Data clout for ISOs

Data analytics and marketing firm Tranzlogic launched its proprietary process for transforming credit card transaction data into actionable customer intelligence in April 2013. At the time, co-founders Charles Hogan and Anthony Aker were confident the system would address inquiries encountered in the field from merchants seeking to understand their businesses better. What they didn't anticipate was the overwhelming response from the acquiring community. "Frankly, the response has exceeded our expectations in terms of the number of ISOs and acquirers that have expressed interest in partnering with and/or gaining access to the Tranzlogic product," said Hogan, Tranzlogic's Chief Executive Officer. "We've basically been heads down for the past year negotiating with and signing up clients and implementing those clients."

One of the real advantages is that neither the merchant nor the cardholder has to take action for it to work, Hogan noted. He added that "unlike in a loyalty or card-linked offer where a cardholder has to opt-in, this happens and is facilitated automatically in the background." Once activated, merchants can access such data as transaction date, card type, amount and other transaction details. To protect consumers, all personally identifiable information is not available.

In addition, Tranzlogic gleans data from various public and private data repositories and provides demographic information on cardholders, again protecting personal identities, that reveals key geographic, psychographic and economic attributes of a given merchant's primary customers. Hogan has observed that merchants think they know who their customers are, but in reality most perceptions are based on anecdotal evidence rather than empirical data.

"For the very first time you're going to see your top three customers listed, and then when you click on one of those, it's going to bring up a one-page summary that gives you information about those customers," Hogan said. "It's going to tell you what some of their activity and lifestyle preferences are, how much money they make, whether they're married, whether they have kids, if they have a mortgage, etc."

Value proposition

Tranzlogic's first offering is an off-the-shelf solution designed for ease of market entry. The company is at work on a next-generation solution that delivers one-off, value-proposition derivatives to ISOs based on specific feature sets. It is scheduled for release in early 2014.

At this point, Tranzlogic has basic and professional versions of its product. The basic offering is for smaller merchants interested in tracking store trends. It provides detailed summary and reporting functions, as well as access to live marketing consultation and campaign management services to reach targeted market groups.

"The professional offering is geared for the more sophisticated merchant or merchant with multiple locations, where they get access to business intelligence tools, heat maps, dashboards, raw data feeds, so that they can do deeper dives and more complex analytics to see what market penetration is or how their customers vary from location to location," Hogan said.

Tranzlogic's software-as-a-service is offered exclusively through merchant acquirers via licenses. "We charge them essentially per seat, per merchant, per month, and then they decide how and if they'll charge their merchants and which merchants will participate," Hogan said. "We help them to productize the product from a branding and marketing perspective. We do all the training, but they essentially choose how they take it to their market, how they price it and how they sell through."

Based on feedback from those using the program, Tranzlogic believes its program offers ISOs and merchant level salespeople a value-added proposition – and much more. "What's also happened is their sales have gone up and the type of merchants that they're getting are more profitable, so it's actually effectuated a real change in sales by being able to differentiate, and it's had a fantastic impact on retention, so attrition has actually gone down," Hogan said.

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