eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01 in Community Help Boards in Community

This topic is locked - uploads are not allowed.

Last Post Nov 1, 2007 12:02 PM by: deirdre@ebay.com

Replies: 49

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Oct 25, 2007 11:50 PM

Report

Topic: eBay Workshop: Managing Risk by Analyzing Customer Behavior

Host: PayPal Staff
Date: Thursday 11/01
Time: 11:00 a.m. to 12:00 p.m. Pacific time
Location: Workshop Board

Description: Please join members of the PayPal Risk Operations Support team in a discussion on how getting to know your customer can help manage and mitigate the amount of risk inherent with online transactions. Statistics show an upward trend in online revenue losses due to fraud, demonstrating the ever-increasing importance of managing your risk. How a business balances the risk of loss, against the rewards of higher profits is different for everyone. PayPal is here to help you reduce your exposure to risk and provide advice that has proven itself useful time and time again. The Topics of discussion will include: Tracking and Analyzing Customer Behavior, Building a Buyer Profile and Determine Risk versus Reward.

Cheers,

Deirdre
eBay Community Development

.lw-paginator-jump { display: none; visibility: hidden; } Pages: 4 - [ 1 2 3 4 | Next ]

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:50 AM

Report

Hi everyone and welcome to today’s workshop. My name is Cheryl and I am with PayPal’s Risk Operations Support team. Today, I’m joined by fellow members of my team, Mary Jo and Jeremy. During today’s workshop, we’re going to answer your questions and suggest ways to get to know your customer. Of course, since every business is unique, we recommend that you adopt the practices and tools that best fit your business.

Thanks for joining!

Every business, whether it’s brick and mortar or online, deals with risk on a daily basis

Online fraud is on the rise and takes many forms, so your strategies must be tailored to your specific situation.

How a business balances the risk of loss, against the rewards of higher profits is different for everyone. There’s no single right answer when determining your own plan.

Additionally, there is no way to insulate your business completely against risk; however, PayPal is here to help you reduce your exposure to risk and provide advice that has proven itself useful time and time again.

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:50 AM

Report

Statistics show an upward trend in online revenue losses due to fraud, demonstrates the ever-increasing importance of managing your risk.

Not only do we all face cases of fraud from North America, but, fraud cases are reported as having been perpetrated by individuals or groups all over the world.

For more information, see the FBI and NW3C Annual Report here:
Link

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:51 AM

Report

Tracking and Analyzing Customer Behavior:

A buyer profile can be a great tool to help spot trends or patterns outside the norm of typical transactions.

Taking some simple elements leveraged across numerous transactions allows you to get a snapshot for what you would consider an average transaction.

Some elements that could be reviewed include:

Average purchase amounts

Typical customer purchases

Any special requests that your customer may have

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:52 AM

Report

One of the first things that you will do is decide what information will be beneficial to you to develop a clear picture of your average buyer for your business.

Next you will compile the information that you need using your available PayPal resources to ‘Build a Buyer Profile’.

To create a buyer profile, and determine your customer base, you can begin by taking a look at historical transactions.

A PayPal tool to help you establish your buyer profile:

After logging in to your PayPal account you can click on the History Tab

Set the sorting dates for a complete month that had a good volume for your business, and click on the link ‘Download Log’ You will want to download this log into a ‘tab-limited’, ‘excel format’.

From here, you can determine what data is important to you.

Some types of information that you may want to capture and keep record of are:

Customer Name
Repeat Customers
Average Price
Date of Order
What was ordered? (May prepare you for the different seasons and building stock of items needed)
Individual customer requests
Destination or Address
Shipment Type

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:54 AM

Report

Once you have received your “Download Log”, you will review the columns of data and start compiling your information.

One important piece of information is your average transaction amount.

Column heading ‘Amount’: Total the amount of all the transactions for the month and divide those by the number of payments received (verified under the ‘Type’ column). This will give you an average payment amount for your buyers based on one month of volume. (Note: you may want to remove any one-off transactions that are very large and would change the average of your sales in an incorrect determination of the normal business)

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:57 AM

Report

Your next steps depend on what information you deemed as important to capture concerning your business. For example the next may be the “Name” of your buyer. You can determine how many times the same buyer purchases from you as a repeat customer.

Highlight the entire column and click on the AZ  icon in the tool bar to alphabetize the list of buyers to determine how many repeat buyers you have had.

Note: You can repeat this process of the average amount of purchase and repeat buyers for each month, keeping an accurate accounting of these specifics.

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:57 AM

Report

Focus on what information you want to capture and look for the sources:

Options: You can add to the excel spreadsheet that you download OR you can create a separate spreadsheet filtering the information that is important to Your Buyer Profile

Other information that is available in the Download Log besides the Customer name and Transaction amount are:

Shipping Charges and destination.

Transactions that may have had issues or losses. You may want to add a column to red flag any. This can add to your overall decisions on locations that you may not want to do business with.

NOTE: Please Consider that your average transaction may change over time as your business grows; or could fluctuate based on seasonal demand for certain products or services. Check your profile frequently to spot emerging trends.

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:58 AM

Report

Your Buyer Profile

Set parameters by these averages and information that you have compiled to decide what risks that your business can afford to take.

Manually or Automatically have your system set up a process to verify orders that are outside of your parameters of business. For example: International business parameters?

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:58 AM

Report

Monitor your buyer’s activity and information:

Look for a confirmed address on the PayPal payment. (PayPal will display a confirmed address if we validate that the buyer has their Credit Card statements mailed to this address)

Check the transaction details for SPP “Eligible” and “Ineligible”
Set up automatic notifications of not only payment, but shipping and tracking to communicate these to the buyer

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:58 AM

Report

Managing Risk:

We covered how to determine an average transaction as well as techniques to review buyers on a transaction-by-transaction basis. You may be exposing yourself to risk if you complete a transaction that falls out of the parameters you’ve established in these areas.

Also, keep in mind that a transaction that falls outside of the parameters you’ve met doesn’t automatically mean the customer is a risk. Following up with a potential customer can help you make a determination on whether to complete the sale.

Information from past transactions that resulted in business loss of funds may warrant follow-up with a customer (or not completing the sale):

For example:
Email addresses
Shipping addresses
Phone numbers

Look for Unusual activity that is outside of “normal” behavior for the user. Develop profiles and investigate inconsistencies

Have a set daily process for analyzing and filling your orders.

While growth is the ultimate goal for businesses, during periods of rapid growth, it’s important to keep track of key details that may be overlooked. These types of details may be important when authenticating transactions.

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:59 AM

Report

Review Shipping Activity:

All of the tips, thus far, have been proactive ways of managing risk, prior to delivery of the item. Once the item is out the door, you can’t “undo” the person receiving your merchandise.

Prior to shipping, here are some unusual requests that may require following up with the customer for confirmation:

Expedited shipping requests for big ticket items (Remember, money’s no object if you’re using someone else’s financial info.)

Conflicting Payment & Ship To addresses (For example, a payment address in Florida with a shipping address Overseas would require further investigation)

And last of all; be aware of shipping requests to multiple addresses

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 10:59 AM

Report

Risk Versus Reward:

Take some time to consider the following risks

What is the maximum transaction dollar amount allowed without additional verification?
Have you checked all elements of the buyer profile and transaction details for unusual activity?
Are there historical problems with this buyer?
Is this an international purchase?
Does the buyer have a confirmed address?

Some very successful businesses won’t ship to a buyer unless they are at a confirmed United States address; however, other top sellers have decided that they will ship anywhere in the world when they receive payment.

The point here is that you can be successful however you choose to manage risk.
There’s no right answer in determining your own risk vs. reward formula. It may very well change over time.

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 11:00 AM

Report

Putting it in Action:

Using the advice we have discussed, you can determine a risk/reward formula tailored to your business.

Once you have determined if the amount of calculated risk seems unacceptable, there are steps you can take to help alleviate some or all of the risk.

For example,

You can Request additional verification from the customer

You should try to determine if the item should or should not be shipped at all

It is often helpful to contact PayPal to request additional information about the transaction

You can refund the buyer immediately. Not only can you refund the full amount, you can also issue partial refunds to buyers.

eBay Workshop: Managing Risk by Analyzing Customer Behavior - Nov 01

Nov 1, 2007 11:00 AM

Report

The Importance of Communication:

So, you’ve received your payment and the package is in the mail. The transaction is now complete, right?

Wrong! Buyer complaints that can result in chargebacks can occur if the buyer feels like you have not properly relayed additional information back to them or addressed post-shipping concerns.

The difference between a one-time buyer and a repeat customer can hinge on good follow-up.

Some tips to improve your communication with your customers include:

Communicate with your customer until the order is received and confirmed
Be sure to provide your customer with a tracking update. (This helps avoid issues when the shipping time is longer than normal.)
Ensure your customer is aware when credit or an exchange will be received if necessary.
Lastly, maintain a follow-up procedure for customer service issues until your customer is satisfied.

Page: of 4

.lw-paginator-jump { display: none; visibility: hidden; } Pages: 4 - [ 1 2 3 4 | Next ]

Information Central

Welcome to the Workshop Board!

Educational Areas of Interest

New to eBay? These courses will give you a quick overview of how eBay works, how to register and how to buy with confidence. Get started with these free tutorials

How to Buy These courses will cover the basics of searching, buying and paying for your items.

How to Sell - These courses cover how to create a sellers account, sell an item, accept online payments and keep track of all your selling activity on your own My eBay page.

Increase your Sales - These lessons will help you take your eBay sales to the next level - covering marketing, optimization and eBay Stores.

Worldwide Brands eBay Workshop collection by Colette Marshall (free eBook)

Be sure to check out Lisa Suttora's (whatdoisell.com) Product Trends 2008 Report

For more details about the upcoming events, as well as an archive of past workshops, please click here!

The Chatter - eBay's official Community blog for interesting posts by and about our members and staff.

Visit our

eBay Education page! eBay is excited to bring you an expanded menu of educational tools and opportunities--from online tutorials, to recorded seminars, to eBay University classes offered around the country. Check it out!

Please see The eBay Marketing Announcements Board for details about any of the topics listed below, and The eBay System Announcements Board for system updates and information!

New to eBay Boards? Try a visit to our Community Discussion Boards Help and Welcome Center .

Want to visit another board? You can view our Community Overview Page or select from these lists:

Community Help Boards:

Category-Specific Boards:

Feedback Forum | Discussion Boards | Groups | Answer Center | Chat Rooms | Community Values

About eBay | Announcements | Security Center | Resolution Center | eBay Toolbar | Policies | Government Relations | Site Map | Help

Copyright © 1995-2009 eBay Inc. All Rights Reserved. Designated trademarks and brands are the property of their respective owners. Use of this Web site constitutes acceptance of the eBay User Agreement and Privacy Policy.

eBay official time

hosted by LiveWorld