Endpoint: You Don’t Have To Be Big To Use Big Data

For even small businesses, a potential gold mine in customer information lies buried in the payments data that routinely flow in every day, says Rick Berry.

Your customers may be shopping nearby or running errands in the vicinity, but when they suddenly receive your coupon or offer, they impulsively purchase and you capture sales and income that you wouldn’t realize otherwise.

Rick Berry is president and chief executive of ABC Mobile Pay Inc., Valencia, Calif. Reach him at rick@abcmobilepay.com.

You can think of data as the oil of the information age, particularly payment-intelligence data. With data becoming an increasingly valuable asset in modern business, the responsibility falls on business-technology executives to generate appropriate returns from that asset.

The whole process of capturing, combining, and processing data, and applying insights in everyday business activities, has become a primary objective for many businesses, and poses many new challenges. Major corporations get it and are investing billions in mining data. Small and medium-size businesses (SMBs), however, tend to lag behind in both recognizing the need and acting on it. A lot of this is attributable to the perception that an SMB may not have the resources or know-how to effectively join the fray.

But is this true? And in a world of seemingly limitless data-mining opportunities, where does the SMB owner start? Answer: payments intelligence.

Reading the Cards

Payments intelligence is nothing more than simply mining the data available through the credit card (and card-not-present) transactions that every retail business possesses. Each card transaction generates intelligence, which, if gathered and managed properly by the business owner, can lead to more transactions, more revenue, and a stronger bottom line.

The beauty of payments intelligence as a starting point is that it uses data that is in all probability already available to you, or at least already retrievable. For example, merchants intuitively understand that the type of card used by a customer at least potentially reveals a lot about that customer. What conclusion can you draw about a customer who makes a $12.99 purchase on a non-reloadable prepaid card, with a $20 available balance, versus a customer making the same purchase with an American Express card?

Other questions that can be answered based on the data in a payment: Is this a repeat customer? Is this a frequent customer? What is a typical transaction size for this customer? What product(s) does this customer purchase repeatedly? What is the annual/monthly amount purchased? Is there any history of returns? What products have been purchased? What are the most frequent purchasing time periods?

Valuable information could be captured and added to your payments intelligence. This includes important dates to your customers, such as birthdays, anniversaries, and religious holidays, all of which allow you to personalize your marketing.

This information can be leveraged first of all to enhance decisions to accept, decline, or ask for another payment method. Or, more important, the information can feed into your marketing and affect customized offers that you might present to this customer. It allows you to build a stronger relationship with the customer, and ultimately draw more benefit from that relationship.

An example of how a merchant might use an aspect of payments intelligence:

A shopper appears in your store or restaurant. She knows exactly what she wants and she has a barcode or QR code on her phone with an offer that she expects you to honor. The barcode or QR code is quickly scanned to identify the promotion and product and also to confirm the customer identification. Drawing on easily obtained payments intelligence—information acquired by mining the data already in your possession—the scan provides pertinent information such as the buying history of that customer. A sales associate can quickly and easily identify what and when the customer has purchased.

In the Zone

Payments intelligence enables you to know what’s important to your customers while enabling you to provide a unique buying experience and increase sales volume.

For instance, by using technology with features such as geo-fencing, in-store sales can be increased. Mobile-payments technology allows you to offer text and e-mail receipts at the time of checkout. This is when and where you register your customer into your program and database. During this registration process, customers provide you with their contact information, such as phone number and e-mail address, at the same time they are opting-in to your loyalty or other program(s).

Now when the customer is not in your store or restaurant and they have no intention of visiting your establishment, your platform automatically sends the customer a text the moment they are within, say, one mile (you set the parameters) of your location.

This is accomplished via GPS in the phone. As soon as customers enter the one-mile zone around your business, they instantly receive a text offering a discount or incentive to buy. The condition is they come in now or within the next two hours or some other deadline that you set.

Although your customers may be shopping nearby or running errands in the vicinity, when they suddenly receive your coupon or offer, they impulsively purchase and you capture sales and income that you wouldn’t realize otherwise. This additional revenue is realized because you’ve mined your available data to determine what item(s) or service(s) should be offered to compel the impulse purchase.

With the rapidly improving retail, restaurant, and payments environments in mind, today’s retail or restaurant owner/operator would be well served to contact any of several mobile POS payment solution providers to easily implement a data-capture and management platform.

Payments intelligence will not only effectively increase sales volume, it will also conveniently provide a unique, interesting, and even exciting buying experience for your customers while you’re providing a cutting-edge and a differentiating service.