendors can provide both. Consolidation can be a key element of cost reduction. Leverage technology to save moneyWhether you choose to outsource a vendor management company or invest in reputable vendor management software, leveraging available technology will enable you to cut costs by increasing the efficiency of your current procedures and effectively doing the work of several people, or even teams of people. ReportLinker claims that the "North America vendor management software market is expected to grow from US$ 1.58 Bn in 2018 to US$ 3.55 Bn by the year 2027. This represents a CAGR of 9.6% from the year 2018 to 2027." The increasing trend of adopting tech-based solutions to streamline the business process is boosting the implementation of vendor management software. Organizations are focusing more on automating their business processes for efficiency at reduced costs. A good vendor management system can help you with several processes, including:
VeriKlick, for instance, is a talent management solution that can help you find the best talent to fill positions quickly. The system helps you contact, verify, and hire the right people with customizable tools in a cloud-based HR solution, empowering you with the resources you need to take charge of the hiring process. Eliminate unnecessary costs, streamline the vetting processes, and adopt new strategies for a better hiring ROI. Technology is readily available, and it isn't hard to find. If you take the time to research the right solution for your organization, you'll find that this investment pays rich dividends by saving you ample time and money as you move forward. It will also empower you to make decisions with more ease and higher confidence. Start boosting your bottom line with effective vendor managementVendors are a necessary and marvelous part of your business, and in many cases, your business couldn't function without them. Managed correctly, your vendor relationships and interactions should be a clear asset to your business operations and your financial outlook. This isn't an area where you can afford to take the first offer that comes along and hope for the best. Properly vetting and managing your vendor talent will make a world of difference in your efficiency, quality, risk, and costs. In short, your vendor management solution will have a measurable effect on your bottom line. |
| 5 Reasons Your Social Media Marketing Campaign is Failing (and How to Fix it!) Posted: 13 Feb 2020 06:00 AM PST 
Do you want to find out why your social media marketing campaign is failing? If so, you're not alone. Now that over three billion people use social media, businesses are continually looking towards platforms like Facebook, YouTube, Twitter and Instagram to promote their products or services. Consumers get the chance to see all of the latest and greatest brands at their fingertips. When you consider that 37% of people say that they use social media as a research tool before making a purchase, it's no surprise that marketers and business owners are trying harder than ever to reach their audience. A correctly implemented social strategy can help you increase your sales, build your reputation as a high-quality company and improve brand awareness. Today we are going to take a look at five of the most common social media marketing mistakes and show you how to fix them. 1. You're not targeting the right audienceThe first mistake marketers make is that they try to reach out to a broad audience, instead of focusing on people interested in their products or services. It's common to see the data used to research your target audience skewed due to a lack of data or inconsistent tracking. As a result, you'll reach people you think are interested in your brand instead of people who have a genuine need for what you're offering. Fictional customer profiles can help you learn more about your target audience, but if you want this strategy to work, you have to spend time conducting in-depth customer research. Review your website analytics for common trends on your blog and checkout page. Next, review customer feedback sent to you through your on-site contact form, or in relevant groups on social media. Once you understand what consumers expect from your brand, you can restructure your social media strategy to put their needs first, which will contribute to the success of your campaign. 2. You purchased likes, shares or website trafficYou may be surprised to find out that many people still buy likes and shares on their website and social media profiles. If this doesn't surprise you because you're trying to use this tactic to grow your brand, it's time to switch strategies. It's clear to real customers when a page is full of fake reviews and bot interactions. There's nothing that will pull customers away from a brand if they think they are using unsavory business practices. Real companies should always focus on growing their website and social media pages organically. It's important to note that ads through the social platform you're using are not inherently wrong, but if you're paying for people to send bots to your profile, it could cost you the trust of your audience. 3. Engagement is not a priorityConsumer engagement comes in many shapes and sizes. Online contests, polls and status updates in the form of questions are all techniques used to encourage engagement. If you're not giving people a reason to interact with your brand, your social media analytics will quickly plummet. It's hard to recover from this image, regardless of their industry. People have so many options when they want to browse companies on social media, so engagement is a must. Imagine going to a business profile with one update from two months ago. Meanwhile, another business hosts two contests a month where they give ten lucky winners a $25 Amazon gift card. Who do you think has more engagement in their comments section and on their website? The marketer hosting events, talking to customers and encouraging discussions will likely see more traffic and sales compared to their stale counterparts. 4. You're not sharing valuable contentAbout 80% of internet users have at least one social media account. If your content provides value or entertains, it's a safe bet that people will share your article or video on social media. The problem many business owners have when creating their campaign is they don't show these pieces of content to new subscribers. Your social media marketing strategy will likely fail if you're not consistently sharing valuable posts and content. There are endless types of content you can share with your subscribers. Start by scheduling your blog posts to go out throughout the day with the necessary hashtags and mentions. Adding tags at the end of your posts will help your content reach the people that will benefit the most from your article. As a result, people that benefit from your product or brand will share your content and act as brand ambassadors. Creating and sharing valuable content is an essential part of growing your social media channels. You can also diversify your posts by repurposing your blog content into easily digestible videos. Videos get more shares and engagement, which could jump-start your stagnant social media profile. 5. You're not working with other brandsPartnerships are crucial to the success of your social media strategy and business as a whole. Marketers and business leaders rely on other experts in their industry as well as social media influencers to help spread brand awareness. Your relationship with other business leaders will depend on where they operate in the industry relative to your business. In an ideal situation, you should look for a business partner that sells products that complement what you offer. For instance, a marketer that works for an email marketing software company might work with a website hosting provider employee. If someone is in the market for email marketing software, chances are, they will need website hosting too. It's not uncommon to see these types of partnerships formed, especially with SaaS companies. This tactic can benefit your social media strategy because it gives you a chance to write and share guest posts, connect with your target audience, and grow brand awareness. Social media influencers are internet personalities that promote products or services to their followers. These people usually have unique personalities or segments that draw in specific consumers, making them excellent social media marketing tools. A simple YouTube or Twitter search of your keywords will show you the most popular posts and videos on the topic. Look through the channels and find people that you think would make a good sponsor for your brand. Send out an email where you ask the influencer to promote your product in exchange for cash or your product for free. Once the influencer reviews your content, they will share their post on social media. The new eyes on your content will draw attention to your social media profile, which will help boost the success of your campaign. Social media marketing is a marathon, not a sprintAfter creating your website and social media profiles, it's easy to feel discouraged when traffic doesn't skyrocket. The truth is, social media marketing is sometimes a slow process where you have to consistently deliver great content, work with reputable brands, and engage with your audience. If you want to grow your business and channels more, experiment with your existing strategy after you build a more substantial following. |
| What Are Chargebacks, and How Can You Avoid Them? Posted: 13 Feb 2020 05:02 AM PST 
Navigating the financial world of business is tricky – companies strive to provide consumers with what they want while still maintaining a profit. Large e-commerce retailers like Amazon and Walmart have paved the way for shopping perks like free shipping and returns that consumers now expect from retailers. Shopify recently found that 80% of consumers surveyed expect free returns, and 71% said if they were charged a restocking fee, they would not purchase from that retailer again. As consumer expectations grow and instant gratification becomes commonplace, businesses (especially those operating in the world of e-commerce) must adapt. If you're falling short of your customers' expectations, one or more may initiate a chargeback, which can hurt your business, resulting in higher rates or, worse, your account being dropped by your processor. What is a chargeback?A chargeback occurs when a cardholder requests their bank to reverse a credit card charge that has been posted to their account. This differs from a refund; a refund is money returned directly from the merchant, whereas a chargeback is handled by the card issuer. There are several reasons why a customer might request a chargeback. Here are some of the most common:
Although some of the above scenarios, such as products that are lost or damaged during shipping, occur, other issues, such as billing errors, can (and should) be prevented by adopting good business practices and doing due diligence. Monica Eaton-Cardone, co-founder and chief operating officer of Chargebacks911, said that credit card chargebacks represent a real and growing financial threat to merchants, and a frequent number of chargeback claims can ruin a business's reputation with banks. "Banks gauge a merchant's risk and reliability on the number of chargebacks they receive," Eaton-Cardone told business.com. "Multiple chargebacks on a regular basis can lead to even greater merchant challenges down the road. Merchants are essentially 'guilty until proven innocent.' Chargeback fees and reimbursements are deducted from the merchant's account automatically – no questions asked." Nydelis Ortiz-Rivera, payments product manager at TableSafe, said that if a business wants to counter a cardholder's chargeback claim, it has a short time frame to gather information and submit a defense claim to the credit card issuer. "The issuer will then review all documentation and determine who is liable for the transaction," said Ortiz-Rivera. "If the merchant wins the dispute, then the liability either falls on the cardholder, the issuer or the acquirer to pay for the transaction in question, depending on the nature of the dispute and the supporting documentation. If the merchant loses the dispute, they are liable for returning the funds to the cardholder." What are the costs and consequences of chargebacks?Having a chargeback claim filed against your business is never good. The consequences can be detrimental to your business if it's not rectified. The two primary consequences are cost and damage to your business's reputation. Lost revenueThe most obvious consequence of a chargeback is the lost revenue. Even if a merchant wins a chargeback dispute, a nonrefundable fee, ranging from $20 to $100 per chargeback, is deducted from the merchant account for every chargeback filed. Additionally, the merchant is often liable for covering shipping costs and returning payment to the cardholder. Negative impact on merchant reputationChargeback claims negatively impact how banks and card issuers view your business. Even if you win a dispute, a chargeback reflects poorly on your company. If multiple claims are filed against you, you are enrolled in a monitoring program, which gets even more costly. "Chargeback monitoring requires the payment of another ongoing fee," said Eaton-Cardone. "Certain merchants might receive a grace period before becoming fee-eligible, but high-risk merchants are usually hit with fees as soon as they enter the program. Businesses in a chargeback monitoring program are also subject to periodic reviews of their mitigation plan – yet another fee." Merchants who fail to reduce their chargeback rates may be charged higher processing fees or have their account frozen, and merchants who engage in frequent forced payment reversals may be added to the Terminated Merchant File, resulting in your business being blacklisted for five years. Is a chargeback reversible?Although reversing a chargeback is technically possible, it is difficult to do, and the odds aren't in your favor. Card issuers typically side in favor of cardholders as opposed to merchants, and the guidelines they create around chargebacks reflect that. "When a chargeback is issued, merchants must respond to the case with all of the supporting documentation they have to back their claim that a payment was processed without error and that the goods or services rendered were satisfactory," said Ortiz-Rivera. "If they do not respond, they are liable. If they do not provide enough documentation to back their claim, they are liable. If the issuer has additional information from the cardholder that supports their claim, they are liable." Merchants and cardholders have different chargeback rights, with merchant rights being convoluted. Each card network has an extensive list of chargeback reason codes, but there are numerous situations where a cardholder has a legitimate dispute situation that lacks a corresponding chargeback reason code. "When it comes to merchants' chargeback rights being violated, the single greatest threat comes from friendly fraud, also called chargeback fraud," said Eaton-Cardone. "Experts estimate that over 85% of all chargebacks may be caused by friendly fraud – meaning they file a chargeback without valid justification." There are multiple reasons why customers might do this, including buyer's remorse, dissatisfaction with products or services provided, or simple confusion about the proper refund process. "The only instance where a chargeback will be reversed is if the business submits a valid dispute backing their claim that the transaction was processed without error and the goods or services rendered were satisfactory," said Ortiz-Rivera. "Ultimately, it is up to the issuer to determine whether a chargeback will be reversed or not." How do you protect your business against chargebacks?It is important to take protective measures to keep your business from falling victim to chargeback claims. Eaton-Cardone recommends seeking out a chargeback management service with an end-to-end, multitier approach that helps fight chargebacks, while also reducing the risk of chargebacks in the future. "The best is a turnkey chargeback management system covering the entire chargeback process," she added. Ortiz-Rivera advised brick-and-mortar businesses to adopt EMV-capable terminals (chip readers) to reduce their risk of liability for fraudulent transactions. Although the U.S. was one of the last countries to adopt EMV technology, as of October 2015, a liability shift occurred. Businesses that process card-present transactions and are not EMV compliant are liable for fraudulent transactions. How to reduce and avoid chargebacksAside from fraud, the second most common reason for chargebacks is dissatisfied customers. Take pre-emptive measures to ensure you are providing the best purchasing experience and customer service for your consumers. Create standard procedures for accepting credit cards, and train employees on those procedures, to ensure that everyone is following best practices. Evaluate your team periodically and update your protocols as needed. Eaton-Cardone recommended using the address verification system, and consistently collecting CVC2/CVV2 verification codes should be standard procedure on every order taken – and that's just the start of it. To standardize your business procedures and prevent chargebacks, Eaton-Cardone recommended adopting the following best practices:
Guidelines surrounding chargebacks are updated regularly, so merchants need to monitor regulations and adjust their internal procedures to reflect the most recent rules (e.g. EMV-compliant payment transactions). If your business's chargeback rates increase, review your chargeback history and identify any trends. "Are you receiving a lot of chargebacks due to fraud? This may be an opportunity to invest in an EMV-capable terminal," said Ortiz-Rivera. "Are your chargebacks related to the quality of goods or services? This may be an opportunity to examine potential areas of improvement within the business." At some point, you'll have a cardholder who needs to rightly dispute a fraudulent charge. If you are alerted before a chargeback is filed, it is best to remedy the situation as soon as possible. This may cost you shipping fees on top of lost product revenue, but it is usually better than incurring a chargeback request (that you will likely lose anyway) and a nonrefundable fee. Although dealing with chargeback claims can be time-consuming, Ortiz-Rivera cautioned that businesses ‒ small businesses in particular ‒ that don't take the time to manage disputes can experience unnecessary, painful losses to their bottom line. "My advice is to be proactive and take measures to help reduce the number of chargebacks you are initially exposing yourself to, and if you're strapped for time, maybe prioritize managing chargebacks that are above a certain dollar amount," said Ortiz-Rivera. As a small business owner, chargebacks should be on your radar as something to monitor and rectify as soon as possible. |
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