Is it the end of Cross-Sales?

Evil Chris · 11-13-2003, 11:09 AM

Silvercash is no longer accepting cross sales and I'm thinking this may be the rumblings of cross-sales going away for good.

Here's the article.

I applaud SC for taking these measures. But I wonder if their monthly membership charges will go back to $39.28 from the current $29.28 since they aren't cross-selling anymore.

Pidgin · 11-13-2003, 11:19 AM

They are not the first really.
There ae several companies today that don't do cross sales (at least not "outgoing") afaik
Pussycash.com for example. I think they never give traffic but only buy. (Am I wrong? Adam?)

I always wondered about cross-sales.

There is a common belief that only big companies can be really profitable these days. Maybe the only way now becomes - never give out your surfers?

11-13-2003, 11:22 AM

Could be...There are still people buying them though, prechecked and free. Will be interesting to see what happens.

razoractive · 11-13-2003, 11:25 AM

Well since we ( OrgasmCash) don't do cross sales I can't really comment on this...LOL

I am sure there are reasons for Companies such as SC stopping the cross sales, so what are they ?

Ray

OrgasmCash
Aim: Razoractive

XxXotic · 11-13-2003, 11:26 AM

i hope it's the end.... cross sales are a LARGE contributor to the state the industry is in today. Too many greedy morons out there with multiple and hidden cross sales, no wonder visa's pissed. Hell I've been doing this for a while now and to this day I still would NEVER give my CC# to a porn site... I know better

people in this industry brought it on themselves

Ramster · 11-13-2003, 11:27 AM

I don't have a huge problem with crosssales. BUT when a site has 2, 3 or even 4 of them clicked then it's no wonder there are chargebacks when a surfer gets billed $120.

Overall, I think it would be good for our industry to lower all the deception that goes on to keep Visa off our backs. If it lowers payouts from $40/$35 down to $30 that's fine with me. I think conversions would be better in the long run. What are the chances of the guy that was billed $120 ever joining a paysite again?

Wizzo · 11-13-2003, 11:28 AM

I think it's likely going to change, but not end all together...

Danny_C · 11-13-2003, 11:28 AM

Cross sales in general will never go away... but the way they're done may have to be adapted to the times... as all things are.

Cross selling is a standard marketing practice in all industries, and all mediums. I bought some crackers once, and on the box they gave a good tip for eating them with a certain brand of cream cheese. I tried it, and it was good.

Bruno Dickman · 11-13-2003, 11:29 AM

Good move, SC! Pre-checked cross sales are IMHO one of the biggest sources of Charge Backs. Disabling it shows the customers that the company has respect for them.

Ray, the reason is probably the high level of CBs.

Take care,

Bruno Dickman

clubsexy · 11-13-2003, 11:30 AM

It may be just coincidental that the cross sales craze and all the visa regs all happened withing a short time of each other really.

I have been making less and less sales with sponsors since all the visa problems, processors shutting down, AVS systems abandoning their webmasters and programs.

Shit this business was awesome around 1998 - 2000. Now it's hard to get any sales anymore...

Toolz · 11-13-2003, 11:35 AM

While I believe this marks the beginning of the end of programs buying them from other programs, people will continue to cross-sell their own products/similar products. I.E. you have a dating site you can easily cross-sell it with any adult site or a similar product:

I.E. cross-sell the surfer a DVD or some other type of hard-good you can deliver to them, hard to chargeback a signed UPS slip of goods received.

Jeff N · 11-13-2003, 11:39 AM

Hey Chris,

Across the board the bottom line is Cross Sales = Higher CB's.
Especially Pre-check. Don't let anyone tell you differently.

However, there are companies that have been very successful even with pre-check. As you know, its all really comes down to clean traffic, customer support, and a quality program.

My advice, if companies are worried about the 1% threshold stay away.

razoractive · 11-13-2003, 11:40 AM

XXXotic I actually agree with you about the Charge Backs...

Ray

OrgasmCash
Aim: Razoractive

NetRodent · 11-13-2003, 11:43 AM

It seems to be conventional wisdom that cross-sells have higher chargeback rates than normal transactions. We cross-sell to our own sites (pre-checked) and don't see a significant difference in the chargeback rate between primary and cross-sold transactions.

This leads me to believe the chargeback problem with cross-sells come from "trading" them with other sites. A fair number of our members write to us when they want to cancel and usually say something simply like "cancel me". They rarely specify the subscription they want to cancel and almost never write seperate emails for the primary and cross-sold subscription. I don't think surfers really realize that there are two seperate subscriptions. Thus when someone writes "cancel me", we cancel both subscriptions.

When a third party becomes involved you really can't cancel both subscriptions unless there's some excellent communication between your customer service departments. The customer thinks he's cancelled but he's still getting billed and by a different entity. I think that's why many people have problems with chargebacks on cross-sells.

Phoenix · 11-13-2003, 11:44 AM

Hard to comment on what Silvercash is doing.
I am confident they are making moves that will strengthen their position and help to keep them turning sales for a long time.

I'd like to see a focus on quality sites for surfers. Real content that they want. Keep them happy and they will keep paying, rip them off and charge them a fortune and they will be pissed.

I don't know who thought it would be a good idea to cross sale someone 3-4 times for full memberships just to wank for 5 minutes. However, everyone made some big money when it went on. Party time is over though.

Look for quality sites. High retention and revshare programs.
Short term thinkers will be squeezed out by future rules and regualtions.
Be wary of people promising you the world.

sweetums · 11-13-2003, 11:47 AM

Very nice....

Some excellent points have been made in this discussion. I think what we're seeing thru all of these regulation changes in the industry -- whether at the CC level or the fazing out of cross-selling -- is an indication of this industry's maturation process.

I'm not surprised that cross-selling wasn't a successful route for most companies to take -- the gains were definitely short-term. Just look at what we've learned about 'friendly' fraud in this industry with respect to chargebacks...at that's at a price point of $30, $40, or $50/month. Is it any surprise that with cross-selling we saw an increase in chargebacks?

baddog · 11-13-2003, 11:47 AM

and people wonder why I don't want to modify my business model

never had a chargeback yet, and like they say, if it ain't broke, don't fix it

Evil Chris · 11-13-2003, 11:52 AM

I'm posting the following which came from a webmaster who wishes to remain anonymous for reasons that are more than obvious.

****************
Hehe my friend, if the industry removed x-sales then 80% of the top 10 would be out of business. They buy blocks of qualified x-sales that have epassport cc cards for $8 each and then each sale they get, they get $4 back from the marketing company.

Companies are having to spend as much as 50k a month in joins.

Why?

Chargebacks. If you have over 1% and over 100 cb's and you buy 100k qualified joins over 3 months you cb ratio will go under 1%.

It's a way of business webmasters don't need to know about unless they are paysite owners. Also if I said then every major paysite owner and epoch, could find out that it was me that told the world the dirty secret.

BTW, it has a name at VISA, it's called the Babenet Shave.

The "real" babenet shave is much worse, includes rotation of merchant accounts.. Of course visa does not allow this.

They have agreed to allow this new system which uses epoch accounts.

BTW, epoch has been doign good enough that a lot of "problem" companies are allowed to move over the epoch for a grace period. Epoch then helps the company go under 1%. It's a last hope if you knwo what I mean
****************

sherie · 11-13-2003, 11:53 AM

We had a brief brush with the xsales....we no longer deal with them. But to each their own, they just result in chargebacks and who the hell needs that? Especially now with the new visa regs.

Billy-Purecash · 11-13-2003, 11:56 AM

Interesting reading Chris.. wonder what the future holds ??

Toolz · 11-13-2003, 12:03 PM

Chris as in everything there's worker bee's and queen bee's. 90% of the workers don't understand what the queen does to make sure they can eat, the other 10% has an outside idea of what's going on. What you're describing sounds like balancing transactions to me, which I thought was as no-no with the new Visa regs and wouldn't matter anyways as they treat all your URL'S as one company regardless of where they're processed. Of course throwing in 100k extra transactions a month should theoretically drop anyone's cb ratio, however, if the customer doesn't know what he's being cross-billed for or never has access to the site wouldn't that just in turn generate even more cb's?

baddog · 11-13-2003, 12:22 PM

Quote:

Originally posted by clubsexy

Shit this business was awesome around 1998 - 2000. Now it's hard to get any sales anymore...

really? I had not noticed that . . . making more money now than ever

Evil Chris · 11-13-2003, 12:26 PM

Quote:

Originally posted by Danny_C
Cross sales in general will never go away... but the way they're done may have to be adapted to the times... as all things are.

Does adapting include rotating merchant accounts around to avoid the 1% rule?

I wonder what Epoch has to say about taking on "problem clients".

Toolz · 11-13-2003, 12:41 PM

Quote:

Originally posted by Evil Chris
Does adapting include rotating merchant accounts around to avoid the 1% rule?

I wonder what Epoch has to say about taking on "problem clients".

Chris,

I believe the way the new VISA regs are setup it doesn't matter who the actual processor is they now categorize your URL's as your "company" and those CB's follow you wherever you go, I may be wrong though, would be nice to get a word in here from one of the processers on the official ruling on this.

TondaB · 11-13-2003, 12:57 PM

Quote:

Originally posted by Danny_C
Cross sales in general will never go away... but the way they're done may have to be adapted to the times... as all things are.

Cross selling is a standard marketing practice in all industries, and all mediums. I bought some crackers once, and on the box they gave a good tip for eating them with a certain brand of cream cheese. I tried it, and it was good.

Did they package up that certain brand of cream cheese together with the crackers so that you bought both for $6.99 instead of just the crackers for $4.99?

PattyeCake · 11-13-2003, 01:40 PM

I believe as well that Cross sales to other sites, especially the prechecked ones are a large factor in chargebacks...

Fetish Cash has never participated in cross sales as the numbers just didn't add up for us and our CB ratio has always been well under the line given by Visa.. we didn't want to change that

I believe the surfer is much more savvy than they were a few years back and I know I'd be pretty hot if I joined one site and recieved a charge for more than I joined... Most surfers know that all they have to do is call the CC company and say I didn't charge this and in less than 2 minutes it's all over...

I prefer Upsells to cross sales... and feel that prechecked cross sales to other companies/sites will do nothing but damage our industry further

ps: Hi Evil one

Evil Chris · 11-13-2003, 02:23 PM

Quote:

Originally posted by Toolz
Chris,

I believe the way the new VISA regs are setup it doesn't matter who the actual processor is they now categorize your URL's as your "company" and those CB's follow you wherever you go, I may be wrong though, would be nice to get a word in here from one of the processers on the official ruling on this.

I can only see Visa tightening their noose even further because what you have happening are companies purchasing huge blocks of signups for their sites through Epassporte (Visa) for the sole purpose of off-setting their chargeback ratio. It's nothing more than a shortcut. The chargeback ratio isn't truly dropping to under 1%, it only looks that way on paper.

Yo Adrian · 11-13-2003, 04:44 PM

Quote:

Originally posted by razoractive
Well since we ( OrgasmCash) don't do cross sales I can't really comment on this...LOL

I am sure there are reasons for Companies such as SC stopping the cross sales, so what are they ?

Ray

OrgasmCash
Aim: Razoractive

Well, the reason is simply to manage our cb% to ensure they remain under the 1% threshhold.

As we all know, members are far more likely to chargeback memberships gained through cross sales. Even when they willingly choose to accept the upsells, many get shocked when both, or all three, sites recur and charge the monthly membership fees.

We've taken some necessary steps to reduce our cb% to 1%, this is simply another one of those steps.

I should mention to all affiliates, this change only affects program owners who used to cross sell to us from their join pages... it does not affect anybody else in any way.

EvilDan · 11-13-2003, 06:44 PM

Gday Evil 1

We actually find cross sells reduce our overall chargebacks

And if you swap cross sells with other people, then your arse is grass IMO

Cross sells if handled well are a great sales tool, and the customers like it to

Handle only your own cross sells - end of lesson young Padawans

2 Evil

Seven888 · 11-14-2003, 01:12 AM

Quote:

Originally posted by Ramster
I don't have a huge problem with crosssales. BUT when a site has 2, 3 or even 4 of them clicked then it's no wonder there are chargebacks when a surfer gets billed $120.

Overall, I think it would be good for our industry to lower all the deception that goes on to keep Visa off our backs. If it lowers payouts from $40/$35 down to $30 that's fine with me. I think conversions would be better in the long run. What are the chances of the guy that was billed $120 ever joining a paysite again?

yea, I know I'd be pissed