A number of years ago, Katie Couric published a book titled “The Best Advice I Ever Got.” Earlier this week, I ran across the book again and started perusing it just for fun. Times have changed a little since it was published. For example, Donald Trump is listed as chairman and president of The Trump Organization. His advice, by the way, is “know everything you can.” Not bad – I’d add one more piece to it though: “Know everything you can and surround yourself with experts for everything else.” This is particularly true for the complexity of the payments industry.
The bookshelves and internet are brimming with all sorts of advice and unwritten rules about starting, running, and growing a business – some of it good – some of it not so good. Below are four conventional wisdom myths that I believe can actually harm the growth of software companies if you buy into them.
This is a pretty widely accepted mantra in the business world. But the truth is customers often don’t have enough information to be right – not all the time. They “don’t know what they don’t know,” and that is where a strong partner can guide them.
Customers can send you off to the races trying to write to APIs or developing integrations with a multitude of different gateways, shopping carts, and payment processors – all because they believe a given provider is right for their business. There may be absolutely nothing wrong with their choices but the time and money you spend enabling your software to work with those providers are not so good for you and can result in greater cost for them. That doesn’t even consider the unpredictable service level they may receive from their chosen providers, which may fall short of the standards you uphold, and ultimately reflect poorly on you and your software.
Naturally, you want to be accommodating and give your customers options but partnering with a single or limited number of carefully selected providers will make integrations more manageable for you and more cost-effective and service-friendly for your customers. And I’m pretty confident that is much more important to them than having options.
This is may be true when it comes to cheap paper towels, cuts of meat, and a host of other consumables where a low cost is often synonymous with low quality. The flip side applies as well – higher costs are often perceived as equivalent to higher quality. This can be a myth in the business world if premium prices get charged and very little added-value gets delivered in return. Consider the following example:
Recently I was talking with a customer who had previously contracted with a mega-payments provider thinking it was the safe, more reliable choice. She found out rather quickly that there were a lot of added fees and other hidden costs for which she received nothing of value in return. She definitely was not getting what she paid for, and in fact, was getting less than she paid for considering how difficult it had become to get customer support on the phone.
Be wary of rate creep from your payment providers. Your customers hate rate creep – it’s stealthy and it rarely comes with added value. Make sure your payments partner or any external service provider offers a fair, transparent approach to pricing and operates with the intent of delivering more value than you actually pay for.
Okay, this is less of a myth and more of a Rolling Stones song title, but you’d be surprised how often I hear it repeated. As a software company, it is very likely that what you want is simply to deliver what your customers need. Anything less would be gambling with your business and your reputation.
Whenever a partner tries to just hand you an API and walk away, keep in mind that you CAN and SHOULD get what you want. You really don’t want to work with providers that expect you to whittle your needs to fit their solution. Your partners should be delivering what you want – a solution molded to fit the needs of your customers.
In a way, this kind of makes sense to me – don’t spend your time and money on things that are working fine. But if it truly were embraced, we’d all go home tonight to watch TV on our black and white sets and talk to each other on our flip phones.
Software companies are always tinkering with features in their platforms that “ain’t broke” yet still require periodic refinement to add capabilities and conveniences to customers. Less common is for payment processors to follow suit with their pricing. After all, customers are paying without complaining so why tinker with something that’s working fine?
A true payments partner thinks longer term and sees well beyond this month’s invoice, though. Customer transactions should be monitored by your partner(s) to continue to verify your customers are getting and keeping the lowest rate possible. Ensuring that customers receive the best rate may be sacrificing some short term margin, but it is more than made up with customer relationship longevity. Your customers will appreciate it, and they’ll show it with their loyalty to you and your software.
So there you have it — four pieces of conventional wisdom exposed as nothing more than myths. Maybe someday Katie Couric will write a business sequel on the “worst advice I ever got.” I’m sure there are scores of entries that you all can provide.
What business myths have you busted along the way? Just in case Katie calls.