What's the latest with chargebacks and who is making the money? Why do I see an increased amount of already refunded transactions being charged back and also seeing the actual refund being charged back. Who's making this etra money?

Bank, gateway, or both?

458 or G Wagon?

Great question. I've never been privileged to that information. I think it's safe to say people that buy online now are far more educated on their rights to a refund or chargeback than they were 5 or 10 years ago.

I'm not talking about the customer, I'm talking about the merchant.

And I know you are interested in billing so hence my question... why the sudden increase in chargebacks?

Understood. To be honest we never experienced a random increase in chargebacks. We had increases that we couldn't understand at the time but after some digging we always found the true cause. In most cases it was affiliate fraud. In one case we got slammed so hard. I remember a day where sales were abnormally high and all of it was without an affiliate id. I can only assume someone was attacking us in the form of fraudulent sales. We were proactive and worked with our billers to identify which sales looked legit and which were suspicious. We immediately refunded and cancelled all the suspicious ones. I believe it was well over 100 sales we canceled that day. Not fun but definitely saved us a big problem down the road.

That's interesting! Why would anyone attack you with fraudulent sales?

Hackers like to fuck with people just to fuck with people. Most major paysites get a variety of hacker attacks because they are paysites. Hackers that go after paysites seem to just get off on being the small guy going after the perceived big guy.

Also, I was always very vocal against the very aggressive operators in the business. It wouldn't surprise me if at some point I pissed one of them off bad enough they decided to throw a ton of shit our way to mess with us.

Hypothetical:

A competitor could obtain 1000's of cc numbers and signup to twisty's in an attempt to make chargeback ratio so high that visa/mastercard intervenes and shuts down the operation.

It would likely cost around 300K+ to successfully achieve this goal but it is doable.

I see a "HUGE" dis-organization in current adult billing operations. I can think about 10 things off the top of my head that would take this industry by storm and likely be worth millions, likely more.

Would love to hear your thoughts :)

Hey Shap, great to read all your responses in this thread and all the other business threads you have contributed to - fantastic chance to learn from a talented business man!

I have a question for you, that would be interesting to hear from your perspective as a previous site owner.

Are discounted membership prices an advantage for the affiliate? Obviously many factors can affect this, but I am talking overall and of course in our specific case as a review site owner.

I have been struggling to collect some solid data for this, since many factors can vary. But intuitively it would seem like a bad deal for the affiliate if we're talking revshare, unless the member stays a member for considerably longer than normal. Especially if the surfer would be likely to sign up anyway regardless of the price. It seems like a continuous downward spiral only to compete on price.

And a follow-up question: Did price point become a more important factor for Twistys etc. over the years?

Great Question! And Great to see you here!

I don't have any hard data on this but I think long term competing on price when nothing else changes is not the best strategy. What I mean when nothing else changes is the exact same product being offered at a different price. It would be one thing to offer your review site surfers a heavily discounted price for the past 30 days of updates and then an upgrade to get the entire site. I can see value in doing that. But simply offering a lower price to some affiliates and higher to others just to drive more members is a slippery slope to go down. We did it a little and I can't say there was much of a benefit to it. I will say for the review site there is probably a benefit. If you offer a price that is not available on Twistys.com and is lower than the listed price then surfers may learn they have to signup via your site to get the best price.

I tend to prefer keeping the monthly rate the same but heavily discounting long term members. 6 month and 12 month memberships. We always priced them a tad higher than what our average member was worth to us. So for Twistys each signup was worth $75 to us. That is to say every if we had 1000 joins those joins, would over the lifetime of them, bring in $75,000 revenue for Twistys. So knowing that we priced our 12 month offerings accordingly. I believe we had the at $99 for the year and would mail out an offer of $75 for a yearly membership. While $75/year is far less monthly than $24.95/month it still made sure that we were maintaining our average of $75 per member.

Let me know if that makes sense.

Your second question did price become an important factor? No it did not. We played around with price a lot and found every time our monthly price was below $24.95 we made less money. $24.95 and up was the magic range. I would say for us $24.95 to $27.95 was the sweet spot.

Thanks for the replies :thumbsup Very interesting insight and definitely has made me reconsider our way of using discounts.

It does indeed make sense that unless one of your trademarks is to offer discounts, they make most sense if you do them for a limited period, like a summer discount. And would probably work well for a limited area of the page as a sort of preview, like you mention.

Agreed! As a free site being the go to guy for deals isn't a bad thing. It sucks for the paysite to give up that power but hey you have to do what you can to make it worthwhile.

I distinctly remember us having a meeting to discuss the profitability of review sites that offered discounts. We decided to keep them mostly because of my relationship to the review site owners. My staff were always at me to cancel them all and they probably were right from a business point of view.

I've played around with price points this year and found Shap's results to be very similar to mine. Because I run a network with many, many paysites it's obviously different than a single mega-brand like Twistys but dropping prices to $19.95 led to less revenue and sales. Raising them to $39.96 resulted in less sales. So the 'sweet spot' for me and my operation continues to be $29.95 for a monthly recurring and $34.95 for a one-time. I only do a 3 month long-term option because I fear the chargebacks with yearly memberships. Maybe I should revisit that thinking...

(Thanks Shap for the idea of coordinating the yearly option with emails.)

I A-B tested these same exact price points 6 years ago, 4 years ago, 2 years ago and in March of this year. Same exact results every time. (So yeah, I'm done testing price points now. LOL)

Can you suggest me any more forums or other place where I can find adult seo link buyers, sellers webmasters?

Thanks

Sorry. I'm afraid I don't know of any besides GFY and Xbiz

If there is one thing I would really encourage you to do is try yearly memberships. Your chargebacks won't be higher because the volume on them isn't much. I may be wrong but I think Chargeback rate is based on # of transactions not the $$ amount right? So a $100 signup that charges back is the same as a $1 chargeback that charges back right? Maybe i'm wrong.

But regardless far less people chargeback $100 than they would a $1 charge. I think the reality is these are probably committed members. If you are worried about chargebacks start by offering it to ex members by email. 6 months at $75 and 12 months at $99. They are a qualified target market. Go after them and see the results. My guess is you will be thanking me :)

I am already thanking you Shap! :thumbsup

After reading your comments yesterday I will be offering yearly options next week. I am setting up Mail Chimp this weekend and will do my first mailing next week with the offer you suggested. :)

If you are at either the Amsterdam or Prague shows this year I will thank you in person. :)

:thumbsup:thumbsup

what are the most important items to have/implement if wanting to increase member values?
this question is asked from the perspective of a small to mid size pay site that has most items in line i.e. good unique video content, stable hosting and downloads , quality tours , decent ratios, tube channels etc..all the basic things for a stable pay site in 2015.

but with all that still can't seem to get to a point where media buys or higher pps works out.

we have been doing ok but want to scale and the next ways i see are with media buys and higher pps. of course we don't want to go the route of card banging or other aggressive billing.

and do you have any other suggestions for a mid size pay site to grow its brand these days.

Shoot missed this. Will get to it today

Just a heads up, MailChimp does not allow adult.

I want better questions, not better answers ...

This is one hell of a question. Well done.

What is your price/month and what is your average $$ per member right now? You may actually be doing better than you think :)

I?ve always been a big believer in the user experience. When Twistys first started it was nowhere near the best content, nowhere near the best site but our retention was up there with the best sites. Mainly because the user experience was great. Well designed members area that is easy to navigate, deep in depth and feels huge. It?s also important that the members think you care. That is a very hard thing to achieve but very important.

Once your design is optimized i think it?s key to look at every money making avenue that you are comfortable with. Selling within your members area. Emailing ex members. I?d research your competitors and see what they do and what you are comfortable with and DO IT! I made a big mistake. Left millions on the table for many years.

Your thoughts on the 2015 Aston Martin Vanquish?

I haven't seen it in person. I enjoyed my Vantage but wouldn't buy another. The driving experience just doesn't compare to the Porsche or Ferrari. The vanquish price point is too close to 458/488. No brainer imo Ferrari all day.

Agreed :thumbsup:thumbsup