Retailer John Wanamaker in the early 1900s is famous for saying that he knew that half of his money spent on advertising was wasted, but he just didn’t know which half. More than 100 years later, despite the advances in targeting and personalization, this sentiment still holds true – but now extends well beyond the brick-and-mortar environment that Wanamaker was speaking of.
Today, in eCommerce, as in bricks-and-mortar commerce, money spent on marketing or products or services without money back in the form of sales is still money wasted. But it’s even worse than that: money spent on buyers that are fraudsters in disguise is worse than money wasted – it can actually cost a merchant, in a variety of ways, including chargebacks.
In this Brave New(ish) world of eCommerce, pinpointing just what buyers wear the white hats and the black hats in an anonymous transaction is a challenge. To that end, BlueSnap, in conjunction with Kount, has released a new product, Cleanse Report, which helps merchants analyze the granularities of their sales traffic, and in fact “cleanse” their sales funnel.
The “cleanse” here refers to documenting where sales efforts are wasted, and wasted in terms of real dollars, in a geographic sense. The efforts poured into a certain area, defined in manpower hours and marketing efforts and advertising dollars, can be negated by declined transactions, chargebacks and especially fraud efforts, which have the nefarious impact of logging sales ultimately detrimental to a merchant.
This is against a backdrop of a $1 trillion eCommerce market, as some research estimates will be in place within four years. The fact remains that an increasing number of consumers are choosing, and will choose, to conduct their shopping online.
In an interview with Karen Webster before the launch, Ralph Dangelmaier, BlueSnap CEO, said that the key cautions that confront merchants in the eCommerce world include the fact that the “profile of the fraudster” may in fact mirror the profile of what Brad Wiskirchen, Kount CEO, referred to as “the very best customer.”
And when the eTailer’s vision is to grow the return in investment on dollars spent on eCommerce initiatives, and yet there is no ability to truly discern how those returns are actually translating into true (and final) sales, Dangelmaier said, “there is a mismatch of economics.”
With the Cleanse Report, said Dangelmaier, the insights gained help merchants identify the best regions to reconcentrate efforts (if they are not so being marshalled), and to target what he called the “highest quality shoppers” within that region. By way of example, he offered the scenario of an early user of the Cleanse Report who found that although the initial and longstanding conventional wisdom had held that firm’s second best market had been Canada, as reported by the number of visits to their website. In reality, those visits were from the guys in the black hats who committed fraud, in effect siphoning off energy and effort and dollars that could have been redirected to Australia – a country of origin that had fewer visits to the site but fewer declines and chargebacks – and therefore a relatively more lucrative market for eCommerce efforts.
In analyzing sales traffic, said both Dangelmaier and Wiskirchen, the Cleanse reports can offer, among other things, a breakdown by transaction attempts in given countries, with Kount’s data analytics estimating that number of declines, and number of chargebacks and completed sales, eventually arriving at a “clean rate.”
The end result is to illustrate where transaction attempts may engender redirected efforts to target higher performing markets from lower ones. In addition, maximizing sales opportunities can come through reconfigured marketing campaigns, say, toward different languages.
Initial merchant reaction to the Cleanse, via pilot, and now officially available as of this morning, has been one that Dangelmaier termed as “astonishing,” coupled with merchant “shock … a lot of merchants do not get conversion data from many of their payments providers today. When you combine conversion data, what countries are converting well or what shoppers are converting well or products are converting well ... they’re blown away and it's almost a way of redirecting money for ROI immediately, so it is a great tool for them.”