Good Analytics Won’t Help If Your Data Sucks

GlobeData

At best, sophisticated analytics software can deliver good answers if the underlying data is accurate and—most critically—is the right data. For a lot of merchants, that is often not the case.

Ralph Dangelmaier, CEO of payment facilitator BlueSnap, is proposing what he sees as a better way, at least for extracting useful answers from payments data. From his perspective, there are two big mistakes that merchants tend to do.

First, they give far too much weight to pageviews and site visits from a region, assuming that a lot of activity translates into a lot of sales. And secondly, when those merchants do wisely opt to isolate sales from a region, they neglect to go back and adjust those figures to account for refunds and chargebacks. Both errors in effect confuse bogus purchases (sort of your anti-customers) with legitimate purchases. That can deliver the polar opposite answer, where the countries that are causing merchants the most headaches/fraud often look like the best customers. (In all likelihood, they’re not.)

BlueSnap on Monday (May 23) introduced its attempt to remedy this problem, a data-analytics frontend called—regrettably—the Cleanse Report. (The product/service is great. The name much less so, unless the goal was to deliver highly-unfortunate Google responses.)

Indeed, Dangelmaier said they are exploring a future version that will take the analytics one level further and ask customers to locally (meaning that BlueSnap would have no access to it) indicate the margins of their various products.

That will allow the software to also indicate which countries are delivering the most profit—in addition to those delivering the most revenue. For example, a merchant might know that the U.K. buys the most product and delivers the most revenue, but might not know that Canadians tend to go for the much higher-margin products and therefore deliver the most to the bottom line. When it comes down to allocate marketing dollars or, in lean times, choose which countries the merchant will cut back on, both the revenue and profit stats are critical.

When looking just at clicks or even raw sales figures, merchants “never really understand what the potential really is,” Dangelmaier said. That data needs to factor in marketing expenses, fraud, returns and chargebacks.

“Most payment companies end at saying whether or not payments go through.  We are giving data to the merchant that they can make decisions on in how they try to acquire customers, such as where to spend money on AdWords,” he said. “We think (payment facilitators) need to go from being plumbing to taking an active role in helping their merchants sell more.”

Within Cleanse data is a combination of stats from BlueSnap fraud research and payments/shopper data from fellow vendor Kount.

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