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Author Topic: Bitcoin needs a marketeer  (Read 2891 times)
justusranvier
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December 29, 2011, 04:34:39 AM
 #21

Just my opinion - target small business owners who sell over the internet and are tired of PayPal's bullshit (that would be nearly all of them).

Emphasize the lack of chargebacks and lack of any central authority who can freeze your account for an indefinite time and arbitrary reason.

Services like bit-pay are ideal for merchants who just want an easy way to get paid without the hassles involved with PayPal and also don't want exchange rate exposure. Getting USD deposited into your bank account every business day with no chargeback risk and for a fee that's competitive with PayPal or a MasterCard/Visa merchant account is a really good deal for them.

Get the merchants on board and they will encourage their customers to follow.
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Phinnaeus Gage
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December 29, 2011, 05:36:00 AM
 #22

Just my opinion - target small business owners who sell over the internet and are tired of PayPal's bullshit (that would be nearly all of them).

Emphasize the lack of chargebacks and lack of any central authority who can freeze your account for an indefinite time and arbitrary reason.

Services like bit-pay are ideal for merchants who just want an easy way to get paid without the hassles involved with PayPal and also don't want exchange rate exposure. Getting USD deposited into your bank account every business day with no chargeback risk and for a fee that's competitive with PayPal or a MasterCard/Visa merchant account is a really good deal for them.

Get the merchants on board and they will encourage their customers to follow.

The only thing I would improve on that model is having a fee scheduled where the more BTC exchanged, the lower the cost, with the highest percentage ever a business pays is the lowest that PayPal charges.

Or consider this hypothetical scenario:

On a website, an Xbox 360 Console is priced at $278.50. At checkout, the buyer is presented with the traditional PayPal option and the Bitcoin option. With the Bitcoin option, the buyer notices an $8.08 savings (2.9%) if he opts for paying with bitcoins. He's even offered three choices of which he must click only one box that's next to those choices (box not show below for this example).

  • Take the $8.08 discard now.
  • Give me half and I'll apply the other half with my next purchase from your company.
  • I opt to use this instant rebate on my very next purchase, good for the next 10 years.

Now which one is the buyer more likely to click. I'm guessing the first box. And that buyer will jump through hoops at this stage of the purchase to get those coins into his wallet so that he can purchase this hot new game (I know it ain't new, but...).

The bigger the ticket item, the bigger the savings, the more apt a buyer will consider using Bitcoin.

The other end of the spectrum is in those smaller purchases and micro donations that have been discussed on this forum, e.g. the Indies (independent) market.

~Bruno~
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December 29, 2011, 05:51:37 AM
 #23

Or consider this hypothetical scenario:

On a website, an Xbox 360 Console is priced at $278.50. At checkout, the buyer is presented with the traditional PayPal option and the Bitcoin option. With the Bitcoin option, the buyer notices an $8.08 savings (2.9%) if he opts for paying with bitcoins. He's even offered three choices of which he must click only one box that's next to those choices (box not show below for this example).

  • Take the $8.08 discard now.
  • Give me half and I'll apply the other half with my next purchase from your company.
  • I opt to use this instant rebate on my very next purchase, good for the next 10 years.
I don't see that as a bad idea. I'm not sure how many merchants would bother though.

I just want to emphasize that it's in the best interest of people who want Bitcoin to succeed as a currency (rather than those who just want to make themselves rich via speculation) to focus on the needs of merchants and customers because in the end the value of Bitcoin as a means of exchange trumps everything else.

Merchants want to make it as easy as risk-free to sell their products as possible. They generally don't care about toppling the international banking cartel.

When people talk to me about Bitcoins I explain to them why it can be beneficial for selling things over the internet and encourage them to convert any Bitcoins they receive immediately to local currency. I don't want people who are dipping their tow in the water getting burned by exchange rate fluctuations.

I think that's what Bitcoin needs to be right now: a high-velocity online means of exchange that is superior to PayPal. If that keeps the exchange rate low in the short to intermediate term then so be it. If Bitcoin makes life easier for buyers and sellers of real products and services then its use will grow over time and eventually there will be enough of a real economy backing it up that it will make sense to start holding on to them.

Only then does it make sense to start talking about Bitcoin as a store of value.
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December 29, 2011, 06:12:45 AM
 #24

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I don't see that as a bad idea. I'm not sure how many merchants would bother though.

Probably only the merchants that desire to sell more product. As a buyer, I'm offered two sites to buy a certain product, both at the same price. But one does offer an extra payment option, one of which I would recognize an immediate 2.9% discount. I'm going with that one. The seller just got an extra sale, one where PayPal didn't get a cut. He's out $0 (or he gained $.30, the other part of that PayPal fee). He even has an opportunity to sell that same product to that buyer's friend(s) because not only does everybody love a bargain, but they love bragging about it, too.

If I had a formidable website which sells a variety of products, I would have a campaign outlining how the next 1,000 people who purchase from me, using Bitcoin as their sole payment option, will enjoy a 2.9% discount on everything I sell--for life. I suggest after you make your purchase, to tell your friends and family about this amazing offer. Only about 1,000 will be able to enjoy this offer, so hurry.

You know the beauty of the above? They'll have no idea if 108 or 7,339 people took me up on that offer. It costs me nothing and, in fact, I gain. I recognize the same exact profit margin as I did when I only accepted PayPal. But I'm selling more product. (forgive the tenses--not editing)

~Bruno~
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December 29, 2011, 06:18:24 AM
 #25

Does your calculation assume that the store is accepting Bitcoins "natively" without using one of the third-party services that immediately convert sales into USD? Because offering a 2.9% discount for Bitcoin is only a break even proposition for a merchant if the total fees involved with a Bitcoin sale, everything from when the customer clicks "pay" until USD (or applicable local currency) hit his bank account is 2.9% less than the total fees involved with the other methods of payments.
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December 29, 2011, 06:33:38 AM
 #26

Does your calculation assume that the store is accepting Bitcoins "natively" without using one of the third-party services that immediately convert sales into USD? Because offering a 2.9% discount for Bitcoin is only a break even proposition for a merchant if the total fees involved with a Bitcoin sale, everything from when the customer clicks "pay" until USD (or applicable local currency) hit his bank account is 2.9% less than the total fees involved with the other methods of payments.

A fair question. But I wasn't thinking about converting them at all, but using every single one of them on products and services I would normally purchase with fiat. I would still have dollars coming in via PayPal, cc, money orders, etc. That is until down the road when all my sales would be made with Bitcoin, as a myriad other companies worldwide would be.
justusranvier
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December 29, 2011, 06:41:34 AM
 #27

A fair question. But I wasn't thinking about converting them at all, but using every single one of them on products and services I would normally purchase with fiat. I would still have dollars coming in via PayPal, cc, money orders, etc. That is until down the road when all my sales would be made with Bitcoin, as a myriad other companies worldwide would be.
I understand that attitude and in the long term that's where we want people to go but first you need to consider a different type of merchant.

The economy is bad right now. Margins are thin and many businesses are struggling. There are a lot of business out there that are barely hanging on and for whom a chargeback or a freeze on their PayPal account while they investigate a complaint could be devastating or even fatal.

If you start talking to those people about alternative currencies they will tune you out because they have neither the time nor the resources to investigate.

On the other hand if you talk to them about a more reliable way to get USD into their bank accounts suddenly they will be all ears.

Get those people onboard and give them a reason to prefer Bitcoin over debit/credit card or Paypal and they will have the necessary incentive to get more of their customers shopping with Bitcoin. When their own suppliers start pestering them to use Bitcoin then you'll see more of them holding on to them for B2B transactions.
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December 29, 2011, 06:42:28 AM
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On a website, an Xbox 360 Console is priced at $278.50. At checkout, the buyer is presented with the traditional PayPal option and the Bitcoin option. With the Bitcoin option, the buyer notices an $8.08 savings (2.9%) if he opts for paying with bitcoins. He's even offered three choices of which he must click only one box that's next to those choices (box not show below for this example).

  • Take the $8.08 discard now.
  • Give me half and I'll apply the other half with my next purchase from your company.
  • I opt to use this instant rebate on my very next purchase, good for the next 10 years.

Now which one is the buyer more likely to click. I'm guessing the first box. And that buyer will jump through hoops at this stage of the purchase to get those coins into his wallet so that he can purchase this hot new game (I know it ain't new, but...).


In a thread about marketing bitcoin... this kind of user experience is not marketable. Who wants to make one of three choices at a checkout?! Most people just want to buy their shit.

Better marketing for bitcoin in this case would be 'buy with paypal' button next to 'buy with bitcoin' button and both are equally easy to use. That would be marketable. I reckon people would be more tempted to use bitcoin if that were the case. Offering a complex set of discount options is not what people want at the checkout and only heightens the 'bitcoin is complex' image.
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December 29, 2011, 06:48:26 AM
 #29

The cost savings for a business on a per-transaction basis will not be a huge selling point.  Plus they may have up-front costs associated with integrating and debugging a new payment system, whether they use a package like ours, hire someone to do it for them, or futz around with it themselves.  It will take time and money to get it working.  So saving money is probably the weaker argument for a typical business.  

The bigger benefits are

- no hidden fees
- no chargeback risk

Now if your selling point is "lower fees" then a better market to go after is Remittance.  This is where people pay outrageous fees.

Try sending $200 by Western Union from the US to someone in Mexico.  The fees can be as much as 20%.  Bitcoin can be one tenth the fees.   if one guy in the Mexican village will act as a local bitcoin dealer, then we can put Western Union out of business pretty quickly.

What we need are more individuals (like us) stepping up to be local bitcoin-for-cash dealers in each community.  Or getting all these "cash for gold' places that are popping up on every corner to add "cash for bitcoins" to their menu.  that would be better, as they already have an established retail location with staff.  just give them another product to sell.




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justusranvier
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December 29, 2011, 06:58:18 AM
 #30

The bigger benefits are

- no hidden fees
- no chargeback risk

Now a better market to go after first is Remittance.  This is where people pay outrageous fees.

Try sending $200 by Western Union from the US to someone in Mexico.  The fees can be as much as 20%.  Bitcoin can be one tenth the fees.   if one guy in the Mexican village will act as a local bitcoin dealer, then we can put Western Union out of business pretty quickly.

What we need are more individuals (like us) stepping up to be local bitcoin-for-cash dealers in each community.  Or getting all these "cash for gold' places that are popping up on every corner to add "cash for bitcoins" to their menu.  that would be better, as they already have an established retail location with staff.  just give them another product to sell.
I agree but you don't need "cash for bitcoins" people in the developed countries - you need to set those up in the developing countries.

I have a small amount of personal experience in this matter. I am a US citizen that was married to a Perivuan for several years and we sent remittances back to her family frequently. You're absolutely correct that it's very expensive and inconvenient.

Now that you can make deposits to the exchanges via cash to the branches of major banks it's very easy for someone in the US to get their hands on Bitcoins to send back home. The far larger problem is enabling people in the developing countries to convert those Bitcoins to local currency.

That means partnering with locals and setting up brick and mortar currency exchanges in a lot of different developing world locations. I've got some ideas for how one of those would work and I've considered working with some of my former inlaws but it's certainly not an simple undertaking.
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December 29, 2011, 07:04:02 AM
 #31

Another thing to consider is that if a business has a presence in the US and in Mexico and is involved in moving money from one to the other it's going to become entangled in the laws that make those other services so expensive.

I would never start a business in the US that had anything to do with remittances. Let people who want to send Bitcoins obtain those Bitcoins themselves and just be merely a currency exchange in the target country.
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December 29, 2011, 07:09:22 AM
 #32

Services like bit-pay are ideal for merchants who just want an easy way to get paid without the hassles involved with PayPal and also don't want exchange rate exposure.

Yes, but there's another hassle too that I didn't realize until just recently.  One business owner really liked bitcoins and wanted to accept them, but he said "my accountant will hate this, how is he supposed to record this?"

With Bit-Pay, the merchant does not have to see, hold, or possess the bitcoins, ever.  They report the gross USD amount of the sale, and expense our commission fees, just like they record revenue and commissions from Visa or MC.  

One thing that is perhaps overlooked about us, and I probably need to clarify this on the next site update:

Our fee is a fixed percentage of the gross order amount they transmit to us, and is not affected by the amount of bitcoins we actually collect, or what we are able to sell them for.

So if a merchant sends us an order for $10.00, they get exactly $9.70.  the amount of bitcoins we collect doesn't matter, and the proceeds we get from their sale doesn't matter.  the merchant has zero bitcoin risk.


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justusranvier
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December 29, 2011, 07:18:27 AM
 #33

Services like bit-pay are ideal for merchants who just want an easy way to get paid without the hassles involved with PayPal and also don't want exchange rate exposure.

Yes, but there's another hassle too that I didn't realize until just recently.  One business owner really liked bitcoins and wanted to accept them, but he said "my accountant will hate this, how is he supposed to record this?"

With Bit-Pay, the merchant does not have to see, hold, or possess the bitcoins, ever.  They report the gross USD amount of the sale, and expense our commission fees, just like they record revenue and commissions from Visa or MC.  

One thing that is perhaps overlooked about us, and I probably need to clarify this on the next site update:

Our fee is a fixed percentage of the gross order amount they transmit to us, and is not affected by the amount of bitcoins we actually collect, or what we are able to sell them for.

So if a merchant sends us an order for $10.00, they get exactly $9.70.  the amount of bitcoins we collect doesn't matter, and the proceeds we get from their sale doesn't matter.  the merchant has zero bitcoin risk.


I would certainly recommend advertising your service as a more reliable and hassle-free way for a merchant to turn sales into local currency in the bank. The fact that the underlying mechanism for doing so is decentralized crypto-currency is something that is not relevant to most businesses.

In fact, if it were my motto I'd make it:

Bit-Pay : Merchant Solutions for Small Businesses

Your customers are the businesses, not the Bitcoin movement. Bitcoin is not the reason your business exists, it's your competitive advantage. Really your customers don't even need to know how you are able to deliver payment processing that is faster, cheaper and more reliable than PayPal unless they're curious. All they need to know is that you can and do.
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December 29, 2011, 08:09:56 AM
 #34

Services like bit-pay are ideal for merchants who just want an easy way to get paid without the hassles involved with PayPal and also don't want exchange rate exposure.

Yes, but there's another hassle too that I didn't realize until just recently.  One business owner really liked bitcoins and wanted to accept them, but he said "my accountant will hate this, how is he supposed to record this?"

With Bit-Pay, the merchant does not have to see, hold, or possess the bitcoins, ever.  They report the gross USD amount of the sale, and expense our commission fees, just like they record revenue and commissions from Visa or MC.  

One thing that is perhaps overlooked about us, and I probably need to clarify this on the next site update:

Our fee is a fixed percentage of the gross order amount they transmit to us, and is not affected by the amount of bitcoins we actually collect, or what we are able to sell them for.

So if a merchant sends us an order for $10.00, they get exactly $9.70.  the amount of bitcoins we collect doesn't matter, and the proceeds we get from their sale doesn't matter.  the merchant has zero bitcoin risk.


I would certainly recommend advertising your service as a more reliable and hassle-free way for a merchant to turn sales into local currency in the bank. The fact that the underlying mechanism for doing so is decentralized crypto-currency is something that is not relevant to most businesses.

In fact, if it were my motto I'd make it:

Bit-Pay : Merchant Solutions for Small Businesses

Your customers are the businesses, not the Bitcoin movement. Bitcoin is not the reason your business exists, it's your competitive advantage. Really your customers don't even need to know how you are able to deliver payment processing that is faster, cheaper and more reliable than PayPal unless they're curious. All they need to know is that you can and do.

+1

On a website, an Xbox 360 Console is priced at $278.50. At checkout, the buyer is presented with the traditional PayPal option and the Bitcoin option. With the Bitcoin option, the buyer notices an $8.08 savings (2.9%) if he opts for paying with bitcoins. He's even offered three choices of which he must click only one box that's next to those choices (box not show below for this example).

  • Take the $8.08 discard now.
  • Give me half and I'll apply the other half with my next purchase from your company.
  • I opt to use this instant rebate on my very next purchase, good for the next 10 years.

Now which one is the buyer more likely to click. I'm guessing the first box. And that buyer will jump through hoops at this stage of the purchase to get those coins into his wallet so that he can purchase this hot new game (I know it ain't new, but...).


In a thread about marketing bitcoin... this kind of user experience is not marketable. Who wants to make one of three choices at a checkout?! Most people just want to buy their shit.

Better marketing for bitcoin in this case would be 'buy with paypal' button next to 'buy with bitcoin' button and both are equally easy to use. That would be marketable. I reckon people would be more tempted to use bitcoin if that were the case. Offering a complex set of discount options is not what people want at the checkout and only heightens the 'bitcoin is complex' image.

I'm going to hold my breath until I come up with a counter-argument. (this may be my last post)  Smiley

Quote
That means partnering with locals and setting up brick and mortar currency exchanges in a lot of different developing world locations. I've got some ideas for how one of those would work and I've considered working with some of my former inlaws but it's certainly not an simple undertaking.

Or as a Bitcoin Card sold at convenience stores near the register on its own stand with the caption "For Those Other Things in Life". (placed next to the Bic cigarette lighters)
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December 29, 2011, 08:16:31 AM
 #35

I went on Omegle recently to try and convince the average person there that Bitcoin was for them!


It failed horribly.

But I learned a couple things. Most of the people there don't hate Paypal. But Bitcoin is best explained (and most intriguing to them) by creating a parallel to Paypal.

I don't think Bitcoin will be ready for the masses until the clients are superior in terms of ease of use and platform support to Paypal itself.

We're not there yet. It'll be awhile.

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December 29, 2011, 08:25:48 AM
 #36

I went on Omegle recently to try and convince the average person there that Bitcoin was for them!


It failed horribly.

But I learned a couple things. Most of the people there don't hate Paypal.
The average person is a customer rather than a business owner. PayPal heavily favors buyers over sellers so naturally the average person isn't going to see the any of the problems. It's not very hard to find horror stories from the seller's point of view, however.

On the other hand please don't misinterpreting my previous posts as discounting the desirability of usability improvements for the average user. It is important but the necessary mindset for improving Bitcoin from the point of view of the merchants is slightly different.

It's really a case of two parallel and only partially overlapping efforts - one targeted at the users and another targeted at the business owners.
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December 29, 2011, 08:49:32 AM
 #37

I wonder how easy it would be for http://www.merchantplus.com/ to add Bitcoin as a payment option to their business model. I think there are a few more companies like this one as well.

Thoughts?

~Bruno~
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December 29, 2011, 03:39:45 PM
 #38

Get e-junkie or plimus to add bitcoin to their payment options and you might be into something Smiley

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December 29, 2011, 04:20:09 PM
 #39

The cost savings for a business on a per-transaction basis will not be a huge selling point.  Plus they may have up-front costs associated with integrating and debugging a new payment system, whether they use a package like ours, hire someone to do it for them, or futz around with it themselves.  It will take time and money to get it working.  So saving money is probably the weaker argument for a typical business.  

The bigger benefits are

- no hidden fees
- no chargeback risk

Now if your selling point is "lower fees" then a better market to go after is Remittance.  This is where people pay outrageous fees.

Try sending $200 by Western Union from the US to someone in Mexico.  The fees can be as much as 20%.  Bitcoin can be one tenth the fees.   if one guy in the Mexican village will act as a local bitcoin dealer, then we can put Western Union out of business pretty quickly.

What we need are more individuals (like us) stepping up to be local bitcoin-for-cash dealers in each community.  Or getting all these "cash for gold' places that are popping up on every corner to add "cash for bitcoins" to their menu.  that would be better, as they already have an established retail location with staff.  just give them another product to sell.





+1 i was thinking about this few days ago but i think i lack the experience atm to convince a gold buying office about bitcoin  Undecided

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December 29, 2011, 04:26:49 PM
 #40

i think i lack the experience atm to convince a gold buying office about bitcoin  Undecided

The office doesn't need to have a long or short position, or assume any risk.  Think of them as just a retail outlet for bitcoin exchange.  They trade wholesale on the exchange for 0.5% and charge the customer 6-10x that much.

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