"We were primarily motivated for the right workforce, but there were also better economic conditions," says Cory Capoccia, president of the firm Womply, a business-support startup that expanded from California in August 2016. "The market is growing strongly, but there also isn't the same overhead that you get in some of the other markets like San Francisco."
Boosted by a recent $30 million growth equity round from Sageview Capital, Womply has been able to quickly ramp up efforts across all three locations and Utah is seeing a portion of that benefit.
Womply launched Retention Intelligence, an analytics solution designed to monitor processing volumes, online activities and competitive market trends.
Retention Intelligence will help acquirers and processors proactively identify risk and reduce merchant attrition. Alerts can be delivered by email or sent directly into a CRM or ticketing system for use by an acquirer/processor’s Customer Service, Retention, and Sales teams to focus on merchants that need their attention.
Recently, Womply has shown how technology can not only help the end customer (i.e. merchant), but that those delivering the technology solutions can reap the benefits of more successful clientele.
Womply expands Lehi office
Womply, a San Francisco-based software partner to the credit card processing industry, and a company specializing in front office software for small and medium-sized businesses, announced the expansion of their Lehi sales and support office.
Originally working in a 4,000-square-foot space, Womply recently jumped up to 16,000 total square feet in Lehi. The existing team of about 70 employees has grown quickly since initially opening the office in August of this year.
“I’m extremely proud to be part of the team that brought Womply to Utah. I think the rate we grew our office speaks volumes to the talent in the Silicon Slopes area. I’m very excited about our plans to continue to grow in Utah in 2017 and beyond,” said Chris Ofstad, Womply sales manager.
Womply also has offices in San Francisco and Portland, Oregon. Portland and San Francisco share the engineering, product and marketing workload, while the team in Utah handles customer sales and support. The Lehi office will also expand the company’s back office teams in 2017.
I’ve been impressed with the quality leaders and employees who have joined our Utah office over the last few months, and we’re just getting started,” said David Rogers, Womply vice president of sales. “We will continue to hire from the wealth of talent in Utah’s technology space to help Womply become the premiere front office solution for small businesses.”
Womply reduces merchant attrition by 17% on average according to recent long term impact study of more than 400,000 merhcants.
Womply, a San Francisco startup that helps small retailers and service businesses manage their marketing, plans to double the size of its small Portland outpost in 2017 after raising $30 million in new funding last month.
The five-year-old company has now raised $50 million altogether. Womply employs 20 in an office on Portland's downtown transit mall, plus 70 at its San Francisco headquarters. It has another 70 workers at a sales office in Utah, where it is slated to expand to 175 with the help of local subsidies.
The Portland office focuses on product management, software engineering and project management, according to Nathan Scripps, Womply's director of special projects.
"The combination of a vibrant local community and top-tier talent make Portland an ideal fit for Womply," Scripps wrote in an email.
Oregon has no large tech companies of its own but its comparatively low operating costs have attracted substantial outposts from many of out-of-state companies, including Intel, New Relic, eBay, Airbnb, Google, Hewlett-Packard Enterprise, Salesforce and Amazon.
Portland has recently become a destination for younger tech and service businesses, too. Like the big companies, they're looking to avoid the expense and intense competition for workers they would endure in the Bay Area or other large markets.
Companies with newer outposts include online security company Cylance, marketing software company Showpad, small-business accounting specialist inDinero, Danish accounting software company Billy, and ticket search aggregator SeatGeek.
BUSINESS JOURNAL: Software startup scores $30M to help small businesses manage reviews
Small-business software developer Womply this week announced it had raised $30 million in its latest round of funding, led by Sageview Capital. The company has raised $50 million to date.
Most small businesses live and die by staying on top of online reviews from sites like Yelp, and by measuring the impact of their marketing. Without software, business owners would have to remember to check online review sites regularly, and try and crunch the data themselves around which marketing campaigns are working, and which aren’t.
San Francisco-based Womply’s software automates some of the thornier aspects of running a small business: Its tool can alert business owners when new reviews get posted, and give them tools to respond to reviews directly. Womply makes software that analyzes credit card transactions to figure out the company’s top repeat customers, and whether marketing efforts are effective in attracting new customers.
Womply’s software automates some of the thornier aspects of running a small business: Its tool can alert business owners when new reviews get posted, and give them tools to respond to reviews directly. Womply makes software that analyzes credit card transactions to figure out the company’s top repeat customers, and whether marketing efforts are effective in attracting new customers.
The company additionally makes a digital filing cabinet for important paperwork and passwords.
“Womply’s mission is to use technology and data to grow, protect, and simplify small business,” Womply President Cory Capoccia said in a statement. “This additional investment will allow us to scale even faster, further expand our partnerships, and remain laser focused on our merchant customers for many years to come. We can’t wait to announce new products and partnerships in 2017.”
Womply has added more than 60,000 customers in the last two years, working in more than 400 industries. The company says its new round of funding will help it hire more people and develop new products.
Capoccia spent five years at online payment processor Verifi before joining Womply.
Womply announced a $30 million investment round this week in support of its front-office SME software, reports said.
The company revealed the new funding, led by Sageview Capital, which now brings the total funds raised by Womply to $50 million. The firm said it will use the latest backing to expand its staff and develop new products as it looks to gain deeper traction with SMEs.
“Womply’s mission is to use technology and data to grow, protect and simplify small business,” said Womply President Cory Capoccia in a statement. “This additional investment will allow us to scale even faster, further expand our partnerships and remain laser-focused on our merchant customers for many years to come.”
In its announcement, Womply noted that SMEs are facing greater competition from larger corporations, making it even more critical that they deliver top-notch customer services. In another statement, Sageview Capital Partner Dean Nelson said he is “impressed” by Womply’s ability to innovate.
“Womply has quietly established itself as one of the fastest-growing SMB software companies we’ve seen,” he said. “This growth has depended in large part on the unique partnership model that they pioneered and perfected, which provides significant value to partners and merchants alike.”
“We are thrilled to lead this investment in Womply and look forward to working with the management team as the company provides an even broader range of products and services to a growing number of small and medium-sized businesses,” he added.
The funding round follows Womply’s partnership launched with JetPay earlier this year. Their collaboration enables JetPay to launch its Insights tool, which provides SMEs with financial data analytics capabilities with information aggregated by Womply. The companies said their deal aims to empower SMEs to make more accurate and informed decisions, armed with insight into things like revenue tracking and competitor trends.
Womply, the leader in front office software for small and medium sized businesses (SMBs), announced today that it has raised $30 million in a growth equity financing led by Sageview Capital, with participation from existing investors. Since its founding in 2011, Womply has raised $50 million in total investment from a combination of high net worth, venture capital, and growth equity investors. The company plans to use the new capital to hire more staff, expand its product offerings, and reach more small and medium business customers.
“Womply’s mission is to use technology and data to grow, protect, and simplify small business,” said Cory Capoccia, President of Womply. “This additional investment will allow us to scale even faster, further expand our partnerships, and remain laser focused on our merchant customers for many years to come. We can’t wait to announce new products and partnerships in 2017.”
SMBs employ more than 40 million people across the country, and over 5.5 million of them have fewer than one hundred employees. As large corporations continue to expand into new and different business categories, these SMBs face increased competition and need new ways to differentiate themselves and deliver outstanding customer experiences. Womply is proud and excited to support this group of amazing people who share so many of our Core Values.
Womply is one of the fastest growing SMB-focused technology companies in America. In the past two years alone, Womply has added more than 60,000 small and medium sized businesses as customers. The Womply software platform is a must have for SMBs of all types and locations. The company’s unified, browser-based platform satisfies the most common monitoring, analytics, and marketing needs for SMBs including online presence and reputation management, customer and revenue analytics, and easy-to-use marketing tools. Womply serves businesses in nearly every zip code in America, across more than four hundred business categories such as restaurants, retail, auto, health and beauty, hospitality, medical, and many more.
Womply is also the leading provider of merchant-focused software to the credit card processing and acquiring industry. Since 2012, Womply has signed more than thirty exclusive product and distribution partnerships with leading credit card processors, acquirers, and independent sales organizations (ISOs). Together these partners process hundreds of billions of dollars in annual credit card transactions in the United States for millions of merchants.
“I have known the Womply team for many years and have been impressed by their product innovation and performance,” said Dean Nelson, Partner at Sageview Capital. “Womply has quietly established itself as one of the fastest growing SMB software companies we’ve seen. This growth has depended in large part on the unique partnership model that they pioneered and perfected, which provides significant value to partners and merchants alike. We are thrilled to lead this investment in Womply and look forward to working with the management team as the company provides an even broader range of products and services to a growing number of small and medium sized businesses.”
Womply is a software-as-a-service (SaaS) provider to small and medium businesses and one of the fastest growing software companies in America. Our mission is to use technology and data to grow, protect, and simplify small business. Every day we serve tens of thousands of merchants, across 400+ business verticals, in every corner of America. We're hiring for engineering, devops, design, sales, marketing, business development, account management, and more. For more information visit https://womply.com or email firstname.lastname@example.org
ABOUT SAGEVIEW CAPITAL
Sageview Capital LP is a private investment firm providing growth capital to small and mid-sized companies in the technology, business services, and financial services sectors. The firm’s investments include 360insights, Alfresco, Avalara, Crimson Hexagon, Demandbase, EverBank Financial, GoPro, MetricStream, Reflexis, and United Capital, among others. Sageview was founded in 2006 and is led by Ned Gilhuly and Scott Stuart, former partners of Kohlberg Kravis Roberts & Co. (KKR) and Dean Nelson, former head of KKR Capstone. The firm has offices in Greenwich, Connecticut and Palo Alto, California. For more information, visit www.sageviewcapital.com.
SALT LAKE CITY (Nov. 10, 2016)—Womply and the Governor’s Office of Economic Development (GOED) today announced the small business data analytics company will open a Utah office, adding up to 175 high-paying jobs to the community.
“Womply is a Silicon Valley company that has identified an important niche market and is experiencing rapid growth,” said Val Hale, executive director of GOED. “Womply used a thorough vetting process to consider multiple markets for expansion and ultimately selected Utah for its high-caliber workforce. We congratulate the company on a wise decision.”
Founded in San Francisco in 2011, Womply uses technology and data to grow, protect and simplify small business. The company provides on a subscription basis a suite of business monitoring, analytics, and marketing tools that help merchants manage their businesses more easily and get more customers. For example, Womply provides complete monitoring and management of online reviews from sites such as Google and TripAdvisor. Womply is also the leading technology partner to the credit card processing industry.
“We are thrilled to be expanding into Utah County and to tap into the great pool of local talent,” said Cory Capoccia, president of Womply. “We aim to build a lasting presence in the area, and we are hiring aggressively for sales, operations, engineering and other critical roles to accelerate and support our already industry-leading growth.”
The Womply project will create up to 175 jobs over the next five years. The total wages in aggregate are required to exceed 110 percent of the county average wage. The projected new state wages over the life of the agreement are expected to be approximately $41,325,000. Projected new state tax revenues, as a result of corporate, payroll and sales taxes, are estimated to be $1,952,888 over five years. The project is expected to generate up to $100,000 in capital investment.
“We are excited to welcome Womply to Utah,” said Michael Flynn, chief marketing officer and acting chief of staff at the Economic Development Corporation of Utah. “This project represents another win in the ‘fin-tech’ industry and will bring more high paying jobs to the state. We are thrilled that Utah continues to make its mark in this growing industry.”
Womply may earn up to 15 percent of the new state taxes they will pay over the five-year life of the agreement in the form of a post-performance Economic Development Tax Increment Finance (EDTIF) tax credit rebate. As part of the contract with Womply, the GOED Board of Directors has approved a post-performance tax credit rebate not to exceed $292,933. Each year as Womply meets the criteria in its contract with the state, it will earn a portion of the total tax credit rebate.
Womply is working closely with the local community to determine the best location for the new operation. Exact location will be determined at a future date.
About the Utah Governor’s Office of Economic Development (GOED)
The Governor’s Office of Economic Development (GOED) charter is based on Gov. Gary R. Herbert’s commitment to statewide economic development. The state’s economic vision is that Utah will lead the nation as the best performing economy and be recognized as a premier global business environment and tourist destination. GOED provides extensive resources and support for business creation, growth and recruitment statewide, as well as programs to increase tourism and film production for the benefit of Utah residents. All administered programs are based upon strategic industry clusters to develop a diverse, sustainable economy. GOED accomplishes its mission through unprecedented partnerships. For more information please contact: Aimee Edwards, (801) 538-8811 or email@example.com.
Womply is one of the fastest growing merchant-focused companies in America. Our mission is to use technology and data to grow, protect and simplify small business. Every day we serve tens of thousands of merchants, across 400 plus business verticals, in every corner of America. Womply helps merchant-focused companies and organizations acquire, retain and monetize merchants. To learn more, visit www.womply.com or email firstname.lastname@example.org.
This past summer, Pokemon Go became the most successful mobile gaming app of all time. Story after story was reported about the enormous impact that the game was having on merchants' revenues.
Womply analyzed it's database of over 2 million merchants saw things differently very differently.
Check out Forbes' piece about Womply's analysis here.
GREEN SHEET: Making big data work for small merchants
Womply powers a unique platform, Insights, designed to help merchant-focused companies and ISOs acquire, retain and monetize merchants better. Insights makes big data work for small businesses so they can use technology and data to their advantage to grow and protect their businesses while simplifying the amount of time running their businesses requires, the company noted.
"In most cases, business owners today don't have access to all of the information they need to run their businesses," Cory Capoccia, President of Womply, said. "They have a difficult time answering questions like: What do I do when someone posts a review about my business online? or How do I stay informed of changes my competitors are making to win customers away from me? or Am I spending my advertising budget effectively to attract more new versus repeat customers into my business?"
Capoccia added that Insights provides merchants answers to these questions and more, and gives the referring ISO credit for delivering the value. "This helps increase merchant loyalty in ISO portfolios, which otherwise would experience very high attrition rates," he said.
Customer retention weapon
Today, ISOs are under attack by tech companies like Square Inc., and others, looking to use value-added services to grab market share. To help ISOs retain merchant customers, Womply equips them with the solutions that small and midsize merchant businesses require to thrive, but were previously available only to companies with multimillion-dollar IT budgets. Womply noted that its products are priced affordably, enabling ISOs to offer merchants a leg up over their competitors and the ability to grow revenue.
The Insights solution pushes data to merchants, informing them how their businesses are performing over time and relative to their competition, who their best customers are, and what their customers are saying about them on various online review sites like Yelp, Facebook, Google and more.
Womply pointed out that it also helps merchants prevent and manage negative online reviews, identify their best customers, and advertise to acquire new customers.
"Because of the value merchants receive, ISOs who offer Womply's products to their portfolio have seen a 17 percent average reduction in attrition rates," Capoccia said. "We're very proud to play a part in helping to keep our partners' merchant churn lower than what they would have experienced otherwise. We also enable our ISO partners to change the type of discussion they typically have with merchants, from a cost-based conversation of, How can I save you money on your processing? to a value-based conversation of, How can I help you run your business better, make more money, retain the customers you've got, and save time?"
Today's busy merchants often don't have enough time to get everything done. Womply stated that Insights helps merchants connect with their customers and conduct highly effective marketing campaigns without hassle.
"Our mission is enablement and simplicity: How do we connect merchants directly with their customers and give them access to the set of marketing skills and resources that they don't have in house?" Capoccia said. "How do we make it easy for them to make decisions around customer acquisition so they don't have to figure it out on their own?" That means providing merchants the maximum advantage so they can use their hard-earned funds as efficiently as possible, especially when they are operating on extremely tight budgets, he added.
Womply emphasized it will continue to focus on saving time for small business owners in the areas that might have caused merchants headaches historically. "Importantly, we want to make sure that our ISO partners are getting credit, because when merchants receive that value, they become even more loyal to the ISOs we are working with," Capoccia said. "When we help our ISO partners sell, retain, and monetize merchants better, and merchants run their businesses better, it is a win-win-win for all three parties involved."
We are proud to announce that we are open-sourcing Womply’s Authorize.Net Payment Plugin for KillBill, a Java implementation of a KillBill Payment Plugin that uses Authorize.Net as a payment gateway. It is available at:
The plugin supports:
- Adding and removing payment methods
- Gateway Integration type payment flows
- Purchase transactions
- Refund transactions
It uses Authorize.Net's CIM mechanism for storing customer payment profile information (no sensitive credit card data is stored in Killbill) to minimize PCI footprint. We use a separate service outside of the plugin to create payment profiles in Authorize.Net which are then associated with payment methods in KillBill via Authorize.Net's Payment Profile ID.
We hope this plugin will help developers to integrate with Authorize.Net in KillBill. We had difficulty getting a ruby framework generated plugin to work out of the box, and as a team of java developers, decided to implement an Authorize.net specific payment plugin in java. The current implementation is certainly missing some functionality, but it is sufficient to support our current business needs. We will continue to improve the plugin and look forward to additional contributions and feedback from the KillBill community.
When building our billing system, we evaluated multiple options, and decided to build our system on top of KillBill. The pluggable architecture and robust set of supported configurations gave us confidence that KillBill could implement our use cases without us having to reinvent the wheel.
Womply is hiring in both San Francisco and Portland for engineering, devops, and more. Every day our software serves tens of thousands of merchants, across 400+ business verticals, in every corner of America. We write AngularJS web applications that interact with backend services written in lightweight, modern java 8 and ruby, and manage data for millions of merchants using technologies like Spark, Kafka, and Cassandra. If you’re interested in joining one of the fastest growing merchant-focused companies in America, visit https://womply.com/jobs to learn what it's like to work at Womply.
Card processing firm JetPay is getting closer to the back end of its corporate clients.
Last year, the company revealed a partnership with Credibly to facilitate financing to its SME users. On Thursday (Sept. 8), JetPay revealed its latest move to help businesses with their cash management via data analytics.
A collaboration with SME data firm Womply has JetPay rolling out its JetPay Insights, a tool that provides analytics of small business financial data. The digital platform helps companies track revenue and uses analytics for other areas of their business, like understanding customer behavior and competitor trends.
“By providing merchants powerful data analysis in an easy-to-understand format, they can make smarter, more informed decisions that affect their businesses,” JetPay said in its announcement.
In a statement, the firm’s CEO, Diane Faro, pointed to the role of data analytics in small business growth.
“JetPay is committed to offering new, innovative solutions to our customers to help them grow and manage their businesses,” the executive said. “Our partnership with Womply allows our merchants the opportunity to gain insight into their customers, gather market intelligence and become more competitive.”
The firm added that smaller businesses don’t always have access to or the resources for such data analytics solutions.
“With access to critical business information, such as new versus repeat customer profiles, local market activity and competitive intelligence, mainstream merchants benefit from the same capabilities as their top-tier counterparts, enabling them to make more informed decisions more quickly,” stated Womply President Cory Capoccia in a separate statement.
JetPay’s moves to provide additional services to the SMEs using its card processing service are similar to other companies in the space, namely PayPal, which has recently added new B2B services for its SME merchants, including small business lending.
WALL STREET JOURNAL: 500 Startups Seeks Broader Acceptance, Reveals Return Data
By TOMIO GERON
When entrepreneur-investor Dave McClure launched his seed fund and accelerator 500 Startups in 2010, he was perhaps best known for his colorful, opinionated blog posts about startups.
The West Virginia-born former PayPal executive had sold a technology consulting firm and successfully seeded startups for Founders Fund. But 500 Startups, with its unconventional large-portfolio approach and brash style, was still an outsider in the button-down world of venture capital.
And although many firms have reshaped venture capital in recent years, Mr. McClure remains a maverick in the industry. Last year, he told The Wall Street Journal that large limited partners were still wary of investing in his firm.
Now he’s seeking more respect, and 500 Startups has gone so far as to reveal its detailed return fund performance data to help make the case.
Venture firms typically keep such information a closely guarded secret. But Mr. McClure tends to share more—just as he does on social media.
So why is he disclosing confidential data about the firm now?
“Because our results are very good,” Mr. McClure said. “I’m not sure if they know (about our returns) or not, but I want make it super-clear.”
Mr. McClure’s theory, unlike traditional firms, is that a venture-capital firm can stretch to a larger scale. His firm, now with more than 125 employees, has invested in about 1,500 companies, 259 companies of them in Fund I.
Founders Fund investor Peter Thiel’s “power law” in venture capital holds that one “home run” investment that returns an entire fund is an ideal outcome. Accordingly, firms should invest in fewer companies.
Mr. McClure says his math upends that thesis. A typical venture fund with 50 companies counts on one massive outcome to return a fund. “If I have 250 companies, I can see five (big exits),” he said.
The firm’s first fund is in the second quartile compared with all U.S. venture capital funds, while the second and third funds are in the first quartile, measured by total value to paid in capital, or TVPI, according to data from Cambridge Associates. TVPI is an investor measure of current return on investment in a fund.
Fund Close Date Net IRR Peer Median TVPI Industry average
Fund I ($29.4M) 2010 18.5% 22.12% 2.05x 2.14x
Fund II ($45M) 2012 23.1% 14.92% 1.66x 1.41x
Fund III ($85M) 2014 20.3% 0.61% 1.18x 1.01x
Source: Cambridge Associates
Of the firm’s three funds since 2010, the most recent fund has performed best when compared with industry peers. The firm’s first fund, a $29.4 million 2010 vintage vehicle, has a net internal rate of return of 18.5% as of the end of 2015.
500 Startups is now raising its fourth fund, targeting $150 million to $200 million and has raised about $50 million so far, according to a person familiar with the matter.
To match a traditional firm’s “home run” exit, Mr. McClure says 20 of Fund I’s 259 portfolio companies will achieve medium-size exits with a $100 million valuation. And he expects three to five large exits such as an IPO—in addition to Twilio Inc., which went public in June. That would be 8% to 10% of companies with “meaningfully large” outcomes and 1% to 2% that could be valued at $1 billion or more.
“That’s nowhere near as concentrated as a traditional VC fund, where one or maybe two drive the entire fund, Peter Thiel’s power law notwithstanding,” Mr. McClure said. “That’s from a portfolio of 50 companies or less. That’s not necessarily wrong. It’s just not large enough of a data sample.”
One limited partner says the approach works. “The data shows it’s a very quantitative approach that’s both scalable and repeatable,” said Court Coursey, managing partner at Tomorrow Ventures, Eric Schmidt’s venture firm, which invested in all three 500 funds. “It does work if you have enough doubles and triples.”
Before co-founding 500 with former Google executive Christine Tsai, Mr. McClure was a seed investor at Mr. Thiel’s firm, Founders Fund. There, via FF Angel and via fbFund, a joint venture with Accel Partners, he funded companies that generated large exits or gains such as Twilio, Zimride (now named Lyft), CreditKarma, SendGrid and Wildfire. Mr. McClure’s FF Angel investments, which don’t include fbFund, turned a $2.7 million fund into $103 million in value, before the recent Twilio IPO, according to a person familiar with the matter.
“McClure’s returns while at Founders Fund are exceptional and rank near the top of any seed investor over the past five or six years,” said a limited partner in venture funds who isn't an investor in 500. “His performance at 500 Startups to date is solid, but isn't yet truly exceptional.”
Most Silicon Valley firms prefer to invest with entrepreneurs in close proximity in the belief that this is the best way to find successful exits. But 500 Startups has emphasized investing in international companies.
Its international deals compare well to its U.S. deals. In Fund I, 39% of the fund’s investments were outside of the U.S. International companies—including companies that moved to the U.S.—are now valued at close to 6 times their invested capital and represent 56% of Fund I’s gains.
Three of the five top companies in Fund I by gain were founded outside the U.S.: online education startup Udemy, which has raised $173 million, call center software outfit Talkdesk, which has raised $24 million, and customer service startup Intercom, which has raised $115 million.
“The thesis was there’s 6.7 billion people who don’t live in the U.S. and internet growth rates and penetration are rising outside the U.S.,” Mr. McClure said.
The top three U.S. companies from Fund I are MakerBot, Twilio and Womply. The firm also invested in the Series B and C rounds of Twilio.
Its accelerator companies also have had positive results. One-quarter of its Fund I dollars were invested in accelerator companies and those companies represent about one-third of the fund’s gains.
“Because (500’s) model is a little different, it has taken longer to prove itself,” said Jason Lemkin, who recently raised $70 million for his own fund. “I do think it has mostly proven itself at this point. Maybe one of 500’s biggest assets is how strong it is internationally. The further you get from the San Francisco Bay Area, the existing ecosystem gets dramatically weaker.”
July 6, 2016 at 1:46pm - SCOTT GOLDTHWAITE
Irv Henderson, co-founder and CEO of Talech
Cory Capoccia, president of Womply
Shaun Donaghey, founder and CEO of Generator Payments
As we begin to see evidence of the evolution from reliance on Big Data by big companies to the adoption of Small Data by smaller merchants, it’s important to understand the difference between the two types of data—and the benefits that Small Data can offer. While the largest retailers have the benefits of maintaining data warehouses, business intelligence tools, and data analysts to comb through their own Big Data to spot customer trends, make targeted offers, and steer payments to lower costs methods, smaller businesses do not have these capabilities. However, small businesses do have a need to better understand their customers without the heavy investment in Big Data tools, technology, and personnel.
The March 2016 announcement that Square has integrated with Facebook to allow its clients to buy and target Facebook advertising is a harbinger that smaller-budget companies will increasingly take advantage of segmented data sets for the purpose of better understanding their customers. Just as Square clients learn to leverage targeted information to attract new and repeat customers, small to medium-sized businesses throughout the country are beginning to identify methods to capture Small Data and use it to grow their sales and increase their profits.
But what exactly is Small Data, and how can smaller companies leverage it to make strategic business decisions? Three payments industry experts—Talech’s Irv Henderson, Womply’s Cory Capoccia, and Generator Payments’ Shaun Donaghey—offer their take on the importance of Small Data to the U.S. market and share insights about why merchant service sales teams must evolve to offer solution-based sales to remain relevant in an increasingly data-driven business climate.
What is the difference between Big Data and Small Data?
IRV HENDERSON: Big Data takes extremely large data sets and analyzes them for patterns, trends, and associations. Small Data is the democratization of data collection, storage, and analytical tools that makes insights about small businesses accessible and intuitive. While some tools are more appropriate for Big Data sets—machine learning, for example—Small Data sets can nonetheless take advantage of analytics that surface important insights about business performance.
For example, with a Small Data set, we can take a stand-alone business and evaluate its customers’ spending patterns for recency, frequency, value, and preference. Or, we can use the same data set for evaluating inventory burn down, forecasting. This level of data analysis obviously has huge implications for the way a business owner runs their corner store.
CORY CAPOCCIA: From my point of view, Small Data is the mass democratization of the access, storage, and processing of data. To benefit from Big Data, historically, it was a prerequisite that you were a large organization that could afford to support the large server farms necessary to extract value from the underlying data sets. Advancements in computing storage and processing technology have liberated us from that cost-prohibitive overhead and, in turn, enabled collaboration around an ecosystem of Small Data.
SHAUN DONAGHEY: Small Data is simplified Big Data that is accessible to the small business owner. Whilst Big Data has relied on specialist skills, tools, large budgets, and platforms to leverage, Small Data provides a simple, cost-effective, and intuitive way for a small business owner to benefit, if done right.
How would you describe Small Data to the business owner at the corner store?
HENDERSON: Small Data is about analyzing the data in your business that can help you run your business better through a focus on increasing revenues and controlling costs. For example, as a business owner, it’s about understanding what items sell well together, so you can encourage customers to make a larger spend at the point of sale.
CAPOCCIA: Small Data enables small business owners to make data-driven decisions without requiring a large, upfront investment of time, technology, or training. For example, Small Data is making advanced staffing decisions based on Small Data highlighting how the business has performed due to weather or local events.
DONAGHEY: What if you could make better business decisions for your business every hour of every day using information readily available to you? Imagine being able to predict certain business events that would drive revenue growth and profits, all through a simple accessible interface—would that be of interest to you?
How do you segment the market between merchants that use Big Data and merchants that use Small Data?
HENDERSON: The segmentation between Big Data and Small Data can be broadly defined along merchants’ size (read: budget) and business management. In general, bigger merchants who have growing concerns of greater than $1 million are more data-driven in their decisions. This is particularly true for business owners who have ambitions to grow their operations across many locations.
While costs related to level of investments may limit small to medium-sized businesses (SMBs) who are able to invest in the near-term, the decreased costs related to the proliferation of the cloud, mobile, and inexpensive SaaS software will make the investment case more compelling going forward.
CAPOCCIA: Historically, this was entirely defined by a merchant’s revenue/size. Large multi-location regional or national retailers were the only merchants that had the resources (time, tools, technology, budget, etc.) available to access Big Data. Even if subject matter experts (SMEs) had access to the same technology, they wouldn’t have the time or the skill set necessary to benefit from the Big Data. Given advancements in technology, we’re now about to apply large amounts of computing power against the same Big Data sets, but distill the information down into a Small Data form that is not only palatable, but actionable, for SMEs.
DONAGHEY: Revenue, number. of sites/stores, scale, IT savviness and SaaS adoption, existing software/tools, ownership/management model—these are all metrics which could be applied to assess whether a merchant is a “Small Data” candidate. There isn’t a single definable characteristic—a coffee shop owner with 10 sites is just as eligible to benefit as an operator with a single store.
How can merchants utilize Small Data to increase sales, reach new customers, and retain profitable customer relationships?
HENDERSON: To effectively use Small Data, merchants must first capture data at the point of transaction—in store or online. Because many small business owners have a strong physical presence, they’re often able to capture data when the customer comes directly to the store. In our experience, point-of-sale (POS) and/or loyalty programs are quite efficient at capturing Small Data as these programs are “listening” and capturing critical data on transactions in the business—what’s selling, who’s buying, when it’s selling, how often it’s selling, etc.
Once the data is captured, merchants are able to work with their own data set and take direct action to effect business outcomes. For instance, merchants can run a highly targeted promotion against highly valued customers who’ve previously visited the store. Or, they can run a promotional campaign against their existing customer base to refer a friend.
CAPOCCIA: There are so many ways that merchants can utilize Small Data to improve their business, so let’s focus on a very tangible real-world example to illustrate.
Online reputation is critical for merchants to actively monitor and manage. Nine out of 10 consumers are translating their online buying behaviors on websites like Amazon into the offline world. Consumers are actively researching offline businesses online to identify the business with the best overall rating. This applies to consumers choosing which dentist or doctor to see, where to get their car repaired, where to eat, which hotels to stay at, which activities to book, etc. Managing online reputation is difficult and time-consuming for merchants because they have to actively monitor activity across numerous websites—from Facebook to Yelp, Trip Advisor to Open Table, Google to Angie’s List, etc. What is even more challenging is trying to understand the relationship between online reputation and revenue generation. For example, merchants do not understand the impact to their revenue when their overall reputation goes down by one star.
Harvard University conducted a study recently where it discovered that a one star change in a merchant’s online reputation can result in a decline in revenue by as much as 10 percent. Imagine you’re a hotel generating $1 million in annual revenue…that means $100,000 of your revenue is at risk.
Small Data solutions that actively manage a merchant’s reputation, and tie that activity back to the merchant’s transaction and revenue performance, help merchants attract more customers while simultaneously retaining the customers they have invested to acquire.
DONAGHEY: Small businesses have one great advantage over medium-enterprise organizations. They can be nimble, agile, and make decisions instantly. They are in control and have a deep connection to their business. Data they own and control allows them to make informed decisions. A merchant could use Small Data to predict cooler weather and analyze foot-traffic trends to offer location-based incentives on hot drinks if a customer signs up to its loyalty program.
What’s the ROI for merchants to invest in data management tools?
CAPOCCIA: For SMEs who utilize data management tools, our belief is that the biggest ROI is the return on their time. They are able to make more informed decisions about how to run their businesses more effectively, in a fraction of the time it would have taken them without a data management tool. Given that they are often heads down operating in the business, time is the greatest thing that can be given back to merchants. If Small Data can help them grow their business more efficiently, then that is a huge win.
DONAGHEY: The question should be, what you can lose if you don’t? The small business owner isn’t interested in tools so he can passively view and analyze trends. What he needs is proactive support in making quick decisions that will positively impact the business. The ROI is surely measurable by the impact on top/bottom line.
How do security and privacy regulations impact Big Data and Small Data?
HENDERSON: For consumers, security and privacy regulations are providing some assurance that the massive amounts of data being collected by businesses will not be abused. For business owners, the regulations are helping to provide a structure that balances consumer privacy against the business priorities. Regulatory levers around security and privacy will continue to manage the tension between the enormous amount of data being collected on consumers and the protection of this data both in terms of its storage and usage for commercial purposes by SMBs.
CAPOCCIA: Consumer privacy is at the top of the list. With the power of Big and Small Data comes great responsibility to be a good steward of the data and to leverage the data in a way that creates a better interaction between merchants and consumers without breaching anyone’s privacy.
DONAGHEY: Privacy for consumers will be of concern, although a number of Big Data sets are anonymized (or so we are told) to a degree to protect the individual. If data is anonymized, what role does security have? Data collection sits alongside other processes that consumers are inherently comfortable with (or opt in for)—using the credit card to pay for goods, allowing location-based services, opting in for notifications, proximity alerts, geo-fencing, etc. As long as identity cannot be traced to an individual or address, Big/Small Data should be OK.
Where do you see this market two years from now?
HENDERSON: In payments, all the experts know what will happen in 10 years; but, no one knows about the next two years. It’s a puzzle. We believe during the next two years, the migration to more data-driven decision making at the SMB level will be slow and steady.
There are three primary trends that are irreversible at this point: Tablets are deeply penetrated in U.S. homes, data is inexpensive to store, and the proliferation of software that targets business owners is at an unprecedented level. These three trends are shifting merchants’ expectations of the value of services.
CAPOCCIA: In addition to the trends highlighted by Shaun and Irv, we also believe that the increasing number of younger generations who are either taking over or starting up their own businesses is accelerating the pace of adoption of Small Data solutions. Because of this increasing adoption, it will be an absolute requirement to have a solution in place to remain competitive.
DONAGHEY: Small Data will be recognized as more than a value-add to small businesses, but something that should be critical to their tactical and strategic daily operations as much as running a POS, maintaining inventory, managing staff, etc. To reach this, though, there needs to be education, relevant success stories, and a willingness on the part of the small business owner to embrace a new way to help grow their business.
How do you think Small Data conversations change the way that merchant services sales teams engage business owners?
HENDERSON: In the payments industry, sales forces that have traditionally focused on merchant services have increasingly had to focus on value selling over a discussion on “basis points.” SMBs want to understand how new software services (mPOS, loyalty/gift, accounting, reputation) can help them run their businesses better.
Increasingly, sales forces need to be knowledgeable about the services that business owners are adopting. Traditional merchant services sales reps risk disintermediation as customers’ expectations shift well beyond basic card acceptance.
CAPOCCIA: It is one element of the “new sales” shift where merchant service sales teams are recognizing that they must evolve into solution-based sales vs. being a one-trick pony selling a commoditized service where the only differentiation is price. The reality is that in order to be relevant to the needs of business owners today, merchant service sales teams have to change or else they will quickly become irrelevant and extinct.
DONAGHEY: There needs to be a large shift in merchant sales reps’ attitude and education to become solution advisors, if that is at all possible (perhaps in certain dark reaches of the ISO community it is not). Some technology companies, like cloud-based POS providers, have been doing this for a while—but merchant services reps have a unique advantage to engage the owner in a comprehensive business discussion that would lift their credibility if they approached a prospect with more consideration than getting ink on a contract, and the merchant will expect and demand this over time.
Scott Goldthwaite is senior vice president of operations at Aliaswire Inc. and the chair of the ETA Technology Council. Reach him at email@example.com.
Merchants Gain Business Intelligence and Reputation Management Capabilities to Drive Growth
June 23, 2016 10:12 AM Eastern Daylight Time
LAS VEGAS--(BUSINESS WIRE)--Atlantic Pacific Processing Systems (APPS), a leading merchant payment solutions provider, and Womply have partnered to offer APPS Insights, an entire platform dedicated to the three core areas of focus for merchants — revenue, reputation and competition. APPS Insights is a powerful tool that takes valuable information surrounding merchant businesses and converts it into actionable intelligence.
Growth remains top-of-mind for small business owners, but when they are mired in day-to-day operational issues, focusing on taking the necessary actions for growth becomes difficult. With APPS Insights, owners have ready access to business-critical information and can take action directly from the platform’s dashboard. Powerful data analysis in an easy-to-understand format enables merchants to make smarter, more informed decisions that can positively affect business results.
“Two key points of differentiation our company delivers are the ability to work seamlessly with any depository banking institution, and to facilitate dynamic and specialized solutions for our merchants,” said Abe Maghaguian, president and chief executive officer for APPS. “With APPS Insights, powered by Womply, we are excited to continue differentiating our merchant product offering,” added Maghaguian. “Now, all our merchants can leverage a single source to manage online reputation, while understanding how the market is performing around them. This level of business intelligence is something we are extremely proud to deliver to our merchants,” continued Maghaguian.
Online profiles with a reputation score are becoming more prevalent in today’s Internet economy. Most consumers are leveraging these profiles to make buying decisions; however, business owners do not have an easy way to track, monitor and manage reputation effectively which impacts growth. By using APPS Insights, business owners can view reputation across profiles and directly manage what customers are saying to ensure their businesses are represented fairly and accurately. APPS Insights ties this capability with a suite of alerts that notify merchants of any major reputation updates or news about the competition so owners remain aware and can act quickly, if necessary.
“Womply was founded on the belief that business owners want and need enterprise-level tools on small business budgets that consistently deliver the promise of growth, protection and simplification,” said Cory Capoccia, president at Womply. “By partnering with APPS, we can continue expanding this belief by providing their loyal merchant base with access to this incredible platform,” added Capoccia. “By placing critical business intelligence like online reputation, business performance and market activity in front of merchants, business owners can make faster decisions to drive growth,” indicated Capoccia.
About Atlantic Pacific Processing Systems (APPS)
Headquartered in Las Vegas, Nevada with operations in Fountain Valley, California, APPS provides merchant credit card processing services throughout the United States as a merchant acquirer. APPS helps merchants implement cost-effective and efficient transaction processing solutions which are competitive, scalable and tailored to specific business operations and environments to save time and money. For more information, please visit www.approcessing.com or email firstname.lastname@example.org.
Womply is one of the fastest growing merchant-focused companies in America. Our mission is to use technology and data to grow, protect and simplify small business. Every day we serve tens of thousands of merchants, across 400 plus business verticals, in every corner of America. Womply helps merchant-focused companies and organizations acquire, retain and monetize merchants. To learn more, visit www.womply.com or email email@example.com.
Today we are launching Statboard, a single source for interesting facts, statistics, and trends regarding small and medium-sized businesses, consumer spending, and credit card usage.
Womply’s growing portfolio of partnerships provides us with unique access to billions of credit card transactions. Our software combines this info with business and employment data, online business profiles, and consumer demographics, to give small and medium sized brick-and-mortar businesses tools that have historically only been available to much larger businesses or online companies.
The Womply Analytics team builds the tools and algorithms that powers Womply’s software, which in turn helps America's business owners and managers grow, protect, and simplify their businesses. Statboard leverages the same analytics capabilities to yield insights that are applicable to the broader market and population.
Here are just a few of the statistics that are included in Statboard:
- In 2015, the average credit card transaction in high income areas was 53% higher than in low income areas
- Suburban customers spent 12% more per transaction than urban customers in 2016
- Urban and suburban SMB retailers saw double the revenue decline in 2015 (-3.5%) as compared to rural shops (-1.7%)
For added context, our research team has also presented notable statistics from other leading industry sources. In addition to regular Statboard updates, we will also be publishing more in-depth analyses about consumer spending and SMBs.
Statboard content is available for public use with attribution.
If you're interested in learning more about Statboard or you'd like to join Womply's Analytics team to help us with our mission, please email firstname.lastname@example.org
Womply is one of the fastest growing merchant-focused companies in America. Our mission is to use technology and data to grow, protect, and simplify small business. Every day we serve tens of thousands of merchants, across 400+ business verticals, in every corner of America. We're hiring in both San Francisco and Portland for engineering, devops, design, sales, marketing, business development, account management, and more.