Lensman first told me about his $10 porn project in Miami. It sounded like a good idea.... I figured he was going to do some type of cross-sales so he can charge a surfer $10, and be able to pay out $25 to webmasters.

The guy from Epoch went on GFY praising him for his new "business mode and innovation", and these are the people who KNOW the numbers...

However, I wonder what kind of long term risk there is in having pre-checked cross-sales for HIGHER prices then the initial sales of the sites. Wasn't a few programs doing something similair - with $1 porn sites, then cross saling people with 2 pre-checked boxsfor $34.95

IF Epoch says the chargebacks are lower - that must be the case, but logically it does not make sense to me. I know with propert notification, blah blah blah....

Just still seems like the same old scams this industry has been built on....

I dunno,maybe retention is for ever, so it becomes a pure banking exercise of paying $25 now,to get 80 over 8 mths. I dunno.

I too would have thought a $10 join with a 34.95 crosssale would get ugly.

This is what I figured as well....

I dunno....

Actually the program you're talking about has two pre-checked boxes, each for $1 for four days, each of which then go to about $20 if not cancelled after the four days. They also stand out nicely and are in bold and come before the submit button.

All in all, for those who approve of prechecked joins, that's light years away from the *cough* "free" AVS model with the Times Roman Italic at -1 in light grey on white found about five inches below the submit button to an instant $40 join.

I think the idea of a $10 join is decent, but the $40 cross sell kills things.

My concern is this. Lets take Lens program for example. Say you send traffic to the 10$ ebony site with a $25 payout, and also traffic to his $40 per trial ebony site.

Do we really think that the conversions are going to be 2x better on the $10 site to justify the lower payout of $25 (of course the $25 payout is inflated by the $40 cross sell)? I do not think so, I think they would be about the same, or even better on the site with a trial of $3-4. Surfers are not economists. From my perspective of sending out traffic, the $10 sites are not a good solution, unless my #'s are very wrong.

Drav it may be better, but it still does not feel right to have cross sales cost 4xs as much as the original site being joined.

It probably works.... but not sure if a $25 payout would be worth it. I would be interested in seeing real numbers.... but I know I will not. But I suspect higher payouts might be in order with 2 prefilled cross sales.

Some are thinking that the $10.00 joins and all that will help keep the cb's down and hopefully under 1%, as you are pushing more joins, etc.

Todd THIS makes sense ONLY if there were NO cross-sales. But Lensmans new programs has 2 PRE-CHECKED cross-sales on it.

From what I understand, cross-sales tend to lead to chargebacks.

A guy goes in to join a site, seeing $10 everywhere - next thing he knows he is getting tagged for $50 a month on 3 seperate charges on his credit card?

OF course if Lens is sending the cross-sales to someone else - I guess its their problem not his with CBs.

My question - and it really is a question, not a smart-ass comment disguised as one - is this really new?

No it is not. That is why I put "innovention" in parenthesis.

I have seen the $1 porn sites, that had huge, pre-checked cross sales built in and was paying out $25 per signup.

Mike,

I was thinking kinda the same thing re: cross sells

The thinking is probably, more signups on the 10.00 program to help the '#'s" with your other programs. cb's on one hand, sales over here cheaper, keep under 1%, etc.

Lensman IS on to something.

Lowering price points is not an attempt to decrease ratios by increasing sales it
is a method to decrease the number of inbound chargebacks thus reducing ratios.

Lower price points equal fewer chargebacks.


Sites priced at 39.95 are going to chargeback at nearly twice the rate of
those priced at under 25.00, this is a fact.

With the New VISA thresholds coming up in October those who are not yet compliant may
want to consider lowering pricing in order to become compliant.

Clay
EPOCH

Clay, I understand this, but what about the pre-checked cross sale....



$1.00 going to $38.26 monthly pre-checked seems to go against your whole point of lower sales prices.

How has the Shark fishing been?

I have the photos online if you want them - drop me an e-mail.

The cross sales go to other companies, so the related chargebacks are their problem. There are some who can manage the risk associated with the cross sales...and some that cannot. Those that cannot manage the risk but continue to accept them will not be around for the show in January.

**

I actually started Kart Racing this year which took time away from the sharks.


Clay
EPOCH

The cross sales go to other companies, so the related chargebacks are their problem. There are some who can manage the risk associated with the cross sales...and some that cannot. Those that cannot manage the risk but continue to accept them will not be around for the show in January.

**

I actually started Kart Racing this year which took time away from the sharks.


Clay
EPOCH[/b][/quote]


Smart move on Len's part then!

Kart racing huh? Sounds like fun!

I sent you an e-mail with link to photos....

Nothing like doing 80 mph a few inchess off the ground!

Clay
EPOCH

Nothing like doing 80 mph a few inchess off the ground!

Clay
EPOCH[/b][/quote]


Sounds kinky!

Hmmm. I would think cross-selling to your own other sites where you have full control made more sense then sending to others, no?

If you're sending your problems elsewhere and elsewhere are sending you their problems, seems like business as usual and nice way to help eliminate your partner, er, um, competition.

hmmmmm this may possibly be the stupiest thought I have ever had.

But I thought I'd run it past you peeps.....

Would there not be any sense in say the "A" class proggies acquiring small/medium affiliate program with say 2- 10000 recurring members operating at a CB ratio lower than say 0.70.In order to absorb them into the bigger group and thus bringing CB's down overall. Those on the cusp ,surely,would benefit.

Is there no way this is doable?

Reading posts here and elsewhere,it is only slowly dawning on me how bad a time some will have operating at the 1% level.

Am I way off track?

If by "aquiring" do you mean purchasing the recurring members from someone? The only problem I could see is if VISA has a mechanism in place to prevent this from being done due to them wanting to prevent Company A from acting like they're really Company B.

Did that make sense? :unsure:

Are you talking about the first thing, or the second thing? A or B ?

:D :P

The recurring,the websites and transferring the processing.

Thus the whole thing would be owned legitmately by Company "A".

But you are prolly right.

It was just an idea I threw up.

You smashed it down ;-))

I'll shut up, now :)

unless lens is simply trying to build up a big enough database of $10 recurring transactions to 'lower' existing chargebacks by 1st october ... by presenting it as a gimmick and getting the gfy kids involved he's guaranteed himself several thousand transactions at the lower rate of $10 - keeping processing after october 1st is priority for lots of us at the moment - i just wonder what happens on october 1st to the company buying the cross-sells & in turn, what happens to lenmans business model - i doubt there's going to be lots of companies jumping up to buy $30+ cross-sells off other paysite companies after october 1st ...

is the trick to 1% chargebacks processing a lot more smaller dollar value transactions? if so, how do we turn $30 or $40 per month into 3 or 4 (or as many as possible) transactions without sacrificing the dollar value?

Weekly Memberships :okthumb:

We are all so stuck in the concept of monthly billing, monthly updating, monthly payouts ... & our entire business models for our paysites are based on paying affiliates an acceptable amount - eventually the affiliates will have no choice but to take less money - unless lensman has deep enough pockets to pay $25 for $10 for ever ...

Excellent post and points CJ!!

Clay some numbers I would like to see are.... where the majority of the chargebacks come from.. are they from stolen cc numbers/bad affiliates or are they from legit customers who could not figure out how to cancel?

by eliminating bad resellers out of our affiliate program... it seems not only has our weekly fraud review dropped in time.. but also seems that our retention is on the rise and our cb ratio has dropped.. basically better to have 10 good transactions over paying out on 100 that 90 are bad....

right now our highest amount of CB's come from people sending us xsells...

maybe its just us.. but I would think that one would recognize that maybe its not the price point as much as it is the sneaky xsell??? 2 cents

I'm buzzed...with beer in hand - horny and looking for porn...I see 10 dollars and sign up - then find 10 + 40 on my CC statement...I'm gonna chargeback...period

best of luck -
aeon

If you look at the overall fraud in Partnership Programs (PP) vs. PPS you will see that the incidence is typically much lower. PPS programs usually have a much higher cbk rate than PP. The payout structure for PPS is obviously more appealing to fraudulent affiliates as they get paid prior to the onslaught of chargebacks. I believe that the difference in chargeback ratios between PPS and PP are attributable to bad affiliates who run a variety of scams in order to generate sales.

Sure friendly fraud plays a significant role in chargeback ratios but I don't think there is much difference in PPS vs. PP in regards to FF.

I urge all programs to look at their affiliate base and cut those affiliates which are causing problems which result in an increase in chargeback and credit ratios. If you have affiliates sending straight to your tour and your average chargeback ratio is 1% then there is no reason why an affiliates indvidual ratio should be much higher than 1%. If you have affiliates running at 2-3% chargebacks there is a pretty good chance that they are frauding you.

In regards to xsales, remember with xsales you are getting sales from the sending companies affiliates. If that company doesn't do a good job at eliminating fraud in their program then there is a good chance that you will be on the receiving end of fraudulent transactions.

Clay
EPOCH

Clay, I see the point you are making here but webmasters who use PPS programs don't just do so to be able to scam the program - sure the instance is higher, but many legitimate webmasters just want to make the most money possible as quickly as possible - because they can!! How can we blame the webmasters for their 'take take' attitude when we created it ourselves?

We have made webmasters expect $40 per signup - why would someone take $15-$30 (@ 50% recurring) over $40?

Relationships between affiliates and programs have gone 2 ways in the last 6 months - much better or much worse - try being a webmaster program dropping payouts and trying to explain why to affiliates when there are still programs paying $40 ... webmasters are going to hang on as long as possible and go for the higher paying programs.

Although it would be smart for reducing chargebacks to switch to partnership programs, you may as well just hand your webmasters to someone else & hope like hell they come back when the axe drops ... I don't think PPS programs are going anywhere, but hopefully there will be more folks being creative (like ars & others) with their payouts so we can move away from the rediculous $40+ per signup

The catch 22 - billing effects payouts and payouts effect billing - which one goes first?

:wnw:

Dumb "I don't know nothin' bout no CC processing" question - doesn't VISA/MC etc charge per transaction? If so, how much extra would it cost to bill 4 times a month as opposed to once a month? Or am I grossly misinformed? (not MISFORMED!!).

Dumb "I don't know nothin' bout no CC processing" question - doesn't VISA/MC etc charge per transaction? If so, how much extra would it cost to bill 4 times a month as opposed to once a month? Or am I grossly misinformed? (not MISFORMED!!).[/b][/quote]
less than the cost of a $40 chargeback & potential loss of processing ;-)

the visa/mc fee is a % of dollar value ...

Ah! Sounds good then - thanks for the lesson! :)

:)

guess what!
i finally put ach check processing up to test yesterday on a low volume site and it works! :cdance:

took us long enough but we got there eventually :rolleyes:

Yipee!!! :bjump:

Todd THIS makes sense ONLY if there were NO cross-sales. But Lensmans new programs has 2 PRE-CHECKED cross-sales on it.

From what I understand, cross-sales tend to lead to chargebacks.

A guy goes in to join a site, seeing $10 everywhere - next thing he knows he is getting tagged for $50 a month on 3 seperate charges on his credit card?

OF course if Lens is sending the cross-sales to someone else - I guess its their problem not his with CBs.[/b][/quote]
We never have more than one pre-checked x-sell, and we don't do free trials. The CB rates on that are low. We have done really well at managing the CB situation, and x-sells are part of the mix.

Customers know what they are signing up for, and they like being able to get a cheap trial to check out another site. Most cancel, but some stay.

right now...any webmaster with half a brain aint gonna touch a revshare program unless they're awfully close to the folks that operate it. the only rebills I'll trust are to a couple avs companies. everything else is moved/being moved to PPS until visa gets through with it's purging.

i'm just a peon...but money is money...people speculating about how to meet the thresholds makes it real clear - get mine upfront. let the program owners/processors deal with this mess - they, and some of the shit they dealt with (cough "beast", "articistic/sometimes obvious KP"/violence) created it...I don't trust them anymore than they trust webmasters...and no one's gonna be selling homes/sports cars or cutting back on hookers to make sure I get my cash.

industry leaders & peons (like me) can posit opinions all they want...no one's gonna tell you they're fucked...they're gonna protect themselves.

I'll trust the wires and checks that clear.

best of luck -
aeon

No. You have a *GREAT* idea. The processors are scared of trying somthing that differs from their norm. Also, they get charged a per transaction fee. They say it's b/c of chargebacks/rf fears.. but in the end they'll take a really high risk 39.95 monthly charge, but not 4 1.00 2.00 or 5.00 charges. Trust me. I've asked and been rejected point blank like I was a newb asking for a cash advance. Oh well :)

I guess someday we'll all look back and understand why :)



Last edited by Hooper at Sep 25 2003, 08:10 PM

Erm, credit where credit's due - it was cj's idea. :) I'm just stepping in to play Devil's Advocate since Michael's over on GYI with a can of whoop ass. :P

....so the surfer knows what hes getting when you precheck a cross sale to another site?

Reminds me of that bogus $1 charge one of the processors used a few years back to try and sweeten the CB ratio...

Bottom line here is pretty simple... Anything that leads to a surfer getting a charge they weren't expecting is bad. Period.