[Note: Every so often I invite people trying to sell their products or services to microISVs to lay out their case here. I was very impressed by Alex's session at the drop me a line. P.S. I added the image ]

By Alex Rampell
co-founder & CEO, TrialPay

Sometimes, they’re just not that into you. Your customers, that is. It’s a difficult pill to swallow, but no matter how many edits you make to your copy, or layout changes to your Web site or even price reductions to your products, many visitors to your site simply will not purchase from you.

There is some light at the end of the tunnel, though. It turns out that your non-buying customers might, in fact, be great customers for another business. You can let these customers “pay” you by transacting with a non-competitive business, creating two transactions where before there were none. It sounds complicated, but it’s beautifully efficient and can significantly boost revenue, profit and customer loyalty.

Here’s how it works. Let’s say you want a software title but you can’t be convinced to shell out $20 for the license. When it comes time to pay, you have the option to pay by credit card, PayPal or by signing up for Blockbuster Total Access. The third option is a bit of a curve ball, but think of the simple economics: Blockbuster charges customers $20 per month whereas the software publisher charges $20 for a single user license.

It’s not hard to see that at $20 per month and 50% gross margins, Blockbuster can afford many multiples of $20 to acquire a new customer, far exceeding the cost of a $20 software title. So if Blockbuster pays $50 to acquire this customer, then all parties benefit: Blockbuster gets a new customer at a relatively low acquisition price (relative to, say, a television ad spot), the software provider makes 2.5x its regular price and the customer gets a free software license, courtesy of your partnership with Blockbuster.

In the real world of brick and mortar stores, it’s almost impossible for a cashier to sign up a customer for Blockbuster, especially if there are twenty more customers in line. But in the online world, other merchants are only a click away—and presenting dozens of offers in an efficient format is well within the grasp of technology.

Maybe a customer doesn’t want to sign up for Blockbuster to get software for free, but maybe he will shop at Gap.com or switch to GEICO or join eBay. But which offer should be shown to the customer in order to maximize revenue? There are the logistical issues of signing up a customer for another company’s products, but equally problematic is figuring out what offer would compel a customer to purchase, and presenting that offer at the appropriate time and in the most appealing manner.

Companies such as TrialPay exist in order to make the implementation of advertising-supported payment extremely simple and efficient. The key to the alternative payment model is that it’s easy to do, but very hard to do well.

Since different advertisers have different customer acquisition prices, knowing which advertising offers to show to whom proves to be an extremely difficult task, as the highest paying offers might have the worst conversions. Dynamically and optimally offering the right services and products is significantly more lucrative to merchants, not to mention more compelling to shoppers.

Where to Use Alternative Payment Methods

How can you differentiate between browsers and buyers, and what can you do with the former? If a shopper tries to abandon his or her shopping cart, you can display a message offering your product for free when the shopper completes one offer from blue-chip advertisers. Former customers who haven’t returned to your site in months or years are buying other things elsewhere, and you can win them back by offering your product for free or at a discount when they transact with your trusted partners – the same companies they are willing to shop with today. All of this yields you, as a merchant, incremental revenue, but also recaptures the attention and goodwill of your customers.

Using alternative payment methods also has the tremendous benefit of injecting positive seasonality into almost any business. People always buy flowers for Valentine’s Day, chocolate bunnies for Easter, fishing rods for Father’s Day, etc…Even if your business has nothing to do with Valentine’s Day and never will, you can give away your product for free when the shopper sends flowers to their Valentine—something your customer probably needed to do anyway. Through TrialPay, you will get paid the full amount for the free license, not to mention earn a loyal new customer that’s grateful for the deal he or she just received.

When done right, advertising-supported payments can have a nonpareil impact on almost any e-commerce merchant. It’s an efficient way of yielding more paying customers and utilizing the unique medium of the Internet to realize every merchant’s dream: turning every browser into a buyer, somewhere.
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For more information on TrialPay: www.trialpay.com.