Insight into customer spending behaviour helps businesses to build an effective strategy. In new research by Barclaycard Payments and FT Longitude, nearly half (49 per cent) of the senior UK business leaders surveyed say that better insights into customer habits would give them a significant competitive advantage.
Payments data should be considered a key source for these insights. It shows businesses exactly how their customers are spending and when, revealing what types of transactions are most likely to go through. This helps companies build a deeper understanding of customer needs and priorities. Barclaycard Payments research reveals that this valuable data is not being analysed and used to its full extent: 51 per cent say their payments data is a major untapped source of valuable customer insight.
Businesses are sitting on a gold mine
Using payments data more effectively can transform business strategies. Iñigo Perez, global head of digital strategy and transformation at Vodafone Group, explains: âThat data is something that you can analyse in order to adapt your strategy and refine your customer profile, then take action. For example, do we need that amount of stores in that area or that kind of store in that area? Do we need a more flexible store or high-end store, or maybe we don't need it at all anymore because that area is very digitalized?â
The membersâ club chain Soho House recently introduced its House Pay platform, which allows members to pay through its app. Easier tracking of customer spend has created personalisation opportunities for the company. âWe now know exactly what they spend and who they are,â says CTO Raj Dhawan. âKnowing that someone visited the Soho Farmhouse in the UK last week and in New York this week, for example, helps us to present them with things that are relevant to their travel.â This might include presenting bedroom ideas, relevant events, or highlighting facilities at specific Soho House locations, increasing the brandâs presence in customersâ plans and growing loyalty.
However, not all businesses are positioned to benefit from their payments data as much as they could. Talent shortages and competing funding priorities can block leaders from capitalising on these insights.
A reliable payments provider can help organisations find out how customers are spending with their business and competitors, identify the customers they have gained, lost and retained and provide an overall market view.
Dr Kion Ahadi, Director of Strategy, Futures and Insight at professional membersâ association, The Law Society, says recent payment transformation has given them a more detailed picture of customer spending habits. âWe created a unique field for each of the solicitors that we interact with, but to be honest, the process is not as automated or sophisticated as I would like yet,â he says. âWe just haven't had the level of resource to build that into the functionality.â
External payments analysis pays off
Partnering with an external payments provider to analyse and advise on strategic steps can free up internal resources.
âWe've got various dashboards, and we can get the data we want to analyse the payments that customers make,â says David Gammie, CFO at beer and wine subscription service Beer52. âWe could try to do some of it ourselves, but the reality is that by using an external platform, we've got a really good analytics back-end where we can get really good, clear reporting.â
The Barclaycard Payments research suggests that businesses want to use their payments insights more effectively. The respondents say that when they choose a payments partner their priorities are transparency, reliability and accuracy of data (49% say this is a top factor), and the ability to combine data sources (46% say this is a top factor). Building an effective partnership which combines these benefits with strategic advice and tech-enabled data analytics tools will give them an edge in their market.
âA reliable payments provider can help organisations find out how customers are spending with their business and competitors, identify the customers they have gained, lost and retained and provide an overall market view,â says Kirsty Morris, managing director of specialist sales, Barclaycard Payments. âThis gives them a competitive advantage, puts them at the forefront of their industry, and identifies key trends that could help their businesses grow.â
Consumers want the personal touch
To keep up with changing customer needs, it is vital for businesses to understand their preferences, habits and how they interact with channels. Payments data holds many of these answers, and leveraging it effectively unlocks crucial competitive advantage.
Because we know a lot more about each individual, we are able to form a better picture of them and personalise the service,â says Soho Houseâs Raj Dhawan. âThat is the gold dust we can use to improve our customersâ experience.â
About the research
In December 2022 and January 2023, FT Longitude and Barclaycard Payments surveyed 500 senior UK business leaders (C-suite and C-1 level), at organisations with an annual turnover of at least ÂŁ10mn. The research sought to understand leadersâ strategies, aims and ambitions in the payments space. Within the research, a big business is defined as an organization with 250 or more employees.
from Barclaycard Payments
