vicki

jayeff - I second that!

Brad - my thoughts exactly, lets see who has the balls to admit it.

Lets not forget those with their own merchant accounts, we all know some of them are doing the same da*n thing


Just a thought Boss, the thread started out as 'what would happen if cross selling were to go away', with so many of us agreeing the industry would do better without it, maybe we should discuss what we can do to MAKE em go away lol

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jayeff

Brad & Steve:

It really never occurred to me that there might actually be a compelling reason - beyond making a few more quick bucks - to do something like cross-selling. But your explanations of the reality of coping with chargebacks seem entirely logical and that your posts have stood unchallenged for several hours tends to attest to their validity.

Yet in a way it would be less worrying if we were only jerking the surfer around because we could. Then - whether through choice or necessity - we would be able to stop and there would be relatively little fall-out.

What you are describing basically suggests that a lot of the major players in our industry have a business model with all the stability of a house of cards. They appear to have taken what might not be an unreasonable short-term response to the problem of chargebacks and turned it into a long-term way of doing business.

The very obvious problem is that the whole thing depends on being able at the very least to sustain turnover at a constant level. That is so clearly an impossible condition that you have to wonder who in their right minds would commit themselves to it.

As you said, it is possible to wind back, but the process can only be a slow one: perhaps with a serious, sustained effort, 3-5 years for a very big operation that had previously pushed the envelope? But with the attention we are already getting from the FTC, Visa, Uncle Tom Cobley and all, will they have that long? I seriously doubt it.

And are there any real signs that more than - perhaps - one or two operators that have gone this route are even attempting to redress the situation? Perhaps in response to this, ARS have improved their member areas recently. I have no idea if that is behind the improvements, but in any case generally we are still seeing ever more extravagant payouts and more "imaginative" ways to part the surfers from their cash. I seriously doubt if most of this is very productive any more, but even if I am wrong about that, it can only be making the underlying situation worse.

If the worst that was going to happen was that a few companies were going to have to pay fines to their card processors or whoever, no big deal. They would either pay or go under and the rest of us could change a few links and carry on pretty much as usual.

But at least to judge by the public face of how they conduct business, these "few companies" are actually the majority of our biggest operators. That not only means a major impact if they are punished individually, but it increases the probability - as was the case with the introduction of Visa's fees - of collective punishment. Either way we have some hard times looming within the next couple of years.

By all means someone knock me down and tell me I'm being too pessimistic. Otherwise it seems to me that even switching to "straight" sponsors isn't going to provide more than minimal protection.

MegaPussy

FM certainly said a mouthful.

I like Epoch because they're the closest thing to using your own merchant account, which I do on non-adult projects. Do I think that 50% or more of the people using cross sells are abusing them? Yep. My program doesn't get many chargebacks or credits, but that goes back into the whole CONTENT issue. We make a strong effort to provide maximum value, most sites I have seen don't. I know at least 1 guy who runs a program almost entirely on ezclick revenue. If he lost those he would immediately go out of business and owe tens of thousands in affiliate payouts.

The sad fact is that the large majority of the new programs with high PPS payouts require ezclicks and cancelplus/memberplus/one-click mailers to subsist. Would I rather most of these programs were gone? Hell yes. As well-intentioned as they may be, basing a business model on other companies making you money as you retain 20% of your rebilling members is not exactly shrewd.

We play with billing options more than most I think, Epoch can tell you we have literally hundreds of different codes. I think if I had better and longer-term numbers I'd gladly disclose some of our findings to other program owners, so far it's still in beta phase however. You don't need $2.99 trials to turn a reasonable profit on a PPS, from my experience.

If they eliminated rebilling I'd close up shop tomorrow (or go into PPV, but I'm not optimistic on the wallet systems making the same margins), but cross sells we can definitely live without. It's just nice extra income in our pockets at the moment. That includes a PPS model, since we do run both at this time.

- Titus

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Theo

That's a great thread i followed the last days. Many interesting thoughts and opinions.

I believe that cross sales do have place in the industry, but they need to be closely monitored.

Now we have webmasters that opened paysites having as primary scope to benefit from the cross sales. Their empty members request the same or higher price than the majority of the top paysites around. Free market yes, but do not expect many surfers to keep joining empty paysites that will pass them 100s dollars in cross sales of other empty paysites.

Additionally, we have sponsor models with 1-3 free or paid days trial and $140 value of cross sales. There's no way to convenience me this model doesn't hurt the industry.

Brad Mitchell

Humm... all the people that were posting yesterday dissapeared?

Brad

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Probono

\

Unfortunately there is little that anyone can say to justify commiting fraud on the buying public. Equally unfortunate is that those who do run an honest business will fall with all the frauds when the house of cards does collapse.

JohnIP

While I don?t have any personal Dogs in this thread..Lord Knows we are doin GREAT business with Hawg and have done Business with Serge and in some cases Ron for years, there?s a few points to be made .First respect can be doled out to all generations of Online Porn lords with measured success. Ron has been doin well in it for YEARS, Serge did it in the earlier stages when marketing was shall we say a Russian tea party;)and Hawg and his crew do great today, check Alexa stats lately, the man?s kicked some serious ASS this year.

Cross sells are just the latest abused ?Flavor of the day? in an incredible competitive biz market. One of the most competitive you?ll find in ANY environment. As we have in the past 7 years, seems like 7 century?s sometimes, some in the industry will ?burn out? and abuse these ?opportunities? until something clamps down on them?Government?.Banks..what ever. Then this industry will find continued adaptive innovation to survive and grow.. its being done now and we have done it for years, but there is a growing difference.

And Dianna Vesta?s earlier points are well taken. There?s only so many times you can market shit in a box before it comes back to bite ya?.the walls are closing, which in the end is a GOOD THING, regulation and more definitive guidelines will help the industry mature, reduce competition, increase stability and supplement a quality product. EVERY BUSINESS in the history of the world has gone though this kind of cycle. Those with long term strategies that include diverse revenue streams based on direct marketing with the bandwidth to adapt to price product AND sales compensation appropriately will end up on top. Include in that the ability to anticipate and take advantage of overdue technological changes.

In the end at some critical point it will no longer be whose the best snake oil salesman, a maturing regulated industry will demand that, actually giving a customer the appropriate value of the product they purchased HAS to eventually win the day its basic to any long term healthy business

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TheDoc

The adult industry is really no different than the non-adult industry. Both do things that work well but could be used by the wrong people the wrong way.

Cross Sales can be removed and the $35-$40 program would still earn money. $15 is what the average cross sale is worth.

It produces an e-mail from the paying company.

Only 10%-15% of the people take the first set of cross sales if the box is unchecked. Another 10%-15% in "other" areas, which most people do not do.

Cross Sale charge backs are only a little higher than the normal paysite with trials. It is however a rather large difference from full month sign-ups.

Refunds are tad higher though..

Cross Sales wont be the end all to the business, they should be watched a little closer though and used with extreme regulation in my eyes.. They aren?t a bad thing though.

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fantasyman

CECash went through a 2 year FTC investigation. The only wrong doing found was something DMR did. It was only for a month at the beginning of the investigation. Thank goodness for that, because after that month, DMR stiffed us and went out of business. We found our own solution and the wrong doing stopped. The fact remains that the FTC had no interest in the billing company, it was our responsibility, the paysite. They said you're businessmen, you're over 21, you lawyers and contracts, so don't tell us you didn't know what the billing company was doing.

You folks out there can live behind those rose colored glasses all you want. But the FTC will go after the paysites, not the billing companies, you can take that to the bank.

Serge_Oprano

Ron has been doin well in it for YEARS, Serge did it in the earlier stages when marketing was shall we say a Russian tea party;)and Hawg and his crew do great today, check Alexa stats lately, the man?s kicked some serious ASS this year.

******************************************

JohnIP,
I checked boss's stats..
http://traffic.alexa.com/graph?w=640...source.com/&u=
from #60,000 in Jan 2003 to #80,000 at present,
where is the beef you see?
I see nada
;-)))

as for "Serge's Tea Party",
you were at lunch with me when Oprano was born less than 2 years ago,
with less than $4000 investment from PREPAID advertising (yours included, no out of pocket expences) and ZERO expereince in running webmaster chat boards and NO paysite behind it, from scratch.

you'll be pleased to know that it netted it's FIRST million net in May....

my calculator is broken,
can you calculate ROI for me?
;-))))

...and I NEVER had so much fun as MikeAI and me working together.

boss avoided piss with me for a reason,
he saved himself an embarassment,
being beated by old russian quaraplegic is not much fun
;-))))))

JohnIP

Serge my Ol bud I knew that might bring ya out;)..BTW folks... the first biz Serge and i did was on the original blurr concept....a Serge idea I believe.

Serge we do Alex peeks on alot of things to get a yard stick..I realize its NOT wholly accurate but it does give a sense of bandwidth at least;)....and Hawg is right up there with the big boys;)

Btw we didnt just talk in that lunch over webmaster board concept..I SOLD YA on the idea of you doin it. if I remember right..I have witnesses;) (You dont want Sammi to play the tape do ya);) Still waiting for the commision check;).

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Serge_Oprano

John,
let the truth be know..
I was a NEWB and NOBODY opened up my eyes in running board business than you did.
The advice and the lesson in psychology you gave me played MAJOR role in Oprano's $$$ success.

as a token of our appreciation,
I'll have your button for a month ABSOLUTELLY free,
send it over to [email protected]
[email protected] and me with URL and I'll make sure it's there on the July 1st.

do I know how to pay and ACKNOWLEDGE my debts?
;-)))

JohnIP

Ok..I just wanted credit for your renewed and profitable role in the webmaster resource community;)

Dude you gave us a great deal out of the box with Oprano in the begining..dont need commisions bonus...but thanks;)

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BossHawg

Serge...You bore me. You know you are grabbing at straws when you have to bring up the Alexa stats I think you forgot to mention my newbie board does more posts than Oprano does.... Business is as good as ever over here as can attest any company who we do business with.

JohnIP...Thanks for the shout outs and it has been a pleasure doing business with you and your crew. I will see what we can do on our end to up our traffic heading your way. BTW Bobby and Magick are a pleasure to deal with!

On the cross sale topic I dont have much more to add. I pretty much said what I had to earlier...

Carrie

I'm curious as to what brought up the thought that cross-sells might be going away? Is this just an extreme hypothetical or is there some basis for it?

Everywhere I look there are cross-sells, and I don't see them going anywhere - now or even in the far future.
But I think we need to make a clear distinction between cross-sells and forced cross-sells... meaning pre-checked boxes. I can see forced cross-sells going away.

Mainstream - everytime I get a name at GoDaddy.com I've got about ten cross-sells coming at me for hosting, email services, private domain protection, blah blah blah. Then I click past that and I get yet another two cross-sells offering me a pop-up blocker and another program - a traffic generator "get your site in the engines" kind of thing I think.
When you're registering domains regularly it does get annoying, but do I mind it? Nope.
If I noticed those boxes were ever pre-checked I'd be gone in a heartbeat, never to return. And even though I've been doing business with GoDaddy for a long time now and I know those boxes aren't going to be checked, I still look and make sure.

Amazon, Buy.com, all of the mainstream online sites I deal with - same thing. Cross-sells left and right.
Offline, even. I get to the counter at Best-Buy with my purchase and they're offering me additional insurance for nearly everything in my hands except perhaps the batteries.
7-11. I go in to get my cigarettes and piled around the cash register there's tons of little things for just a buck or two.
Just think of the aisles at Wal-Mart. All of those shelves filled with useless, cheap goodies - things you didn't know you needed until you saw them - to stare at while you're waiting to hand over your money.
Offline they call these upsells, but they're really the same thing as what we're discussing here - cross-sells. (In online terms upsell has a totally different meaning.)

It's not just the adult market using cross-sells, and the mainstream market is using it at a much more feverish and aggressive manner than adult has ever dared to do. But they're not forcing it, and that's the main issue.
Cross-sells will never go away (especially with so many large sites using it in an honest, non-forced way), but forced cross-sells just might. I'd love to see it.

As for what would happen if forced cross-sells went away? Many programs would fold. Payouts would drop sharply. The guys who are in it for the quick buck would hopefully leave - cuz $15 sure doesn't look as nice as $35 or $50. Trials would be gone on credit card instant access joins (may still be offered on check joins with "you'll get access once your check clears" delayed joins). Revshare would see a huge resurgence.

Bring it on, baby. I'd love to see it happen. Clean this place up a bit and yank those ugly weeds out of our yard making the rest of the industry look so bad.

Porn Mickey

Hey BossHawg, check my sig

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Serge_Oprano

bullshit and you know it...

I am not boring you, you are boring yourself 1/2 to death with your personality of ameoba
;-)))

optikalz

This question is so relevant lately given the new Visa rules re 1% CB threshold. I'd like to hear other webmasters' strategies re meeting the 1% threshold and STILL make money off cross sells.