Big Data has become an increasingly popular means for businesses to learn all kinds of valuable information about their customers, from the types of products they like to their preferred social networks. One important subset of Big Data is customer payments, which includes payment methods, purchase history and geographic location.
While payment data is critical for sales statistics, you can also learn a lot about your customers through a thorough analysis of this information.
"Payment data is a rich minefield," said Rahul Razdan, CEO of business Web solutions provider Ocoos. "You can look at this data [and ask yourself], if I have information about what my current customers did, can I remarket to them?"
Raj Badarinath, senior director of global product marketing and alliances at digital commerce solution Avangate, added that payment data can also be helpful in making calculated guesses about what to expect from your customers. [3 Big Data Tips for Small Businesses]
"When you have any kind of business, you want predictability," Badarinath told Business News Daily. "You can make business decisions about where you want to invest [your time and resources] based on payment data."
Badarinath and Razdan shared a few insights you can glean from analyzing payment data, which can ultimately help you provide better, more personalized service and retain your customers' business.
Effectiveness of ads. With the right campaign tracking tools, you can learn which of your marketing efforts are the most effective, Razdan said. For example, if you put out an online ad that includes a discount code, you can see how many customers paid the discounted price and thereby determine how well the ad worked. General Web analytics tools can also show you how customers arrived at your landing pages and shopping carts, which can then be used to break down conversion rates.
Which payment methods to offer. Today's customers have countless options for sending payments — credit card, debit card, PayPal, etc. Each of these payment methods comes with its own transaction fees, but it's important to offer the options your customers want.
"If 70 percent of customers have a Visa card and you only accept that, you've lost 30 percent of sales," Badarinath said.
Based on your most popular payment methods, you can determine if there's a better payment solution that suits your customers' needs — and your budget.
Other products or services customers might want. As Razdan pointed out, remarketing campaigns can greatly benefit from payment data. Based on customers' past purchases, you may be able to leverage that information to sell them related products and services. This is especially helpful for recurring purchases and for offering complimentary services.
Where to expand your business. E-commerce businesses have the advantage of not being tethered to a physical location, so expansion to a national or global scale is often a much faster, smoother process. It's easy to run experiments with short-term promotional offers without much risk, and the same tactic can be used to reach out to different geographic locations, Badarinath said. If your nonlocal customers' shipping and/or billing addresses seem to be coming from particular regions, it may be worth it to consider running ads in those areas to boost business.
Originally published on Business News Daily.