Are You Using a Mobile Payment System? Part 1: Keeping Customer Data Safe

We have blogged a bit about mobile payment systems and the benefits they offer consumers and small businesses (Why You Might Want to Consider Offering Mobile Payments); however, what does a small business owner need to consider before implementing a system or when they switch mobile payment companies?  As with every business decision, the owner needs to do some research and make sure that the proper guidelines and procedures are followed to ensure a good experience for all. 

This week’s blog, the first of a two-part series, will focus on some of the security considerations pertaining to the device itself.  Next week’s blog will discuss measures, including insurance, small business owners can take to protect their businesses should the mobile device go missing or worse.  

What is at stake?

You very well could experience a security breach that (though not restricted to using a mobile device to collect payments but applicable to every method you use to collect cardholder data) with consequences that include:

An example of a mobile payment card reader.  Wikipedia.org

• cost of reissuing new payment cards,
• fines,
• termination of ability to accept payment cards, and
• "going out of business" (bit.ly/1iwnFUd).  

Still, even with these penalties, many businesses have been able to process credit cards with mobile payment systems without experiencing any problems.

Why is there so much concern about compromised data or a security breach associated with mobile devices? 

As you can imagine, and maybe it has happened to you, it is easier to misplace a smartphone or other mobile device compared to a register or computer that is either tethered to something or too heavy or bulky to just carry off without anyone noticing.

A safeguard that is suggested includes securely storing the device, in a safe for example, when not in use or fastening the device to a heavy, bulky item (such as a desk or counter) with a combination lock and cable, much as you would a laptop or desktop.  Concern is further based on “traditional security controls such as [anti-virus], firewalls, and encryption [not having] reached the level of maturity needed in the mobile space” (bit.ly/1ftLIm3). 

How can a small business owner using a mobile payment system protect customer data and their business?

Let’s first start with the device that you will use to collect payments.  A list of equipment and systems can be found here (Why Mobile Payment Systems Might Work for Your Business), but you’ll also need to consider device ownership, who can use the device, and (in certain instances) whether an employee can use the device for more than just collecting payments. 

If you are not already familiar with the PCI (Payment Card Industry) Security Standards Council, they work “to educated stakeholders (merchants, processors, financial institutes, and similar) about the PCI Security Standards…and promotes the awareness of the need for payment data security to the public” (www.pcisecuritystandards.org), in essence “keeping your customer’s payment card data secure.” bit.ly/1ix8PN3.  Retailers who accept credit cards are required to be compliant with the standards (next week’s blog will include an overview on how to be complaint).

Device ownership: BYOD vs COPE

The PCI strongly discourages what is referred to as BYOD (bring your own device), which involves employees using their own mobile device to process consumer credit card payments.  Instead the device should be owned by the business, regardless if it is used solely for “payment and acceptance for transaction processing” or for both business and personal tasks (bit.ly/1hayiqv).

Some companies do buy corporate-owned personally enabled (COPE) devices which they distribute to managers and other employees who process payments at remote locations.  In such instances these businesses permit employees to use the device for both business and personal use.  This allows the business to install and update software that might not necessarily be appropriate for an employee-owned device (bit.ly/1iCHYyj).  Updates can be pushed to devices and the business can seize the device when needed.  This particular arrangement is not unreasonable as employees are often provided with desktops, laptops, and tablets to use in their homes and when traveling. 

Basic mobile device security policies

Some of the more recognized security policies that you should implement:

•    Don’t store any sensitive cardholder data on the mobile device, or on any electronic equipment for that matter.  If you are using the smartphone or tablet and/or a mobile app to save customers’ addresses, birthdates, etc. for the purpose of keeping track of purchases (i.e. loyalty program) take steps to encrypt the data and only collect and store what is absolutely necessary. 

•    Be selective about what apps you download to the device and question why apps might need access to contacts, calendars, location services, etc. on the device.

Source: Pixabay.com

•    Require each employee who needs to have access to mobile devices to have a unique username and password.

•    Employees should be trained on how to properly use the device and owners should educate them on how to maintain device security. 

•    Don’t “jailbreak” or “root” your devices (iPhone, iPad, iPod touch, Android phone or tablets).  Jailbreaking or rooting a device allows the owner to download “additional applications, extensions, and themes” not available at the Apple App Store (bit.ly/1luD6Mb); however, Apple states on its website that doing could: shorten battery live, allow for security vulnerabilities, cause apps to crash, prevent future software updates, and similar (bit.ly/1iDCiEq).

•    Update your operating software.  Often you will get a notification but check the setting on each device often in case a push notification doesn’t go through. 

•    Keep apps up-to-date, too.

•    Beware of phishing emails (emails from individuals posing as legitimate companies with links to malicious software) and SMS texts.  Don’t click on any hyperlinks or URLs that look suspicious. 

All of these procedures, and other applicable best practices, should be included in your employee handbook and operations manual.  Just as you would expect your employees to adhere to a code of conduct when dealing with customers you should expect the same for those who have access to business-owned mobile devices.

No matter what type of device, mobile or stationary, that is used to collect payments it is the retailer’s responsibility to ensure that customer payments processed properly and that only the appropriate data is stored – and that it is stored correctly.  In next week’s blog we will continue the discussing and help you further ensure that you are operating a safe mobile payment system and have a policy in place for any issues that might occur with either a missing device or compromised cardholder data.

Kathy Kelley is a professor of horticultural marketing in the Department of Plant Science
Robert C. Goodling, Jr. is an extension associate in the Department of Animal Science

I Seem to Have Lost a Customer Someplace!

by John Berry, Extension Educator, Lehigh Co.

How much is one customer worth?  How much does it cost the business to lose one customer?  More than you want to know, and probably more than you can measure in real dollars.

Most people only measure the dollar loss of a sale, or how much revenue was lost for the year.  Big mistake.  For openers, multiply that times 20 years.  Losing a customer once could mean they never shop with you again.  And don't even begin to count the people the could have recommended.

The loss of a customer is more than the
dollar amount on one sale.

Then the real losses begin to pile up.  Besides telling everyone in the immediate vicinity, they will tell all their office mates, everyone at the next association meeting, everyone at the next annual trade show and convention, and - if you do a real bad job of recovery or service - report it to people in local media.

The real cost of a lost customer is the different between "cost of lost" and "cost to fix."  Now measure that against the cost of servicing, fixing, discounting or replacing the situation, defect or problem when you first learned of it.  Seems like a pittance compared to the paragraphs above.

The painful part comes when you ask yourself "How did this happen?" "Could I have prevented this from happening?" and "How can I prevent this from occurring again?"

If you have ever lost a customer you aren't alone.  It's not a one person battle.  It's not a one-idea solution.  You need specific facts before any ideas on how to minimize the issues can be formulated.  Start by switching places with the customer.  Try to use your stuff in their environment.  Try to call yourself from their office.  Wear their shoes, and walk around in them for awhile.  Ask your customer brutal questions.  The ones you don't want to hear the answers to.

Get closer to the customer's "real" life.  Meals and ball games can reveal relevant truths that arms length relationships won't uncover.  How do you do this with your existing budget?  You can't.  You must have a "win back" budget.  Funds that are earmarked to fix problems, create resolve, and build goodwill.

When you get back in - thank the customer for dumping you.  Tell them that without the loss of their business, this innovative solution would never have been possible, and you are willing to offer some (major?) concessions for a re-try at the business using these changes.  Notice we have not apologized or groveled.  Customers are less interested in apology than they are in great ideas, recoverable actions, and solutions to their problem.

And finally, get real.  Know the difference between a problem and a symptom.  Losing customers is a symptom.  Poor service, poor product, late delivery, or back-orders are problems.  Remember, it never costs as much to fix the problem as it does to not fix the problem.

Count Foot Traffic When Hosting an Event at Your Business

The number of shopping days until the fall and winter holidays are dwindling; and most likely you will host an open house or event to draw consumers to your retail outlet to do some holiday shopping.  In the past, we have offered some insight into hosting events (Events – Know When and How to Host Them and Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part III), and as a result a question you might be asking, “How will I know if the event was a success?” 

Certainly calculating gross and net sales is important but it is also important to document foot traffic – the number of people who attended the event.  It is key to know your customer counts so that you can determine if the event encouraged more consumers to visit than during an average day, or if the event needs to be redesigned to be more appealing.  Foot traffic counts also help retailers understand whether the event attracted more consumers than past events held during the same period. 

Obtaining foot traffic counts can be accomplished by: 

• Distributing invitations that attendees bring to the event to be admitted or requiring attendees to RSVP
• Counting attendees as they arrive at the event by either assigning an employee to manually count customers or installing an electronic sensor that tabulates the number of customers who pass through a particular doorway
• Asking customers to sign up for a mailing list or loyalty program
• Giving each attendee a raffle ticket and keeping track of the number handed out  

Each system has its advantages and disadvantage. 

• If invitations or RSVPs are expected you will also need decide if “walk-ins” will be admitted and how to capture this number
• Not all customers will sign up for your mailing list or loyalty program, or they may already be members unless you are launching these programs during the event 
• If attendees are counted as they enter a doorway—it is possible that they could be counted more than once if they exit the store and then reenter.  It is also possible that the person counting attendees could be distracted if others ask questions or for assistance.  You will also need to determine how you will “count” attendees.  Will you count all adults or will you count families (with two or more adults) and couples as one attendee?  It will also be important to “subtract” any employees, who enter the store through the same entrance, from these counts.  

Foot traffic can also help with planning for next year’s event.  Consider counting the number of customers who visit based on the time of the day and, if it is a multi-day event, the day they visit. These numbers can help with scheduling staff as well as adjusting the hours that the event could be held in future years. Additionally, if you invite other vendors to showcase their goods and services or schedule a special entertainer to perform, use these counts to schedule their appearances when foot traffic is favorable for all involved.  

Having entertainment at your event is a great idea to set the tone.
Just be certain to schedule performers during periods when you expect high foot traffic counts

Record not only foot traffic but also the number of visitors who access your website during and after the event. Also, ask customers to participate in an online survey and ask them if they are interested in attending the event (or if they did attend), what additional vendors or attractions they would be like to see, and how they heard about the event or if they first learned about it when visiting your site.
 

Pinterest Secret Boards - Make Use of Them for Your Business

Pinterest recently unveiled their newest feature - secret boards.  Here are a few pieces of information about secret boards and how you can make use of them in your business.

• You can have up to three of these secret boards (in addition to your public boards). 
• You can not make an existing board secret. 
• You can make a secret board public, but you cannot change it back to secret status.
• Only the creator of the secret board can make it public.
• Other people see your secret board through invitations you send allowing them to contribute to the board.
• There does not appear to be a limit on the number of invitations you can send to make people contributors to a secret board.

If you have a business where you deal with clients and need to show them pictures of things you are discussing (flowers, designs, packaging, labels, etc.) or even need a central place to archive links to articles and other online information (provided it's pin-able), these new secret boards may be a valuable tool to enhancing customer relationships and improving communication. 

A secret Pinterest board could also be handy as a tool for internal communication, idea sharing, and brainstorming.  Since original photos can be pinned, you, your family members, employees, or anyone you want to get involved, could pin photos of things they see away from the business to spark discussions or for future planning.

Since you can only have up to three secret boards at a time, managing your use of them will be important.  You can delete boards as you complete projects, allowing you to create a new secret board.  Your other option is to simply add and remove contributors.


For more information about Pinterest's secret boards, click here.  We invite you to visit our Pinterest boards here.  Do you think secret Pinterest boards will help you in your business?

Cross Promotion: Partnering With Other Business to Better Serve Your Customers, Part I

           With consumers desiring outdoor living spaces, complete with lighting and kitchen components, and baskets filled with wine, assorted cheese, and other food and non-edible items always proving to be popular gift items, how can ag. retailers provide such items when they do not stock and sell all the components?  One idea is to partner with business owners who sell complementary goods and services, thus the two businesses work together to help customers obtain a complete “package.”  

           Promoting goods and services offered by business owners you have an existing and trusted relationship with takes the guess work out of where to direct customers and your recommendation also helps reduce the risk for your customers.  Such a situation, known as cross promotion, is based on two (or more) businesses working together towards a common goal.  

        In this blog posting I’ve presented ideas for cross promoting in the retail space, but over the next couple of posts I’ll provide examples of how retailers can cross promote in other ways.  When cross promoting works, efforts coordinated with a complementary business provides certain benefits:
· expanding your customer base,
· greater reach with promotions and advertising,
· reduced marketing costs, and
· increased profits

Putting Items on Display

        Displaying items produced or sold by complementary businesses is one cross promotion strategy.  You may already have relationships with business owners who produce or sell items that would complement what you offer, but what if you do not?   What goods and services could appeal to your customer based on their demographics, behaviors, and interests?  If you do not already sell items like bath and body products, jewelry, specialty foods, place settings, or the like, search for businesses that do.  Once you have assembled a list, learn about clientele they serve, search for reviews customers post online about their shopping experiences, and investigate as much as you can about their business practices before requesting to meet.  Just as you put thought into developing a relationship with a new vendor the same amount of consideration is required when selecting a business to cross promote products.  

        Signage placed next to items should include a description of the product as well as information about the complementary business (e.g. business history, other available products, contact information) and an explanation as to why the product is so unique that you decided to display it in your store.  Don’t forget to ask the other business to reciprocate by incorporating select products you offer into their displays.

        The possibilities of what type of businesses to cross promote with are endless.  Displaying complementary items together is just one step, in the next few postings I’ll provide examples of how to cross promoting when communicating with customers and when hosting events, as well as the “costs” to consider before committing to this partnership.

Price Competition: Shoppers Value a Bargain!

Do you know a bargain hunter? You know, the type of person that is drawn to a "SALE" sign like a moth to a flame...  Most of us know one or two, I'm sure.  I learned a little more about these people last week, thanks to a paper presented at a conference by some researchers from Washington State University (Li, McCluskey, and Mittelhammer).

The research team analyzed the responses to "permanent" price drops (that is, those that were due strictly to supply and demand conditions) versus promotional, or short-term, price drops.  They used data from supermarket scanners, so they were able to analyze real transactions under real market conditions.  They did this for several different types of vegetables.

Guess what they found...  Consumers were more responsive to short-term price decreases than they were to permanent ones.  This suggests that promotions may be a better method to generate increased sales than being viewed as having low prices all the time.  On the other hand, it also means that promotions that happen too frequently may cause customers to pull back when a promotion isn't underway.

This phenomenon doesn't really surprise me.  I may or may not be related to a bargain hunter and I have come to understand that the purchase is more than the purchase.  Getting a bargain is a badge of honor; a story to tell friends, family, and co-workers.  I get that.  But there may be other factors at play.  In a stagnant economy like this one, we see shows like TLC's "Extreme Couponing" become popular.  To get these types of bargains, it often means buying in bulk.  So hoarding, or "stocking up" is a factor that drive sales during promotions.  (For something like vegetables, this may mean freezing or canning, so be sure to offer tips on how to do that.)

There's good science and economics behind pricing strategies that include short-term promotions.  Business owners should think about using them frequently, but not so much that they become the norm.  Watch sales (in dollars and quantities) to see how effective the promotions are.

Using smells to increase impulse buys

Have you ever walked into a bakery with the plan of just getting a loaf of bread, but the delicious smell of fresh baked chocolate chip cookies makes you impulse buy a few? By using smells, a food retailer can get customers to make impulse purchases.



The smells of oven-baked bread, fresh ground coffee, warm cookies, and hot soups can evoke positive memories for a customer. The cookies may remind a customer of a Christmas party or the hot soups may remind the customer of a cold winter day at Grandma’s house. Whatever the memory, smell is an important part of marketing. According to the Sense of Smell Institute, people recall smells with a 65% accuracy after a year, but only have a 50% visual recall of photos after 3 months.

"Setting the Mood for Higher Sales" article

If you are a retailer who doesn’t have enticing smells naturally produced at your retail outlet, you may still want to invest some research in the idea of scent marketing. Stores like Sony Style and Bloomingdale’s are using scent marketing to set the mood for customers. Sony Style uses a combination of mandarin orange, vanilla, and cedar which are thought to entice women shoppers. Sony Style also uses this scent combination in every store to create a “Sony brand smell”. Bloomingdale’s uses a baby power scent in their baby department and a suntan lotion smell in the bathing suit department. Also, the ice cream parlor in the Hard Rock Hotel in Orlando uses a waffle cone smell which is thought to have led to a recent 50% increase in sales.

How do these stores incorporate smells into their businesses without producing the actual item? Companies have been created that focus solely on developing your business’s signature scent. One firm, Scent Air (www.scentair.com), has produced a technology called ScentWave that dispenses these signature smells.




Scent branding may sound like a fabulous marketing tool, but you must first experience the retail atmosphere in the eyes (or nose) of the customer. Don’t over do it. Customers will not be rushing to the cookie display if your scent brand of cookies smells like 10,000 cookies just dropped from the sky. Subtlety is the key. Customers need a friendly reminder smell, not a smack-in-the-face smell!


"Scent Branding: Smell of Success?" article

As a consumer, do you feel that you make impulse purchases because of positive smells? Has a smell ever led you to not purchase a product? As an agricultural entrepreneur, have you seen sales increase when a new smell (like fresh baked bread) fills your retail outlet? Will you think about developing a “scent brand” for your retail space or product?