Apple announced that it will be configuring the iPhone to be competitive with the Blackberry , Palm Trio and Windows Mobile devises. In his blog Gadget Hound, Ben Patterson talks about all of the feature updates that will be in the next iPhone software update (sometime in June).

Now the truth is that I love my ipodTouch 16Gig. Why don’t I have an iPhone you might ask? Because my home area is not serviced by AT&T. We have wonderful coverage through Verizon. Would I migrate immediately to the iPhone if I could? Absolutely. It still boggles my mind that Apple will expend time and energy to configure the iPhone to compete with Blackberry and other smart phones but limit access to one network. I realize there are differences in the networks but Blackberry has solved this while Apple is tied to the hip of AT&T.

Apple is in the devise business and the more customers that adopt their excellent and intelligent devises the better. Here I think Apple lost focus and was lured by the initial money that AT&T paid for the exclusive. I’m sure the money was enticing but I’m equally sure that the sales of the iPhone would have already exceeded the money paid by AT&T if it was available on more networks.

Maybe Apple could solve this issue or at least let us know when the exclusive expires and how they plan to deal with other networks in the future before trying to compete with Blackberry.

Floyd Norris, the chief financial correspondent of The New York Times and The International Herald Tribune writes about the financial implications of the Visa public offering on his blog Notions On High and Low Finance. It is apparent from his analysis that the big winners in this offering are the beleaguered banks. This public offering is shaping up to be a veiled bank bail-out by the private sector and to provide cash to protect Visa member banks from financial harm due to antitrust violations. Mr. Norris wonders, rightfully so, about the lack of funds that will remain to grow the company and the complex structure of the offering. (Visa Prospectus)

But if that is actually the case is it such a bad thing? Visa has the revenue to sustain itself and grow without going public. Bailing out banks through a stock offering where investors have a chance of benefiting over time is certainly preferable to a government bailout.

What is important about the Visa public offering is what is not being said. No reference is being made to changing the current interchange structure in the US. There won’t be any talk of this either since the banks that are being funded through this offering and Visa themselves greatly benefit from the interchange structure. But this system is grossly unfair to small and mid-sized merchants and completely unjustifiable given the cost of money in our current system. While a case can be made that converting purchases from cash to plastic reduces employee theft in a store, the same case can be made in other countries where the cost of accepting credit cards is much less than in the US.

Whether we like it or not we are paying more for consumer goods at the point-of-sale due to arbitrarily high interchange rates. The business owner must account for the cost of the item and the cost of the ring. The cost of ring (credit card rate) must be added to the cost of the wholesale price of the item purchased for resale. For example: An item which costs the business $60.00 is sold for $100.00 for a profit of $40.00. If the purchase is made with a credit card the cost of the item goes up an average of $2.00 for the retailer. While this doesn’t seem like much for the convenience consider that the 2.00% on average that a retailer pays to accept credit cards is actually costing him/her 3.33% of the cost of the wholesale price. This means that in order to make the same amount of profit the retailer must charge about $103.33 to realize the same profit margin. Who pays for this - the consumer does. This example does not take into account businesses that work on a much lower margin to be competitive in their industry like grocery stores.

The credit card companies have done an excellent job of marketing convenience to the US consumer and the truth is we want convenience. But realize that we are also footing the bill for this convenience every time we make a purchase with the direct benefit going to those poor downtrodden banks and credit card companies.

Small businesses and start-ups can develop a deceptive dark side that can have serious negative impacts on long-term success. In his book “Good To Great” Jim Collins states that the companies that achieved “greatness” not only learned what to do, but more importantly they learned what not to do. This seems intuitive at first. But putting it into practice is much more difficult and requires a good deal of corporate discipline.

Every business owner starts with an idea or a dream. They are so convinced that a certain group of customers will appreciate their product that they venture into the entrepreneurial abyss without ever looking back. They go without food, sleep and pay to see their dream mature. They work tirelessly to make sure that their product succeeds and that the company grows revenue. Along the way however, quite innocently, unintentionally, and without realizing it, they lose focus. They fall into the trap of trying to be everything to everyone because they think they have to for their business to grow.

Trying to be everything to everyone means that your core (target) customer does not get the attention to detail, service level and/or quality that was originally intended. Chasing the requirements of a potential client that fall outside of the identified target market means that a business must dedicate time, money and resources to “win” the new client. The attention and resources of the business get diverted to this “new” client and away from the target customers. Pretty soon the business is fragmented, has too many services or products to manage and begins to decline because they really don’t do anything well anymore. It is essential to the growth and survival of any business that they focus on being the best product or service to a specific customer. This means that sometimes it is necessary (and difficult) to say “no” to a sales person and or potential customer. Turning down business goes against the grain of any entrepreneur but knowing when to say “no” is a vital tool for any business.

Consider the simple case of Linda Katz. She sells tumbleweeds. What started out as a web building exercise has turned into a healthy, focused business. Her business has been written about in magazines such as Business Week! She sells only tumbleweeds to people that need tumbleweeds. She is focused. She has three prices and one product - tumbleweeds - and worldwide recognition. Do tumbleweeds appeal to everyone. No, but they do appeal to clients like NASA, Hollywood, decorators and others that find themselves in need of a tumbleweed.

Consider also the case of In-N-Out Burger. They have only one product line - a hamburger, fries and a drink. The menu seems too simple in an age where customer choice is the mantra. Surely customers have suggested, salads, deserts, fish sandwiches, chicken sandwiches, those nugget things, etc. But sixty years and 140 stores later they still serve only a hamburger, fresh cut fries and a drink. However, they serve the best hamburger, fries and drink you have ever tasted. Those “other” burger joints don’t even come close. They do not franchise, are not going public and they are only in 3 states. Now that’s focus!

The bottom line is this: A business can’t be everything to everyone. But it can become the best to a core group of customers that appreciate what the business offers and the value it brings them. By really understanding who this customer is and what they need the business grows its customer base and profits and begins the journey that takes it from good to great.

GotoBilling—–A Payment processing application for small to mid size businesses

What Company Is Offering:
It is a payment processing application for small to mid size businesses.  It includes payments, CRM, invoicing, marketing and gift cards making it easy for your customers to pay you online while boosting loyalty and retention.  Allowing customers to pay you directly from your web site provides them with easy access to pay you on time, every time. More

Krishna Kumar, author of the very informative Thought Clusters blog has written a review of the GoToBilling on-demand application. Thought Clusters is a blog that does a great job at providing information about business products and services.

It is gratifying to read about your product in independent reviews and we take the comments and criticism seriously since these reviews are unsolicited and can reflect frustrations that users have but simply don’t tell us.

Krishna brings up two points of interest that we will work on improving.

First, is the issue of adding additional screen shots along with the video tutorial to give the prospective user with a more complete view of the additional features in each module. We will work on improving this area in the next few weeks.

Second, is the observation that the blog content is, shall we say, thin. This is a valid criticism! We really need to do a better job at maintaining our blog. The blog is new and our intention is to post content that helps businesses make better decisions when it comes to business payment and operational related issues. So, twenty lashes with a wet noodle, and we’ll start working feverishly to provide our readers with valuable content. Stay tuned.

Lee Conrad writes for Bank Technology News in an article titled “Payments: En Garde! The Clash of Banks, PayPal” that banks are being systematically pushed out of the payment market by innovators such as PayPal and GoToBilling. This is not only true but happening with great speed as banks continue to grope for solutions that will increase customer loyalty. The main problem that banks have is that they are stuck in the past and don’t recognize that their depository customers have become more sophisticated and technically savvy.

The banking industry has focused on the wrong things. Their focus has been on providing services that keep the depositor out of the bank. That’s why every bank pushes online banking and even some are moving to remote deposit. But what banks fail to realize is that their customers are looking for whole solutions that help them build their business. A business is not a collection of parts. It is an organically growing entity. The banking industry has approached business customers with an eye on one thing only - reducing the bank’s operating cost at the branch level while insisting that these changes are because they want to be more responsive to business customer needs. The feel good marketing put out by banks lacks substance and is disingenuous at best.

By the time that banks figure out that their customers are leaving and moving their business to third party providers like GoToBilling it will be too late. Banks have left an huge void in their service offerings by focusing on the wrong things and nature abhors a vacuum. This void is being filled by responsive technology companies that understand business needs better than banks. Why is this true? Because the technology companies are customers too and they understand what it takes to efficiently build and run a business.

Bankers have forgotten that business is dynamic not static. They have remained behind their desk in their plush offices and have no understanding of the needs of their business customers. (When is the last time your banker visited your business and spent time with you trying to understand YOUR business?) They have focused on deposits in their bank while neglecting systems and services designed to get the deposit to the bank. Every commercial depositor of the bank has unique needs. Where they bank is only a small part of the overall need.

Banks have no one to blame but themselves for the loss of their commercial depositors to third party providers. Being loyal to the past and reactionary to the future have insured that banks are seriously behind the demands of their business depositors and it is very unlikely that they can catch up. There is an old saying; “Some make things happen, some watch what happens, some look back and wonder what happened.” Banks are in the latter category.

In a recent article in the Ashville Citizen-Times, author John Boyle writes about the real cost of accepting credit cards for a typical business. This topic is an easy target for a journalist that needs to fill a page with content. But as usual, the research was surface and the only real merchants interviewed agreed with the journalist’s opinion.

It’s no shocker that merchants pay a fee for accepting credit cards. In some cases it is even possible for a retailer to lose money on a sale given the sale price and the retailer’s margin. But let’s look at some issues on the other side of the coin.

It is a well known fact that credit card acceptance increases business 30 - 50%. The restaurant cited in the article that accepts only cash and states “it has been working for 18 years” is either short sighted or is satisfied with his current client base and income levels. This is not the case for most businesses. Credit card purchases are driven by the consumer and businesses respond by accepting the cards. Personally, and I don’t care how good the food is, I am not eating at a restaurant that accepts only cash. I simply don’t want to take the time to figure out how much cash I’ll need to eat dinner.

Think of how much add-on business this merchant is losing. If I have $20.00 in my pocket, I can only spend up to that amount with him. However, if he accepted credit cards, I could order on impulse (higher priced menu items) and maybe even add desert! Sales he will not have in a cash only environment.

Credit card transactions reduce internal theft of cash. A “cash only” business must be concerned with cash controls. When you have cash floating around the losses due to employee theft is, on average, higher than if all of the sales had been taken with a credit card. This has been well documented over the years and is not disputed among serious retailers.

Consumers want to use their credit cards. A business that does not accept credit cards is saying to his customer “shop with me, pay me on my terms, I don’t care how YOU want to pay.” The fact is I am a consumer. I enjoy the convenience of paying with credit cards and I enjoy having detailed reports of my spending that I don’t get with cash. In addition, some of my credit cards come with sky miles. I want those miles!

Web business would be impossible without credit cards. There is no other way to facilitate a sale between two parties on the web unless the sale is consummated with an electronic payment. Enough said on this point.

While we can argue about whether the credit society in which we live is a good thing or not, it remains that to build a successful business electronic payment acceptance is here to stay and is a better commercial system than cash.

We have stumbled onto a really neat search tool that makes searching the web more efficient. The search engine is www.searchguy.com. What makes this site user friendly is that you can search keywords just like in Google and it will give you the Google results.

But the nice part is this; click the icon for Yahoo, ASK, MSM and AOL and poof - the search results for these come up just as they would if you typed directly into each individual search engine.

A real time saver and a more complete search tool. We really like this one. Try it out for yourself by clicking the link here www.searchguy.com.

One really cool thing is that if you advertise on searchguy.com you are attracting potential customers that have been limited to a single browser thereby stretching your advertisement budget.

Try it out and have fun!

The Deloitte Center for Banking Solutions recently published a new paper titled “Is the Retail Payment Industry Headed For Disruption?” Their findings indicate that not only is the retail payment industry headed for disruption it is coming at us like a freight train. Long held traditions and methods are still the norm in the payment industry while everything around the industry is changing. It is a case of what authors W. Chan Kim and Renee Mauborgne in their book “Blue Ocean Strategy” call red ocean thinking. Red ocean thinking is contained within the box set forth by current players, past players and new entrants of a given market that simply duplicate the past without disrupting current models.

In order for your business to stand out and make a difference is is important that you challenge traditional models existing in your industry. If you are a printer for example, how do you disrupt the model that has been used for over 100 years. A good example of a disruptor within the printing industry is PrintingForLess.com. PrintingForLess looked at the way printing was traditionally produced and determined that they could never grow larger than their tiny town of Livingston, Montana if they followed the traditional model. By challenging current beliefs and methods PrintingForLess has grown to be one of the largest online printers in the world in just a few short years.

Disruption is not an easy thing to achieve and often comes from necessity as in the case of PrintingForLess. But necessity is in ready supply if you are a new business or are trying to grow an existing business beyond current boundaries. Think about how your industry does business today. Why is it done that way? Can it be changed? If you were a customer, what would you want? It is the last of these that can be the most beneficial. Think like a customer doing business with you or your industry. Where are you frustrated? What products and/or services do you really want? For instance; you go to a printer to get printing, but what you really want is a positive image. Be honest with yourself, be prepared to challenge conventional industry thinking and think like a customer. This exercise will begin moving you into the Blue Ocean and give your business a fighting chance at success against industry giants.

I came across an article today titled “Sweat The Small Stuff” from MarketingProfs that made a very interesting point about giving customers what they want instead of what we think they should have. The point was made from the perspective of an average customer Sean Howard. Sean writes a simple entry into his blog but makes a powerful point. Sean will actually inconvenience himself to shop at the same store Mac store across town when he could walk to his local Mac store. Why? Simply because the store across town gives him the service and convenience he appreciates.

As a follow-up to my previous post about the high cost of accepting credit cards, one of the main reasons that Sean will travel an hour is because - get this - that store accepts American Express. Sean shops at his favorite store because - it accepts the payment type he prefers, it makes selecting items for purchase easy and their service is reliable. For Sean it is about neither price nor location!

There are all kinds of marketing, advertisement and promotional schemes a company can employ to attract a customer for the first time. But it is the simple things like convenience, service and reliability that keep the customer coming back. Millions of dollars of marketing can not replace the basics of customer service. The customer that is lured in only to have a less than satisfactory experience can quickly render the best prepared marketing plan ineffective.

In planning how you will bring more customers into your business spend more time considering how you are going to handle them once they get there than planning the campaign. It seems simple because it is. But in our rush to find the next customer, often times we overlook the value of keeping the ones we have coming back.