Help merchants derive more value from transaction data (The Green Sheet)
By Peter Shenk, Womply
Today, outside of the rare, holdout “cash only” dog groomer or roadside taco stand, every successful local business accepts credit and debit cards. Researchers concluded long ago that the majority of small businesses see a significant boost in revenue when they start accepting these payments. While this continues to be true, industry observers have now determined that the data associated with those transactions also adds great value if you help merchants exploit it.
For example, transaction data can power customer relationship management (CRM) and marketing software, so busy merchants can create better customer relationships, attract more new customers and increase loyalty with their current customers ‒ all without spending time they don’t have. And transaction data can enable real-time business analytics to help merchants make smarter business decisions more quickly.
In today’s digital age, data is the new gold standard. Small, local businesses that accept cards can benefit significantly from putting transaction data to use, but most don’t ‒ because they are unaware of what’s possible and don’t know how to get started. As ISOs and merchant level salespeople (MLSs), you are ideally positioned to change that.
No more shots in the dark
Merchants can and should use business intelligence software to move beyond gut instinct and make smarter decisions, faster. Transaction data has the potential to provide merchants with vital information that goes far beyond a simple processing statement.
You might ask merchants if they actually know how they compare against their competitors; what their revenue trends look like on a yearly, monthly, weekly and daily basis; when their best sales periods are, and which need more support. Without transaction data and – this is crucial – without the software to organize and interpret it, the answers to all of these crucial business questions are shots in the dark. Some processors include basic business analytics tools with their platforms, and these can be useful. Many business owners elect to buy dedicated software that permits broader-view benchmarking against their local competitors, historical data and more. Business intelligence software built for small businesses can be a big help.
Better relationship building
CRM and marketing software powered by transaction data can help merchants build better customer relationships. Smart merchants understand the value of repeat customers ‒ who, research shows, spend 67 percent more than other customers. And it costs five times more to acquire a new customer than to keep a current one. To earn more repeat visits, merchants must create better customer relationships; this starts with merchants learning everything they can about their customers. Transaction data can power small business CRM software, which can help merchants build and manage their customer list and facilitate email marketing to improve customer relationships, build loyalty and increase revenue.
In combination with the latest software, credit card transaction data gives merchants the most accurate view of their customer interactions. Are their customers mostly regulars who spend relatively little per transaction? Do they come in once a year but spend hundreds or thousands? Which customers should they target with loyalty marketing efforts? The only way to get these profitable insights is through software that can gather and interpret their transaction data.
Going beyond useless small business software
Lest you think leading your merchant pitch with small business software solutions is too unorthodox to be effective, consider that since 2011, software use by small businesses has grown from 27 percent to 94 percent. Thus, almost all merchants are open to using software to improve their businesses. However, small business software will be quickly abandoned if it is a hastily developed afterthought that integrates poorly, doesn’t deliver on promised value, and/or requires more work and time from the merchant.
Smarter MLSs are transitioning away from pitching low processing rates and moving into a consultative role. You’re on the front lines of the battle for local customers’ dollars. And if you offer processing, it’s a natural fit for you to advise merchants about the exciting software available to turn raw transaction data into vital, time-saving and revenue-generating answers to your merchants’ most pressing business needs.
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