Why zooming in on high-growth SMBs is a make or break for payment companies

Time-tested wisdom says that in business you’re either growing or you’re dying, there is no third direction; these words have never been more accurate than in today’s fiercely dynamic, mile-a-minute economic landscape. Ask anyone who invested in Amazon or Bitcoin on the ground floor – knowing when to make your move is every bit as important as selecting the appropriate clients for your organization to partner with. 

In an ecosystem that is fueled at an ever-increasing pace by eCommerce and its ecosystem service providers – specifically payment services providers – the financial impact of properly aligning your company’s marketing and sales efforts to the Lifetime Value (LTV) of a potential client cannot be overemphasized. 

A thorough and timely assessment of a potential client’s LTV to your company and its projected Return on Investment (ROI) can make all the difference to your company’s bottom line.

Lifetime value is the missing piece to the ROI puzzle.

However, it is often difficult to know exactly which Key Performance Indicators (KPIs) or success metrics to consider – traditional methods of analog-age data analysis are almost entirely obsolete due to the rapid and consummate digitalization of the business world. Using advanced data intelligence capabilities and artificial intelligence analysis, financial services can zoom in on high-LTV customers early-on and gain a competitive advantage in the marketplace, enabling companies to dramatically increase the efficiency of their marketing expenditures, reduce customer acquisition costs,  achieve higher ROI in the short-term, and increase overall profitability in the long-term.


Identifying Ideal SMB Targets is Tricky

Identifying the best SMBs toward which to dedicate your marketing and sales resources requires a detailed analysis of (i)trends affecting the LTV and growth rates of target markets; and (ii) Lifecycle triggers indicating high-growth and financial stability  of an individual business.



 1)Trends affecting the LTV of a target SMB market;  a key parameter that is extraordinarily useful is the 5-year survival rate of SMBs, which can vary widely depending on the target market or sector in question. 


Major differences in the 5-year survival rate between SMB’s Merchant Category Code’s drive different Lifetime Values


For example, SMBs in the food and beverage industry show a 5-year survival rate of 32%, and automobile sales companies have a rate of 38%, whereas other industries show an unexpected and marked difference, with veterinary services at 46% and automotive maintenance among the most stable performers in the long run, with an impressive rate of 50%! 



2) Discovering and tracking fast-growing SMBs using lifecycle events and change triggers. Data shows that  5-10% of businesses within segments that have a lower 5-year survival rate (such as food and beverage) will turn into high-growth, high-LTV customers. 


In order to grow, payment providers must serve all SMB sectors. Therefore, they must adopt new technologies/methods to zoom in on fast-growing SMBs within “high risk” sectors that have the potential to achieve 50%+ incremental ROI on marketing spend, and a high LTV.

However, using static and often outdated data about a business is often misleading as the SMB market is highly dynamic.  To truly determine which businesses, and even which sectors, merit your company’s attention and resources as potential customers, the data used must accurately represent the dynamic nature of the activity in the marketplace. 

What is really needed is smart data. This type of data, just like the actual businesses they represent, must be dynamic in nature, and reflect the constant state of flux typical of most SMBs; for example, a 10-year-old company with proven stability but negligible growth rates may not be as desirable a target customer as a younger company consistently showing significant increases in traffic, opening new locations or starting to ship internationally. A smart data platform can sleuth this out, helping decision makers in sales and marketing alike.

Use Data to Work Smarter, not Harder

Tarci leverages smart data using a system of ‘tags’ and ‘triggers’ to regularly monitor small and mid-size businesses and compile relevant data with a focus on significant changes and events  in a company’s lifecycle, such as applying for a business license or permit,  opening a new location, change in ownership or expansion into new markets.

 ‘Tagsessentially serve as a more traditional type of labeled data that allows for easy segmentation. You can segment using  industry-specific tags, from broad segmentation all the way to very narrow parameters, depending on your specific campaign or needs. 

Triggers on the other hand serve as a type of early warning system to alert users to the occurrence of events and changes happening in real time, that are indicative of a “need” for your services or products. “Triggers” give you a first-mover advantage  to dedicate marketing and sales efforts for a specific target or group of targets. 

The categories of different tags and triggers are almost as numerous as the companies they are used to monitor and assess, but the core idea remains that some fundamental change or event in the lifecycle of an SMB causes an alarm bell to ring, indicating the presence of a “need” or “ripe conditions” for more assertively engaging with prospective clients. 

The different types of triggers often overlap noticeably between industries, such as a business building a new website or adding a new language or currency to its eCommerce platform. Other types of triggers are largely specific to certain areas of operations, like an existing restaurant applying for a liquor license, or a brick-and-mortar retailer leasing or purchasing additional real estate, both of which can be strong early warning signs of an impending growth spurt. 

Tarci provides users with a unique and powerful advantage over traditional methods of data collection and analysis: up-to-date, accurate and actionable data – based on more than 3 billion data sets collected regularly from various online sources – provides users the intelligence they need to discover new, growing segments. The flexibility to choose when and where to dedicate resources by gaining a more accurate and timely understanding of the various players in the marketplace provides a distinct competitive advantage. 


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