How to use payment data to drive business insights and growth

Payment data isn’t just a record of transactions, it’s a goldmine full of insights that you can use to drive growth. For many small business owners, managing payments feels like juggling lots of different tasks all at once. The issue isn’t just about making transactions happen. Rather, it’s about unlocking the full potential of the payment data that goes with them. 

If you’re aiming to stay ahead of the competition, leveraging this data can help you. You can use this to make informed decisions to improve customer experiences and optimize your operations. Yet, this requires a strategic approach as you need a balance between security and compliance. 

In this article, we’ll tell you all about how payment data can transform your business. This means you’ll be able to harness its value responsibly.

What is payment data?

Payment data refers to all the information generated during a financial transaction. This includes trends like revenue, the most sold products, spending frequency, customer demographics, and purchase preferences.

For many businesses, this data is still an untapped resource. Business owners, due to limited time and access to the right tools, often miss the chance to use payment data for strategic decision-making. 

What are the benefits of payment data?

You can use payment data to: 

• Identify peak sales periods so you can adjust stock and staffing.
• Discover customer preferences for targeted marketing or personalized services.
• Identify the most profitable products to restock and further promote.
• Refine what you offer based on broader trends. 

For example, a café owner discovers that their surge in morning sales aligns with a particular seasonal drink that’s on offer. This insight can then be used to inspire an extended breakfast menu. 

By tapping into the hidden potential that payment data offers, you can make data-driven decisions for long-term success.

How to identify customer preferences with payment data?

Payment data is like a treasure trove of insights–and it’s almost as valuable as the payment itself. With this data, you can uncover tons of useful information, including:

1. Identify your best-selling products and services

Know which items customers buy most frequently so you can focus on these. For example, a clothing boutique uncovers that there has been a rising demand for sustainable fabrics. This prompts them to expand their eco-friendly product line and increase marketing budget. By combining sales data with web data, the merchant can also pinpoint where most of the sales come from, allowing you to allocate your marketing budget effectively.

2. Identify the preferred payment methods

Learn which payment methods your customers tend to use. Are they fans of credit cards, digital wallets, or buy-now-pay-later? As a business, you can then focus on these methods to make customer transactions more convenient. If you're considering adding a new payment method, the payment data will let you know if it works or not! For example, if you're struggling with cart abandonment, consider adding a buy-now-pay-later option. If it catches on and boosts sales, keep it! 

3. Identify loyal customer

Identify repeat customers and their buying habits. This means you can then target them with loyalty programs or exclusive promotions. For instance, a coffee shop might use this information to reward their regulars with free drinks. 

Analyzing these key trends allows you to tailor your offerings and improve customer satisfaction. The more you align your business strategies with customer preferences, the greater chance you have of building loyalty. And in turn, this loyalty drives revenue growth.

How to optimize operations with payment data?

Besides customer preferences, your payment data can also be a powerful tool to help you streamline operations. When you track payment failures, delays, and processing issues, you’ll be able to pinpoint where your payment system can improve. This should reduce friction in the payment experience.

For example, say a business detects frequent declined credit card transactions for certain card brands. It can address this issue by working with the payment processors to troubleshoot the payment gateway. Resolving this issue can make the checkout process smoother and minimize lost sales. And it’s certainly worth doing with electronic payment transaction volumes continuing to grow by around 15% a year.

How to reduce chargeback with chargeback data?

Chargebacks are another common challenge for businesses. Tracking chargeback rates in relation to new offers, product launches, or targeted advertisement campaigns can help you identify if these initiatives are attracting fraudulent activity or low-quality traffic.

High chargeback rates can also indicate that your product quality isn't meeting customer expectations. It's a good idea to take a closer look at your product and see if there areany areas where you can make improvements. This proactive approach not only protects your revenue but also strengthens customer trust.

Example: A small retailer was struggling with fluctuating inventory levels. After analyzing payment data, they discovered that there was a sales spike in winter accessories every November. The following year, they adjusted stock levels in advance. 

This meant there remained an adequate supply and no last-minute shortages. At the same time, the business learned that most payments were on mobile payment apps. This led them to improve their mobile checkout options. Thus, they aided customer transactions further.

Ultimately, payment data isn’t just about the transactions. This information can point you in the direction of optimal operational efficiency.

What are the ways businesses can use payment data?

When a business uses payment data effectively, it becomes a powerful tool for growth. Here are some strategies to turn your raw data into actionable insights:

1. Offer targeted discounts

Analyze customer spending habits to create personalized promotions. A café could reward its regular weekday customers with a weekend discount. This will benefit both the customer and the business by encouraging weekend visits. 

Another powerful strategy is product bundling.  By analyzing purchase patterns, you can identify items frequently bought together and offer them as a bundle at a slightly discounted price. This encourages customers to buy more, increasing your average cart value and overall sales.  

For businesses with a customized payment gateway, this can be automated. Imagine a customer adding one item from a bundle to their cart. The system could then automatically display the bundled offer as an upsell, making it easy for the customer to take advantage of the discount and increasing the likelihood of a larger purchase.

2. Expand according to geographic trends

Payment data will give you information about patterns. It will show you where there is demand for your products and services. This means you can choose new locations for a physical store. Equally, you could launch a targeted online marketing campaign in underserved regions. 

Furthermore, if your data reveals a specific country or region with particularly strong sales, it might be worthwhile to consider having a local warehouse. This strategic move can significantly improve shipping times, enhance the overall customer experience, and potentially drive even more sales in that market. 

3. Automate your reporting for improved efficiency

Rather than sifting through payment records manually, you can use tools to generate reports. This will streamline the analysis of your key metrics like revenue trends, transaction volumes, and customer demographics. With this efficiency, you have more time to focus on your growth strategies.

4. Forecasting sales

Payment data can provide you with the necessary information to identify payment patterns and analyze your cash flow. 

You can use statistical methods to analyze your data and identify insights into seasonality, trends, and customer behavior. This will help you to better plan your resources and improve the customer experience by reducing stock-outs or ensuring that you have enough staff for busy periods. 

It will also give you a greater understanding of your cash flow, allowing you to create a more robust strategy for your business. 

5. Plan promotion strategies for the upcoming next year

Similar to the above, by using data from this year’s shopping season you will be able to spot where to focus your upcoming promotion strategies. 

For example, an online book retailer may notice that children’s activity book sales often peak just before the summer holidays as parents look to keep their children entertained. 

Armed with this knowledge, next year, the aforementioned online retailer can advertise children’s activity book promotions, such as buy-one-get-one-free sales, making them the go-to retailer for parents. 

6. Determine which products to restock or which ones to remove from the catalog

Just as payment data can be used to determine which products should be promoted at certain times, it can also be used to identify which products to stock or stop selling. 

By tracking your payment data over a long period of time, you’ll be able to see which products are consistently performing well or underperforming. This information can guide your ordering process and make sure that your business is running as efficiently as possible. 

With these strategies, you can directly impact your bottom line in a positive way. Through personal offers, strategic expansion, and automation, you can stay competitive and responsive. 

How to obtain credible and accurate payment data

To unlock the full potential of your payment data, you’ll need the right partner. This is one that will process transactions while offering you transparency and intuitive tools–like Helcim. 

This supports business owners by offering features that simplify and enhance payment data analysis. You’ll see detailed reports showing key trends like peak sales times or customer preferences. This means you can then act decisively.

To further enhance data security and compliance with industry standards, it’s important to choose a payment processor that adheres to PCI compliance and SOC 2.0 compliance. This means that sensitive payment information is handled with the highest level of security and privacy. With this, you have peace of mind that you have protected all data according to standards.

Can payment data help businesses break into new markets?

Payment data can be a valuable tool for businesses looking to expand into new markets. By analyzing payment data, businesses can gain insights into consumer behavior, preferences, and trends in different regions. Here are some key data points to consider:

• Payment preferences: Identify the most common payment methods in the target market, such as credit cards, debit cards, or digital wallets.
• Product preferences: Identify popular products or services in the target market to tailor offerings and meet customer expectations. 
• Seasonal trends: Understand any seasonal trends that impact purchasing behavior.
• Spending Patterns: Analyze consumer spending habits, average transaction values, and purchase frequency to understand the market's potential.

If you haven't yet established a presence in the new market, consider starting with an online store and a basic logistics route to test demand and gather initial data. This information will help you determine whether investing further resources to optimize shipping times and costs for those target markets is worthwhile. 

Even if you don’t make any sales, website traffic and ad data can provide valuable insights into whether the new market is interested in your products. You might discover that shipping times are a major obstacle for potential customers. In this case, consider partnering with local retailers to distribute your products and overcome logistical challenges.

Additionally, it's crucial to research the legal and regulatory landscape of the new market. This includes understanding data privacy laws, taxation policies for foreign businesses, and any specific regulations related to online payments or financial transactions.

How can you make payment data analysis less daunting? 

It may seem daunting to analyze payment data, especially if you’re already juggling lots of tasks. But, with the appropriate payment integration tools and support, the process can be straightforward. This allows you to start making data-driven decisions quickly. 

1. Use payment dashboard to get quick insights

Firstly, you can use the dashboard provided by your payment processors to get the quickest insights. These are user-friendly and mean you can visualize key payment data.  With easy-to-read graphs and charts on things like revenue trends, demographics, and peak transaction times, you can glance at key information without needing to dive deep into the raw data.

2. Use automated payment reporting tools

Secondly, using automated reporting tools will save you time and effort too. These tools can generate regular reports, making it easier to spot trends without too much hassle.

For businesses just starting with payment data, focusing on key metrics is a good place to start. Things like the most popular products or peak sales periods are a good place to begin. These metrics can provide quick wins as you can take immediate action. 

Don't forget to leverage external resources! Market reports and payment reports published by well-known firms like Visa, Mastercard, and McKinsey can offer valuable insights into payment and market information. These reports can enhance your business strategy and inform your decision-making process.

How to build trust in your payment data

If you want effective data analysis, you need to know you can trust the data it’s based on. If you want to enhance this trust, it’s useful to set up compliance management software. This way, you know you’re meeting the necessary standards and you can be confident that the data is accurate and transparent. 

With the right tools and by focusing on data integrity, you can easily overcome the challenges that payment data analysis may have. Instead, have a powerful asset to help you grow. 

Unlock the full potential of payment data for your business with Helcim

Consider your payment data as your additional goldmine beyond the revenue it represents. You can use it to drive growth and efficiency. When you use data to gain an understanding of transaction trends, customer preferences, and even pain points, you can optimize your sales strategies. This means better customer experiences and improved financial performance. 

Payment data is powerful: it can inform your decisions and lead to tangible results. Whether you use it to identify trends, optimize sales, improve the payment process, or all three, payment data can make all of the difference to your business. Now is the time to act–start analyzing your payment data today to set your business up for long-term success.

Next steps

• Understand your payment data: Know that it’s not just about transactions. This holds crucial insights into behaviors, trends, and performance. Analyze the patterns it shows you to optimize your strategies.
• Use payment data for growth: Offer targeted discounts, expand into new geographic markets, and automate reports to reduce manual efforts. 
• Address challenges early: Don’t be put off by the complexity of payment data analysis. Use tools with dashboards and simplified reports to get started.
• Ensure security and compliance: Just as your payments need to be secure, so too does the information about them. Make sure to protect your business and customer data for trust and security.

By following these steps, you can build a strong foundation for the effective use of payment data. This means you’ll be able to make informed decisions that enhance customer experiences and drive growth. With robust security and compliance, payment data is a powerful tool that can give you a competitive advantage. Using it can set your business on the path to long-term success.