The value that transaction history brings to the table
March 18, 2013

For a long time, running a successful business meant making a number of good "gut" decisions. Entrepreneurs would base their next moves on their own intuition and anecdotal evidence. Even core decisions, such as which products to carry or how much to charge for goods, would be influenced by business owners' intuition.

Fortunately, new technology has changed company management from an art into a science. Entrepreneurs are now much better able to collect data and create reports that can help them make more accurate business decisions. They no longer have to rely on their guts when it comes to making pivotal changes to the way they operate - now they can base their choices off data.

Take, for instance, transaction history. Transaction history is one of the two specific types of behavioral data that businesses can use to not only sell more goods, but also reach a broader audience.

"Transaction history is ... very predictive, but less well understood [than product history]," a report from the Database Marketing Institute explains. "Most marketers today break transaction history into three related behaviors: recency, frequency and monetary amount (RFM)."

Utilizing transaction history
Transaction history has helped businesses to understand some critical aspects of shoppers' behavior. For example, big spenders at a business will respond more effectively to promotions than small spenders, and recent buyers are also more prone to respond than less recent buyers. Small facts like these, which can be observed from transaction history, allow businesses to more effectively engage their customers and improve operations.

In fact, the Database Marketing Institute even came to the conclusion that the use of transaction-based data and RFM analysis can increase profits from customer promotions, with little increase in expenses and budgets.

Businesses, particularly small or relatively young ones, need to keep detailed accounts of transaction history. It isn't enough to just have these records - they should also be sorted as well.

By using a solution such as Sage Mobile Payments, entrepreneurs can improve their ability to record transaction histories. Sage Mobile Payments can be used to sort transactions and provides businesses with a plethora of data points, from the dates that purchases are made to transaction value.

Nexus: G-WEBCD2