One of the more expensive aspects of running a business revolves around handling money. Yes, a budget is important. But, even more important, is how much it costs for an enterprise to move their money around.
After all, just because you know how to generate revenue, doesn’t mean you know how to generate a profit. Expenses add up and can easily get out of control.
I had the opportunity to listen to him speak at a conference, and the information he shared opened my eyes to the many traps that exist for struggling entrepreneurs.
The dangers of ignoring a plastic economy
Did you know that a whopping 55 percent of small businesses do not accept credit cards? That’s a major weakness.
The cost of accepting credit cards can be more than five percent of the transaction cost.
I get it. Businesses don’t want to stomach additional overhead in the form of transactional costs. But, if 55 percent of small businesses are telling their customers to dig deeper into their wallet for cash or an ATM card, that’s going to hurt customer loyalty.
For John, “…the thought of small business giving up customers to the big guys on the basis of payment method is too much to stomach.” So, to fight this trend, John Rampton has decided to launch a crusade to minimize transaction fees for entrepreneurs as they gain a foothold in their market.
Price-matching should benefit small business
We’ve all heard of the showrooming effect, or the reality that companies like Best Buy face in an increasingly digital economy. As consumers become more and more accustomed to scoring a price-match at checkout, shouldn’t small businesses get their own price-match?
Companies like Due are actively looking for ways to help struggling entrepreneurs. For John Rampton, “…the idea of extending a price-match solution to small business has created a massive amount of engagement. We thought it would be cool to match the competition. But, in supporting small business, we found a massive PR opportunity to build engagement and create a teachable moment for the industry.”
It’s pretty amazing to look back on how consumer trends can impact how B2B firms engage with their clients. Price-matching is an excellent way to improve both customer trust and loyalty.
Expensive doesn’t equate to quality
Small businesses are experts at delivering a cost-effective solution. Why? Well, the reality for a small business is that they need to shoe-horn their way into the market.
The most common solution for achieving this involves undercutting the broader market. If they can offer a good or service at a lower price than the competition, they have instantly engaged the consumer (assuming they know about the opportunity to purchase their goods or services at a cheaper rate).
For consumers, the idea of providing a lower-priced solution isn’t necessarily an indicator of quality. Look at the healthcare sector, for example. Blood clots and other healthcare quality indicators were better or equal in low-cost healthcare centers. But, how can this be! Doesn’t price dictate quality?
It turns out that most firms have a common desire to serve their client-base in an efficient and effective manner. For Renzo Costarella, one of the first employees with Due, “…the opportunity to support low-cost providers of services with a reliable service is exciting. Among other reasons, broadening the potential client-base for needed tools and solutions empowers our society to do more with less…”.
The low-cost solution
While it may sound like a numbers problem, there are people within the communities that are served by low-cost providers. By reducing the overall cost for companies to deliver services, there’s an opportunity to serve more people. In the area of healthcare, this is especially true. With the government grants available, stretching a few pennies can mean additional vaccines and treatments reaching needy patients.
In the business world, lowered operating costs mean startups have the opportunity to thrive in challenging markets. In the world of healthcare, more patients are seen and treated. But, above all else, there’s an opportunity here to curb greed by using technology to process payments in a more effective manner.
I am optimistic that we’ll see a world where the lower cost of business operations allows for better service and broader selection for consumers. We’re already there in some industries, but a more cost-effective online payments solution improves efficiency in every sector of our economy.