Ask CWS: How do Online Credit Card Payments Work?

As more and more business is being done online, we've seen an increase in the demand for applications that include real-time processing of credit cards. To make smart decisions when you're setting up a payment solution, it's helpful to have an understanding of how these transactions are handled. Although the whole process happens very quickly (usually just a couple of seconds), there are several different components involved that all have to work together.

Step 1: A customer submits payment information to your website. This connection must be encrypted with SSL, a sophisticated technology that prevents anyone from intercepting the contents of the request while it's being transmitted from the user's local computer to your server. As a website owner, you'll need to purchase (and renew annually) an SSL certificate for these connections.

Step 2: Your Web server takes the payment information and opens a second SSL-encrypted connection in the background to a payment gateway. A gateway is a secure server that acts as a bridge between Web applications and the payment processing network. There are many different gateway providers, though your bank may have a partnership with a particular vendor. Some popular gateways include Authorize.net, LinkPoint and Payflow Pro. Although they all perform the same essential funcion, each has its own set of features (and fees), and many factors may influence your decision. For example, if you're using an off-the-shelf shopping cart, it likely supports a particular set of gateways. Some gateways handle particular types of transactions that others do not.

Step 3: The payment gateway contacts the processing network to determine if funds are available for the transaction. The cardholder's issuing bank relays a response back to the gateway.

Step 4: What happens next depends on the type of transaction. An authorization simply gets approval for the purchase, with the actual charge to happen at a later time. For example, when shipping hard goods, the sale is not complete until the order has been fulfilled. A final sale, on the other hand, immediately charges the customer. Examples would be payment for a service or electronic download, where fulfillment occurs immediately. The payment gateway has details for the merchant account provided by your bank and will route the payment accordingly.

Step 5: The results of the transaction will be passed from the payment gateway back to your Web server. For approved payments, this typically includes a unique ID that can be used to reference the transaction later. If the transaction failed, a status code or other message will be given to help determine the cause (insufficient credit, incorrect expiration date, etc.). The Web server will then display an appropriate success or failure screen to the user.

The entire process happens very quickly under normal circumstances, and the customer never sees what's happening in steps 2-4. However, all this background infrastructure is critical and the pieces must work together. As a website owner, you must have the following to accept payments online:

1. An SSL certificate (see step 1 above)
2. A merchant account that supports Internet transactions. If you don't have one already, apply with your bank. One notable exception is a service offered by PayPal called Website Payments Pro, which bundles merchant and gateway services together and does not require a separate merchant account.
3. A payment gateway that supports your merchant account

Each of these services will have its own set of fees, so shop around and find the best set of features and value for your needs.

A helpful summary of the entire process can be found here. CWS specializes in developing Web applications that make businesses work better. If we can help you implement an online payment solution, contact us at support (at) cws (dot) net.

Ask CWS: How do you track customers?

Question:

I own a small company and have a hard time tracking all of the conversations we have with our clients. We have several employees now, and it always seems like one employee tells a customer something and then another employee tells them something else. How do you keep track of communication you have with clients so that everyone is on the same page?

Answer:

This is an excellent question and one that was a challenge for us too (especially as as we grew). As you mention, it was easy at first because I was the only employee and knew everything about each customer. But as you grow, there is no possible way that you can handle every customer request. So, you do the logical thing and hire additional employees and hope that everything will go well.

It won't.

You'll soon realize that you could have done a better job training your new staff. Or maybe that they handled a situation just a little differently than you would have. Or even worse, that something was forgotten and now you have an upset customer that wants to speak to the boss! You think to yourself, "How could this have happened?"

Wouldn't it have been nice to know about this situation BEFORE it turned into a big deal?

Of course it would, and that's why we started using some web-based software called Highrise a while ago. In the most simple terms, it's a website where we track email and phone conversations with a customer. This means that any employee can pull up a customer and see who said what to them, how they communicated, and when.

I know you're probably thinking, "You take the time to re-type every email you send to a customer?" Hardly. Each employee is given a Highrise "drop-box" address that they BCC each outgoing email to. This attaches the email to the customer so that other employees can review it if the need arises.

In addition, Highrise has an RSS feed for all communcation. This means that in Outlook, we can keep an eye on all communication that we've had as a company that day. Want to know if Johnny called Customer XYZ back today? Just review the RSS feed and you'll see everyone that Johnny communicated with that day. It's that easy.

Our Highrise account is affordable at only $49/month. It's an invaluable tool as it includes information about everyone that associates with CWS. Highrise offers a wide variety of plans based on the number of contacts and emplyees you have. Check it out.

My Inbox: Abandoned Shopping Cart

Earlier this week, Jon wrote about E-commerce R.O.I. and mentioned that 60% of users will abandon a shopping cart before finishing the checkout process.

I was one of them yesterday.

Let me explain -- I received a catalog in the mail from a company called IDville.com, which sells employee identification tags and such. We've been contemplating enacting a security policy at our building where all visitors must sign in/out. So, I started the order process for a Visitor Log Book at IDville.

However, during the checkout process for this $17.95 item, I realized they wanted another $8.00 to ship the item to me. This made me change my mind and convinced me that I might be able to buy a similar item locally.

Now the important part of the story. IDville impressed me by sending the following email this morning:



As you can see, they noticed that I never completed the order yesterday. Since I had started the checkout process they had already captured my email. Instead of just forgetting about me and losing the sale, they then sent me an email with a link to "proceed to checkout now."

This is very smart.

Not only did it remind me about their company, but it gave me yet another option to complete the transaction I had already started. If they can get just 20% of the people to come back and complete an order by using this method, it could mean an increase in revenue of 50% or more. Great idea.

How Long Should You Keep an Email?

I don't like to delete emails. It's true, I'm the guy that can find something that was sent to me long before Britney Spears married Kevin Federline.

This means that my inbox is loaded with tens of thousands of emails, some of which are from as far back as 2004.

This prompted the topic to come up recently at our weekly office meeting. How long should you keep an email? A week? A month? A year? Forever?! What if you delete it and then you need it again for legal purposes? Once it's gone, it's gone forever.

The discussion quickly escalated to what type of policy a company should have regarding saving emails. Up to this point, CWS has had a loose policy that we keep a copy of all email communication with customers, but delete all those emails from your brother-in-law. You know, the ones that you shouldn't be getting at work in the first place.

But if your company policy is to keep a copy of every email, how do you monitor whether this is actually being done and support mailboxes that become very very large? This brought up an interesting discussion... Does your company have a policy on deleting or saving emails? If so, what is it and how is it enforced?

Does your website make you money?

How profitable is your website? When people visit the site, do they take action? Do you even know what you want them to do? Unfortunately, too many organizations fail to ask these questions, and thus fail to understand their website's ROI (return on investment). ROI is a fundamental business concept, but it's too often neglected in this specific area.

According to the book Web Design for ROI, there are 3 key figures to ponder when considering a new website project or redesign:

• 43% of retail sales will either be influenced by or complete on the Internet by 2012
• 83% of businesses now use the Internet to research potential vendors
• 75% of users admit to making judgments about a company's credibility based on the design of its website

The bottom line is that a large number of people will make business decisions based on the form and function of your website. How appealing is yours?

Even small details such as updated content and appealing visuals can make a crucial difference in keeping people on your site. Imagine a business owner who spent a lot of time, effort and money remodeling the interior of a store, but left the outside looking like an old, crumbling ruin. Customers would quickly assess the credibility of the business and pass it by.

The average home page abandonment rate (the rate at which visitors leave a site within a short period of time) is between 40% and 60% in general. Why? Because visitors decide almost immediately if they've found what they're looking for. What the site actually offers is secondary to what a customer thinks the site offers. What if a small change to the wording or placement of elements on your homepage reduced the abandonment rate by just 10%?

E-Commerce ROI

Nowhere is ROI more critical than on websites that directly sell a product or service. Unfortunately, some studies show that 60% of customers drop their purchase during the checkout process -- after they've made a buying decision! Imagine a restaurant where 6 out of every 10 customers ordered lunch and left before it was served. Any rational business owner would consider this unacceptable.

E-commerce site owners should constantly monitor the usability of their systems. Does the checkout process makes sense? Is it simple and free of distractions? Think about it... before you lose another customer.

Converting Traffic Into Sales

More traffic does not automatically mean more sales. If the website does not effectively convert customers into sales then the traffic is not useful. Keeping visitors on the site long enough to perform a critical task is what counts. The longer the visitor stays and learns what he/she needs, the more likely he/she is to convert.

How do you track conversion rates? Measure actions -- filling out a form, requesting a free sample, ordering a product, or contacting you. Track your conversion rate on a daily basis and see if you can improve the numbers. A simple formula would be the number of people who completed the desired action divided by the total number of visitors. You can even set up Google Analytics to do this automatically and email regular reports to you.

For a consultation on website ROI, please contact us a support (at) cws (dot) net.

Ask CWS: How do Domain Pointers Work?

Website owners commonly use more than one address to route traffic to a single website. This practice is called domain pointing. Although the concept is relatively simple, there are actually several separate systems involved, so it's helpful to understand what's happening when you set up or change a pointer.

DNS (Domain Name Service)

Anytime you ask your computer to access a website, it has to map the friendly address you typed in (for example, http://www.cws.net/) to an IP address, which works much like a phone number -- it's uniquely tied to the server that will ultimately handle your request. That DNS query is a lot like looking up a person's phone number based on their name in a phone book, but the computer also needs to know where to find the information in the first place.

When you register a domain, you give the registrar (Network Solutions, for example) two or more name servers that will provide this information. Usually these are provided by the same company that hosts your website.

Web Server

Once a name server gives the requesting computer an IP address, it can connect to the server that holds the website. Often a single IP address can be used for many different sites, so the server software acts like a switchboard operator, examining each request and sending it to the right place. When multiple addresses are pointed at a single site, it must be configured to accept traffic for each one.

Setting up or changing a domain pointer requires that, for each address:

1. The registrar has the correct name servers listed.
2. The name servers report the correct IP address.
3. The Web server accepts and correctly handles the incoming traffic.

People set up domain pointers for many reasons -- most commonly to accommodate misspellings or variations on a company name. Sophisticated marketers might use a particular domain exclusively with different advertising channels and monitor the performance of each.

However, there is a danger to watch out for. Search engines like Google may consider each domain as a separate website, and if there are too many with perceived "duplicate" content, they may not rank as well in search results. It's often better to choose one address as the primary, and redirect traffic from the others to it.

Registering alternate domains can be a valuable tool in your Web marketing efforts, but it's important to make sure all the moving parts are covered. Drop us a line at support (at) cws (dot) net if we can help.

The Value of Clear Writing

Many people think of design in purely visual terms. This kind of thinking can influence everything from the kind of car we buy to the food we eat. We're attracted by things that look good, and style is, in fact, an important component of good design. But it's not the whole picture.

A great-looking car with critical safety issues would not be well designed. Nor would an innovative packaging system that didn't keep food fresh. Good design not only means that something looks good, but that it performs well, that it's efficient and that it's reliable.

I have an ice cream scoop that fits this description perfectly. Designed by Michael Graves, it's heavy and solid, making perfectly round scoops even when the dessert is solidly frozen, and its polished surface never sticks. It's also ergonomic and durable -- a simple product that does its job well. Nothing complicated.

When it comes to the Web, one aspect of good design that's often overlooked is writing. And yet the content of your site is what will ultimately make it succeed or fail as a business tool. Visual presentation is important -- to establish credibility, as an expression of your brand, and to give appropriate structure to your content -- but the content itself is fundamental.

Unfortunately, many people write website content as an afterthought. It doesn't have to be complicated -- indeed, it shouldn't be, as people read more slowly on screen than on paper -- but it ought to be thoughtfully considered as a core component of design.

In general, writing for the Web should be:

• Clear and brief. People who use the Web a lot get in the habit of moving quickly and don't like to read lengthy texts (with a few exceptions). Help them learn what they need to know with minimal effort.
• Correct. English isn't everyone's field of expertise, but we all know someone who's good at it. Have your content proofread, because errors will both undermine your credibility as a professional and lengthen the time required to understand the material.
• Well organized. Judicious use of headings, bold text and lists makes it easier for both humans and search engines to capture the essential points on a page.
• User-centric. Address the questions that your visitors are asking, rather than just telling them what you want them to hear. Use the kind of language they use, not industry jargon (unless your audience is likely to be using such niche terms when searching).

When you undertake a website project, consider the total package. Don't hire anyone who is just an artist, a programmer, or a businessperson. It takes attention to detail in every area to make a product that's truly well designed, whether the end result is as simple as an ice cream scoop or as complex as a building.

Lessons from a 3rd Grader

Back in December, we heard about a website called DonorsChoose.org which has the goal of helping teachers fund projects for their classroom. The concept is rather simple:

1. Teachers ask for materials and supplies for a project
2. Donors log on and give to projects they find compelling
3. Students learn and provide personal feedback to the donor.

During our search, we found a class of local 3rd graders that needed a few hundred dollars for storing their supplies. The project was already partially funded, so we decided to top it off.

Today, we received a thank you packet in the mail from the class. I say "packet" becuase it included not only a letter from the teacher, but also each of the kids. They told us how much they appreciated our donation and explained how helpful the jabberwockies (that's what they call them) are. Even better, our thank you note was the first letter that these kids have ever typed on a computer.

We think that's pretty cool.

If you're interesting in experiencing something like this for yourself, there are several teachers in Rochester that are looking for funding right now. Searching for a project is easy as you can search by state, school, grade, subject, and much more. Check it out.

CWS Exhibits This Week

CWS will be exhibiting at two tradeshows this week. On Tuesday, March 4, we'll be at the Southeast Minnesota Association of REALTORS annual Affiliate Fair. On Thursday, we'll be at the Ramada Hotel and Conference Center for Business After Hours EXTRA with the Rochester Area Chamber of Commerce.

Please stop by and see us if you're attending either of these events.