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The Green SheetGreen Sheet

The Green Sheet Online Edition

April 27, 2009 • Issue 09:04:02

Street SmartsSM

Blog on, link in, tweet out

By Jon Perry and Vanessa Lang

Do you blog, tweet or wiki? You may think we are referring to an obscure code or something appropriate only for Generation Y (people born between 1978 and 1995). Would you be surprised to learn the fastest growing online social networking segment is over age 35?

Social networking at its core consists of communities in which people share the same interests or activities. Although social networking has been done in person throughout history, for this article we are focusing on the online social networking milieu.

Given how challenging it is to differentiate oneself in the payments industry, social networking is an avenue worth exploring.

But before we dive in, it is important to clarify what a network is, how networks came about and how they can be used. Since social networking uses the Internet, let's start there.

The Internet is born

We think of the Internet as "always" having been here. In reality, the Internet traces back to 1969. It was the heart of the space race during the Cold War. There were no Blackberrys; the telephone was the primary method of communication; physical telephone switching stations could be attacked and communication lost. The Internet was largely for the military and academic communities. Prior to the mid 90's, to acquire information from academic or military sites, you used tools like Gopher, Veronica and Archie.

Gopher, from the University of Minnesota (named for the school's mascot), allowed you to serve up files to users. Veronica and Archie were the rudimentary "search engines" of the day.

The Mosaic Web browser was born in 1993. Instead of command line tools like Gopher, Archie and Veronica, it used a new hyper text markup language (commonly abbreviated as HTML) through an application-level protocol called hypertext transfer protocol (the http found in browser address bars). This was hugely enormous and groundbreaking.

Between 1995 and 2000 the Internet shot up as if launched from a cannon. For five years, dot-com companies popped up everywhere. Venture and angel funding flowed faster than a beer keg at the ETA Annual Meeting & Expo.

Strange things were happening in the marketplace. Dot-com stock was flying high. AOL LLC had purchased the giant Time Warner Inc. In 2001, it all began falling apart. The dot-com bust came.

It wouldn't be until late 2004 that we'd understand why the dot-com bubble burst. Yahoo's extensive research showed, "Seventy percent of U.S adults use the Internet as an information source when shopping locally for products and services, and 63 percent of those who make online purchases use search engines to research offerings before making a purchase."

Simply put, consumers were doing online research but buying from their local merchants. The dot-coms had great marketing and name recognition, but they couldn't convert window shopping to currency.

Networking jumps to cyberspace

Social networking started in 1999 with companies like LiveJournal Inc. (which offers a free journaling and blogging service), LunarStorm (a Swedish social networking Web site for teens) and Fotolog Inc. (which hosts a "photo-blogging" and social networking Web site).

It wasn't until 2003 that business networking site LinkedIn was launched. Then the market took notice and saw the true potential of social networking. MySpace launched in late 2003, followed by Flickr and Facebook in 2004, YouTube in 2005, and Twitter in 2006.

So, even the oldest of the social networking sites have been with us less than a decade.

Let's assume you are going to a conference or a convention such as The Electronic Transactions Association Annual Meeting & Expo or a regional acquirers association meeting.

You follow the signs to check in. Around the check-in table, you see unique groups of people.

In one group, colleagues are catching up, talking about their families. In another group, people are sharing pictures and experiences of their recent vacations or cruises.

You pick up an agenda and notice there is a breakout session on merchant cash advances. You think, "I offer this product, but I'm always interested in what's new. Maybe I'll find a better offering if go to this session."

On the periphery, you see people text messaging. They apparently are giving status reports or updates to those interested in what they're doing. You also notice the agenda lists a sponsored open bar at 7 p.m. in one of the hotel suites, and you plan to attend that, too.

Communities are shaped

This fictitious scenario of in-person tradeshow networking is analogous to how social networking works. The accompanying chart in this story provides four examples.


This analogy focuses on four of the most widely used and established social networks available. This is not even close to a complete list. Other widely used social media, including blogs, online forums (like GS Online's MLS Forum) and YouTube, have significant impact when combined with social networking.

Many people contributed to this article through the MLS Forum, which is an example of a membership- and approval-based online forum. Billpirtle commented, "If [social networking] can build business, don't mock it.

Different people use different methods. Many businesses are thriving using social media. The point is keeping your name and or business identity out there. If I can get sales from it, I'll try it."

Others offered valuable words of caution. FastTransact said, "If you list your e-mail address or phone and fax number, be aware there are list strippers that will search for them and sell them."

People make connections

Networks help us find jobs, friends and perhaps love. Your personal network may have huge potential, but it doesn't do much for you unless you know who's in the network.

Let's say you know Mike. Mike is a friend of Joe. Joe knows Vanessa, who hires you for that new job you have been dreaming about. You would never have known Vanessa had it not been for your relationship with Mike and his relationship with Joe.

And in the real world, we often don't know who someone else knows. That's why when we meet someone who is friends with one of our friends, we say, "Wow! What a small world."

Social networks let you visualize your friends' friends and colleagues. When Jon was looking for a position five years ago as a vice president of sales and marketing, he saw an ad on Monster.com.

The ad gave him the e-mail address for the human resources manager. This e-mail address gave him the URL to the company's Web site.

Once he had acquired information about the company - who owned it, the name of the chief executive officer, etc. - he was able to go to LinkedIn and find people who had connections and inside information on both the company and the position available.

When he submitted his résumé, which was tailored to the company and personalized to its CEO, he was called immediately to interview for the position. He was offered the job that week - at a salary above what had been budgeted. Apply these tools when hiring MLSs or employees, as well as in finding the right partner to send your accounts to.

Major benefits accrue to merchants who learn to use social media. One of our customers uses Facebook to create a "fan base." His happy customers "write on his wall" about the merchants' great service. He uses his Facebook page to attract new customers - creating another way to generate "word of mouth" referrals and buzz.

Monitoring is essential

When we spend 30 or 45 minutes helping a client successfully establish an online presence, it goes a long way in building a customer for life. But there are some cautionary notes that need be addressed.

As FastTransact noted on the Forum, don't have a picture of yourself with a bong. This refers to the gold medal Olympian who lost millions of dollars in endorsements because of a picture he'd forgotten about that was posted online. The Internet knows all; it stores all; it is forgiving to no one.

So, check and double-check your comments before you post. If you are an independent contractor, make sure you comply with Visa Inc. and MasterCard Worldwide requirements.

We see independent contractor sites violating card brand requirements by doing business using unregistered names, not revealing the names of the entities they process with and listing rates, to name just a few unapproved practices.

If you are an ISO with noncompliant contractors, beware. Fines start at $10,000.

Make sure your Web site, e-mail address and every other aspect of your Web presence and business communications are all compliant with the card brands' and your acquiring institutions' rules.

To download a February 2009 Visa bulletin that answers questions related to this, visit http://usa.visa.com/download/merchants/agent_faq.pdf.

The power of the Internet is that it pulls people to you, whereas cold calling and direct marketing push messages and can be intrusive. Can utilizing social networking increase your company's new business? That is something you'll determine for yourself.

For us, social networking generates more than just business - it generates buzz.

Would you complain if you received an unsolicited call from a prospective client who chose you because he or she used Google, and it was your blog that explained interchange?

What's amazing is that the prominent social networks are less than six years old. The entire Internet, as we use it today, is about 15 years old, which begs the question: What will the next 15 years look like?

For more information, tweet us at http://twitter.com/dfwcard, blog us at http://merchantservices.cc, or visit our profile at linkedin.com/in/jonperry or http://linkedin.com/in/vanessalang . end of article

Jon Perry and Vanessa Lang are the owners of 888QuikRate.com, an ISO based in Ft. Worth, Texas, that was named Small Business of the Year by the local newspaper, The Star Telegram. In addition to the Twitter, LinkedIn and blog contact information provided in this article, you can reach Jon and Vanessa by phone at 817-857-3557 or by e-mail at jon.perry@888quikrate.com or vanessa.lang@888quikrate.com.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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