U.S. Bank has long made extensive use of customer analytics internally to try to deepen customer relationships. For the past year, it has also been offering business intelligence tools to small business customers, to help them mine their spending patterns. The bank has been piloting a similar tool for large corporate customers with Red Robin, a national burger and beer chain based in Greenwood Village, Colo. This corporate version, due out later this year, will come with a fee, thus allowing the bank to turn business intelligence into a revenue stream.
Since launching in July last year, the bank has offered its small-business customers Scoreboard tools, which are web-based graphical snapshots of their monthly, quarterly and yearend revenues and spending flows, culled from card purchases that occur over the Visa Plus network, for free. These mom-and-pop shops have been able to plug their cash receipts into the system for more comprehensive performance assessments. Access to the Visa Plus network data also means small businesses can compare their revenues against those of peer competitors in the same state. Competitors are aggregated by industry and not named, while revenues are given as percentage changes. The aim with providing the free tool is to improve what U.S. Bank pegs as an industry-wide 20% turnover rate for merchant-services customers by giving customers a value-added, self-directed feature aimed at helping them better understand their revenue and purchasing trends.
U.S. Bank's research pointed to a need among small businesses for simple tools that provide meaningful analyses. The general merchant gripe about well-known accounting applications Quicken and QuickBooks is that while Quicken is simple, it has insufficient features, whereas QuickBooks' rich functionality can make the software difficult to master.
"The typical small-business owner is wearing 15 different hats and running in 14 different directions at any one time, so they need it simple. We can offer them Scoreboard to improve their intelligence and insight into their own revenues and business, as well as their competitive standing," says Robert Kaufman, senior vice president of payments services.
Scoreboard is restricted by the data available to the Visa Plus network, so users will be missing at least a portion of merchant sales data from Visa's closest rival, MasterCard, and its Cirrus network, plus that of American Express and Discover. However, Kaufman says Scoreboard supplies "a pretty accurate sampling because Visa accounts for a majority of transactions. Their metrics are pretty representative of what's going on across industries."
Scoreboard's graphs and charts also do not separate costs merchants incur in interchange from other card and check services fees. Such assessments remain closely guarded, even though revealing them could provide merchants more accurate views of their real income, net profit and spending habits. Though U.S. Bank says it has considered providing such apples-to-apples comparisons of card versus check or cash payments, it has yet to offer such insights.
The fee-based version for corporate customers will be more robust. Red Robin, for instance, wants to be able to assess changes in revenue trends every 15 minutes to better know how happy hour and dinner promotions impact sales. "If they have metrics in 15-minute buckets, they can understand which promotion is bringing in the most customers every day," Kaufman says.
The tool will also provide Red Robin data by individual store and by region as well as by state. The bank is looking to obtain both fee income and customer retention from the offering. Providing such reporting to any customer, the theory goes, can tie them closer to the bank, thus mitigating turnover.
Both tools are based on a customized version of a business intelligence front end, WebFocus from Information Builders, that U.S. Bank has used for nearly 20 years in more than 80, mostly internal-facing, applications across the enterprise. WebFocus pulls or queries data from U.S. Bank's SQL server back end, Kaufman says. The servers supporting the Adobe Flex-based software are housed in U.S. Bank's Elavon card payment processing data center and managed by Elavon staff.
An IBM DB2 is the bank's primary relational database for external reporting applications, and WebFocus has native connections to it; the bank also has SQL, Oracle and Focus database servers. Kaufman says an option to offer a customer-facing, WebFocus-based BI tool came as part of the enterprise license U.S. Bank forged with Information Builders, which the bank hired to do specific modifications to offer the tool externally.