Online publisher ClickBank is using payment information to help vet the businesses that use its service.
This is one of many ways in which new CEO Matt Hulett is using advanced data management to police the online marketplace's users.
"It's an open platform, and you get people who want to sell sincerely and those who don't," says Hulett, who became ClickBank's CEO in May after a stint as president of at RealNetworks, provider of the Real media player and several online games. His experience in gaming provided insights that Hulett has taken to his new company.
"The gaming side of electronic commerce has been a gateway to making other businesses more data-driven," Hulett says.
Marketplaces such as eBay and Amazon.com let users rate sellers and products to provide detailed feedback after a purchase, but there are other ways to determine whether the shopper feels satisfied or scammed. A pattern of chargebacks and low sales could be indicative that a seller's customers consistently feel ripped off.
ClickBank provides a range of publishing, electronic commerce and marketing tools designed to help entrepreneurs sell digital content across topics such as cooking, diet, business and finance. It leverages an electronic payments system powered by Chase Paymentech to process more than 30,000 transactions per day. ClickBank hosts more than 60,000 digital products, which are available to consumers across more than 190 countries. It also has a network of more than 100,000 affiliate marketers who promote its products.
Among the products featured on its site on August 22 were a book on how to start or expand your own office cleaning service, how to "ignite you massage therapy business," how to start your own catering business and how to make candy bouquets for fun and profit. It also listed project management templates and educational manuals on retirement planning, home schooling, job interview tips and how to land "the teaching job of your dreams."
ClickBank is combing the data provided by the purchase of these products with software from Kount, a card-not-present technology and fraud prevention company.
This process separates earnest sellers from those who are trying to "over market" or push products with a high return for the seller, but a low return for the consumer. Products with a lot of one-off sales or chargebacks leave people unhappy, and products that have many uncontested payments are considered well received.
"We sniff out the high quality vendor content based on multiple purchases and upsells," Hulett says, adding some of the most successful recent products have been in the health and fitness categories. "We can find a lot of insight from the digital process," he says.
The company's vast data trove is also behind ClickBank Insights, a new e-commerce suite that will help ClickBank's distribution partners determine how to best promote their businesses online, through email or social networks. ClickBank Insights produces recommendations that are based on historical event data collected over the past 15 years, such as related products viewed or purchased by consumers, and is integrated into the digital platform.
"We are sitting on so much data and the interesting way for us to scale our business is by analyzing that data, providing intelligence off of that to our users," Hulett says.
Payments information can be useful in vetting users, says James Wester, an analyst in IDC Financial Insights' payment practice.
"There is a correlation between a company and the number of bad charges or bad debt that they have had to write off because someone purchased their product and said, 'I don't want this because it doesn't do what the company said it was going to do, so I'm not paying for it,'" he says. "All of the data that's being produced now can be run through all sorts of modeling to spot patterns that can inform business decisions."