Credit Card as A Primary Tool

Credit Card as A Primary Tool

As a marketer, I see the credit card as one of the primary tools a serious business should have, whether you are in an off-line or on-line business.

Recently, I advised a client that setting up his e-commerce website with just PayPal facilities is inadequate. Most people will have either Amex, Visa or MasterCards credit cards. However, not everyone will have a PayPal account. We must offer convenience to our customers as the decision to buy can be a spur of the moment one. We must capture and maximize that moment. It takes only one click to log off from a website and a few steps to walk out a shop. Conversely, it takes lots of paid advertisements and publicity to bring in one paying customer. Losing the business transaction simply because we don’t have a convenient payment mechanism in place is a dent to the investment we made to bring the customer in. That’s a double loss to you.

I was at Sim Lim Square over the weekends to buy some ink cartridges. Several shops did not offer credit card facilities. A few, that did, asked me to pay an additional 3% to cover the transaction fees. This practice is prohibited by all banks yet many retailers choose to take the risk. By not offering credit card facilities or charging customers a fee to use credit cards, these shops are giving genuine customers an additional reason not to buy. But it’s them, the retailers, that are ultimately at the losing end. The customers can always buy from another shop. Instead of closing a deal with an opportunity to cross-sell or up-sell something else to make more profits, these retailers are turning customers away! Likely forever. I will not visit the same shop again.

I might not have enough cash but my wallet has several credit cards. Like most working executives, I’m constantly wooed by telemarketers to get a new credit card and I have no qualms about getting a new one. I will certainly take advantage of the fee waivers, cash back/credit card rewards or instant gratifications (like a free gift of a spa voucher or a bottle of wine). Whatever it is, I compare credit cards to get the best deals. My latest additions are two cash back credit cards from Citibank and DBS Banks.

All clients and customers like to get the best deals. The product could very well be the best deal but they might just walk away if the the paying method is not the “best deal”. If I buy the product with a credit card, I can enjoy the product for free for 30 days because of the credit terms offered. On top of that, I might enjoy a 2% – 5% cash back or earn bonus dollars to exchange for goods and services. I get more by using credit cards and so I keep charging.

Serious and wise business owners are usually not “penny wise pound foolish”, they will bite the bullet to invest in credit card facilities. They think long term.

[tags]credit cards[/tags]

2 Replies to “Credit Card as A Primary Tool”

  1. Credit cards are alright if used wisely.
    I do my best to limit these to one-off payments, so that I can keep expenses in check. If there is a need to make monthly payments, I aim to make these as small (and as few) as possible.

    I’m not sure if charging a fee for CC facilities is illegal, but in any case I pay via cash or Nets.

  2. Agreed that credit cards should be servants and not masters. Time payment can be so attractive that one is tempted to buy more than is necessary.

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