How Payment Processors Can Gain Visibility Into Opportunity Size

In late 2021, a customer we’ll call Mariel missed her goals by 20%.

Mariel is a VP of Customer Success at a company that provides payment processing and other services to merchant accounts. Her problem? She was seeing a decline in processing volumes across several accounts.

Was an economic slowdown to blame? Were her accounts beginning to switch over to a competitor? It was impossible to say with the visibility she had. Mariel wasn’t able to explain to her boss why the declines were happening, or to suggest a concrete action plan to fix the issue.

Miguel, another customer working at a merchant processor, faced a different problem. Miguel oversaw 10 relationship managers covering 1,000 merchant accounts. Miguel wasn’t confident that his relationship managers were prioritizing the right accounts each quarter.

Miguel needed a way to help his relationship managers prioritize their time on the merchants where they could have the biggest impact: not only the accounts that were at risk of churning, but also those with the highest growth potential.

Though Mariel and Miguel appear to have different problems, they both are in need of the same solution. It’s a concept known as “total opportunity size” (or share of wallet, share of spend, share of business, share of purchases – depending on the context). And figuring it out is key to expanding and prioritizing your existing customer accounts.

• Mariel needed to understand the full processing volumes at her customers  — the “denominator” of business activity for a particular customer.
• Similarly, Miguel’s team could better prioritize accounts if they could understand how their share of business compared to the total potential revenue at each account.

What is total opportunity size?

Total opportunity size is an umbrella term to understand how big of a business opportunity a customer or prospect might represent. Opportunity sizing may take many different flavors.

For many service or software providers, opportunity size is understood as total wallet size — how much a company is willing and able to spend to solve a particular problem.

For merchant or payment processing companies like Mariel’s or Miguel’s, opportunity size usually refers to the total processing volumes or total gross merchandise value of a merchant.

Why is understanding total opportunity size important?

Total opportunity size is critical to understanding how much room there is to grow with a merchant. Clarity here can be powerful for a variety of business decisions:

• Prospecting: Understanding the revenues and processing volumes of an account enables Marketing and Sales teams to more effectively segment their target database. Opportunity size can be a key input into lead scoring and Ideal Customer Profile (ICP) targeting, improving ROI on campaigns.
• Prioritize the Customer Success team’s time: Based on accounts’ upside potential, you can better prioritize how your Customer Success team allocates their time. Some companies create account scoring models to reflect this.
• Inform strategy: From a strategy perspective, understanding total opportunity size with customers gives you clues about your product or services’ relative performance and potential across regions, territories, divisions, or product lines. This can help guide how you should best allocate resources.
• Guide product decisions: Opportunity size can also guide your decisions around product investments. Based on where opportunity size is high but your penetration is low across an entire sub-vertical, you might decide to increase spending on innovation and new product lines and features to gain share of wallet.
• Benchmark sales performance: For Buy Now Pay Later (BNPL) companies, visibility into total opportunity size can also help benchmark performance for salespeople across territories. If you know upside potential across accounts, you can understand the performance of different territories and assign performance comps appropriately.

Why is it hard to determine total opportunity size?

Total opportunity size can be tricky to calculate because many companies lack the right data.

Total revenue figures for private companies aren’t readily available, or at least haven’t been available historically.

Often, companies will try to gather this information manually. Team members will ask about total processing volumes during sales calls or integration calls, and then enter that number into the CRM. The problem is, this intel may quickly go stale or could be inaccurate to begin with. And that kind of manual process doesn’t scale effectively.

Another common approach is to look at proxies of business size that are easily observable. For example, headcount may be used as a proxy for the size of the revenues or budget a business has. This type of approach can give a directional indication of whether one business on average is expected to have higher processing volumes than another, but it can’t predict the specific processing volumes of a business within any reasonable range of error.

What kind of data can help me understand opportunity size with customers?

The good news is that there are now sources of data that provide visibility into the revenues of any business that accepts credit cards. With Enigma’s Merchant Transaction Signals, you can see the monthly revenues and growth trends of more than 16 million card-accepting merchants.

Credit and debit card transaction data is a merchant’s financial footprint. And with the increasing adoption of credit and debit card payments, this data has become a valuable tool for gaining an accurate understanding of total opportunity size — quite possibly the best available proxy for total revenue and trends for most Main Street businesses.

We partnered with Miguel to see how Enigma’s card transaction data could help him figure out where to prioritize his account managers’ time.

By introducing credit and debit card transaction data to his account intelligence, Miguel could see clearly his company’s share of wallet at each account and trends in total processing volumes at each account.

Miguel decided to prioritize the team’s time on two kinds of accounts:

1. Accounts where his company’s market share was dropping
2. Accounts where total processing volumes were rapidly growing

In the following months, Miguel’s team was able to see which accounts needed their attention most and spend their time accordingly. Churn dropped and processing volumes grew, enabling the team to hit their goals.

Understanding total opportunity size can help guide strategy, better allocate customer support and account management resources, and proceed with confidence as you prioritize accounts for expansion.

And at a time when we’re all doing more with less, tools like credit and debit card transaction data can offer intelligence about opportunity size at scale, far outperforming one-off, manual methods.

Learn more about how card transaction data is giving go-to-market teams an edge: get the guide.