Recently I had the opportunity to spend some time at the Innovation Lab of Atlanta-based First Data (NYSE:FDC), a global leader in commerce-enabling technology. During the trip I had the pleasure speaking with Jim Allen, First Data’s Senior Vice President of SMB Solutions.
Jim shares how First Data uses the incredible amount of transactions data they process annually to assist their six million customers in creating experiences that improve and extend customer relationships. The vast majority of those customers are small businesses.
Below is an edited transcript of our conversation. To see the full conversation, click on the embedded video at the bottom.
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Small Business Trends: We’re sitting here in the First Data Innovation Lab. Tell us a little bit about what you guys do here.
Jim Allen: The Innovation Lab is a great space where we drive a lot of the way that we’re thinking. Design thinking specifically, and how we actually evolve. Not only our merchant facing solutions, but solutions across all of First Data.
These are solutions that serve some of our financial institutions as well as our enterprise and even small business customers. It’s a great place and a great way to think about innovating on your products, failing fast and continuing to progress forward to find a user experience that makes sense for the end customer.
Small Business Trends: It’s cool that you have the Innovation Lab, because it seems like Atlanta is a hub of all this online payment activity.
Jim Allen: Both online and actually in person. Some maybe little known facts are:
Over almost 70 percent of all global electronic commerce is processed by a company that’s headquartered in the Atlanta area. For First Data specifically we have almost six million customers globally. We have operations in almost 34 countries, but process payments in almost 100+.
Small Business Trends: That’s amazing.
Jim Allen: It’s quite a hot bed for fintech and for payment transaction companies, but as we touched on earlier, we’re really trying to evolve that philosophy and that mentality. We’re becoming more of a technology enabler for a broad set of solutions. We are thinking about commerce more holistically, not just payments processing.
Small Business Trends: What percentage of those customers are small business customers?
Jim Allen: I would say probably 85 to 90 percent of those six million customers are small business.
Helping Small Businesses Meet Challenges
Small Business Trends: The customer experience is so critically important for small businesses today. What’s the biggest challenge you see for them to put the right customer experiences together, either in person or online?
Jim Allen: I think it’s really [small businesses] finding the time to focus, learn, and understand how to bring things together. Where we can [help is] make that easy and seamless, because a lot of small business owners just don’t have the time and energy to focus on how to bring all that together.[Small businesses] need to find a partner that helps do it for them with a quick learning curve so they can manage it themselves. I think that’s where our suite of Clover solutions … we really try to focus on making sure that we do a lot of that integration for them. We bring quick and easy and flexible to the equation.
And even simple use cases like connecting your retail store with your online store, allowing small businesses to manage their inventory from the solutions directly. Allowing them to upload pictures online. And making sure their inventory connects what they sell in the store versus what they sell online is important in terms of ease of use.
Small Business Trends: You also mention connecting what they do in store or online to the back office. From a small business perspective, how important is that?
Jim Allen: We think about key touch points in the life cycle of a customer that we want to help a small business focus on:
- Consumer engagement and how they’re driving in customers.
- How they’re actually processing payments and orders and how they’re fulfilling them.
- How we ensure that we keep their cost down and optimize that cost from an acceptance standpoint.
- And then to your question, how they manage back office functions. How they do things like reconciliation, reporting, integration into QuickBooks or Xero or some of these accounting software packages.
Even leveraging a tool we have called Insightics which is really all around data intelligence and understanding where your customers are shopping. Where they may actually be shopping with other small businesses or even enterprise customers. What you can learn from that to drive engagement with the consumer in bringing them back to your store.
Big Data Insights for Small Businesses
Small Business Trends: Talk about the importance of insights. What about being able to quickly find out the little pieces of information that’ll allow you to convert where you might not have?
Jim Allen: We process for some of the largest companies in the world. Processing almost $2 trillion annually in card processing volume. Having relationships with financial institutions with almost 800 million cards on file that we manage for those financial institutions. Our big data set is unparalleled and unmatched in this industry.
For us to be able to leverage big data insights we can bring directly to a small business that they would have no access to otherwise, is really a powerful tool we think.
Basic things like if you run an ice cream store and realizing that when it rains on the weekend your sales actually go up quite a bit because people just want to get out of the house and do something with the family — that is an insight that you wouldn’t intuitively think about. But if we can bring data to you through a connected and integrated platform that allows you to make those connections, you can drive promotions.
That’s really powerful for a small business.
Small Business Trends: Are they thinking on that term when they come to talk to you? Or are they still focused on how do I process the payments faster or more efficiently?
Jim Allen: I think the key is not to overwhelm. Certainly they want to do the basics. They want to make sure they’re processing payments. They want to do that securely. They want to do that the most cost effective way they can.
But to introduce them to things that help really drive customers and revenue back into their business I think is key.
That’s where loyalty and rewards programs with our Clover rewards solutions set is really important. That’s where insights and our Clover insights tools and helping people making those connections are key. I think it’s important to introduce them to that, to help them understand the power that they have at their hands. But not overwhelm them at the same time, especially when they’re first adopting the solutions.
Small Business Trends: Tell us about the marketplace a little bit.
Jim Allen: Yes, something that’s unique with the Clover platform is it is the most advanced open platform for commerce in the ecosystem today.
Today we have over 180 applications participating with many developers in the pipeline working to develop new solutions. These are unique solutions that help deliver and meet small business needs across a spectrum of tasks they have to accomplish. A couple of examples I mentioned previously were loyalty applications and insights applications.
But it’s also important to know that Clover is not just the hardware that we see in front of us. It’s really a platform in which third parties can operate and develop and bring their solutions directly.
For example, Booker is a company that’s focused on delivering appointment based software to small businesses. That might be in hair salons or other appointment based businesses where they need to manage a calendar, customer list. They’ve developed a solution that’s fully integrated with our Clover platform to serve those customers directly.
You can tie that in dynamically to how you drive customers in your door. Think of an appointment based business that might have openings in their appointments on a Tuesday. They need to find a way to fill in some of those hair stylists and their appointment book. You can drive proactive promotions and appointments at a discount to your user base that may not have been there in the last 30 or 45 days to fill those appointments.
That’s leveraging the power of the platform focused on a very specific vertical. It helps drive not only basic payment processing and how you manage your business, but also how you drive customers back in the door.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.