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Using data to bring customers to life for Paymark

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New Zealand is fast becoming a cashless society with 95% of Kiwis already paying via their card, mobile phone, watch or online.

In a nutshell

  1. Paymark's core business was under threat from global players and technology developments. 
  2. There was an opportunity for Paymark to partner with TRA to use its immense data set to better understand their 85,000 business customers across New Zealand. 
  3. We built a segmentation called the Merchant DNA which goes beyond the numbers to add a human layer to the various customer segments. This has enabled the Merchant DNA to be applied across marketing, sales, service, finance and product development to great effect. 

As the payments hub for over 75% of merchants in New Zealand, Paymark is uniquely placed at the core of this movement. But Paymark’s core business was under threat from global payment providers and disruption from new payments technology. Not to mention that Paymark has historically relied on banks to set-up a payments relationship, where Paymark would be a silent part of the puzzle. That relationship model was quickly proving to no longer be enough.

Paymark had to transform its focus onto its customers

The challenge for Paymark was making sense of a broad customer base ranging from local bakeries to large hotel chains. There was an opportunity for Paymark to partner with us to use their immense data set to better understand their 85,000 business customers, each with increasingly complex needs.

Paymark’s data covers 1.2 billion transactions each year across 140,000 EFTPOS terminals, which gave us a great running start. But we had to go beyond what the numbers were telling us and add a human layer to bring the various customer segments to life within the Paymark business and build a platform that could be used across marketing, sales and service, finance, and product development.

The process: develop layers of understanding to ensure a robust and useful segmentation

We faced a challenge in how to make transactional data human and engaging. Enriching the data with additional personal layers meant we could build a set of human and emotional dimensions into the segmentation, as well as adding depth to the data which made the ultimate segmentation more believable and actionable.

The outcome: the Merchant DNA

The largest segmentation of the New Zealand retail market, tagged to every merchant and updated daily. 

Ross Delaney, head of strategy and innovation at Paymark says, “Not only did the Merchant DNA deliver a rich and insightful understanding of our customers, it also led to some specific and positive results. We delivered call scripts and training programmes so our front line staff could converse effectively with merchants based on this in-depth knowledge and understanding.”

The results: a customer-obsessed business

45% reduction in in-bound calls for ‘Mass Retailers’

Reducing cost to serve as a result of a customer experience improvement.

21 point NPS increase

A new focus on customers has driven up Paymark’s Net Promoter Score.

23% increase in new product sales

A targeted CRM system which identified cross-sell opportunities by segment, leading to an uplift in new product to market connections

Our big learnings which drove success

1. Be brave, trust each other and play to your strengths

The Paymark team were able to get buy-in from the entire organisation, while TRA brought the expertise to deal with a large and complex dataset and uncover the insight. A trusting relationship lead to efficiencies and an agile approach to the project.

2. Make your segmentation evolve with your market

When it comes to segmenting markets, people or businesses there will be changes in behaviour within a matter of months. In New Zealand around 12% of small businesses ‘die’ every year so using live and evolving behavioural data was essential so the segmentation could update daily. This means merchants are re-allocated everyday and future behaviour (growth, decline, exit) can be predicted.

3. You can uncover emotion in behavioural data

There is often a misconception that behavioural data cannot provide the softer, emotional side that qualitative research can. But when we looked at elements like customer loyalty rates, technology investment and the type of growth a business is adopting we can get an accurate understanding of their mindset when it comes to business. If you only think of behavioural data as a functional add on, you are missing half the picture.

4. Challenge traditional approaches and leverage different datasets

Making this segmentation as human and real as possible was important so we embarked on augmenting the data with other publicly available information such as Google location data, website data, tourism data, customer review data and even real estate data. The enriching process created a whole view of businesses rather than just looking at thin slices of a business profile.

5. Be predictive, not just descriptive

Being able to predict outcomes – such as if a business is going to grow or if a business is going to churn – has proven especially valuable. Blending predictive analytics into a segmentation enabled us to look forward and future proof decisions rather than just providing a historical view of segment profiles.

The Merchant DNA was recognised as the most effective piece of insights work in the world, winning Gold at the global 2018 ESOMAR Research Effectiveness Awards. 

Black and white headshot of Shaun Fitzgibbon, partner at TRA
Shaun Fitzgibbon
Partner at TRA

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