Tealeaf: Visibility. Insight. Answers.

Friendly Fraud - The Best Defense is a Good Offense

Recently, I read an article in the Wall Street Journal about 'Friendly Fraud.'

Previously, I've written some documents about the many ways that our customers use Tealeaf data and services to help fight fraud -- however, I must admit that I hadn't spent much time thinking about a supposedly “friendly” form of fraud.

Wikipedia defines Friendly Fraud as:

Friendly fraud (also known as friendly fraud chargeback) is a credit card industry term used to describe a consumer who makes an Internet purchase with his/her own credit card and then issues a chargeback through his/her card provider after receiving the goods or services. When a chargeback occurs, the merchant will always be responsible, regardless of what the they did to verify the transaction. The challenge with friendly fraud is that there is no way to verify the authenticity of the transaction, which is in fact legitimate, because the consumer is the one that is not legitimate.'

According to the Merchant Risk Council, an association that counts leading retailers as members, The average retailer loses 1.1 to 1.5% of revenue due to online fraud.

While you could look at the monetary impact of exchanging crisp dollar bills for 99 pennies and rationalize the missing penny as a cost of doing business -- the potential impact is far too great to ignore:

• If you get too many chargebacks, the banks will take away your credit card rights. No credit cards, no online business. Game over.
• If you are selling a perishable commodity, i.e. an airline ticket, a chargeback costs you the goods and the revenue -- you can't recover the seat on the flight.

I don't see anything friendly about 'Friendly Fraud' -- or any other form of fraud -- so let's talk about how to take action:

1. You can't wait until chargebacks to occur to do something. You need to be proactive.
2. You are not alone, fraud is an industry wide problem -- participating in groups like the Merchant Risk Council and sharing stories and expertise can help.
3. In order to begin the process of slowing down 'Friendly Fraud', you need to record and monitor all online behavior. 

Visibility is the equalizer: Insight into the actions that are taking place

• You can't monitor what you can't measure.
• You can't solve what you can't see: from browser to purchase to shipped goods.
• You don't know what the blinds spots are

How can Tealeaf Help?

By capturing every single customer's visit (as well as the reaction of the site in response to the customer's requests), you have visibility into the complete picture and details of every single interaction so you can:

• Resolve customer disputes quickly and easily by having a permanent, archived and instantly replayable record of all critical online transactions (e.g., all trades, all purchases, etc.)
• Retain a complete record of every single interaction made by an online customer for ongoing audit and record-keeping purposes.
• Review and examine previous customer interactions without requiring technical skills or IT services.

The Payback is in the Playback

With visibility into the transaction you can immediately determine  whether to contest or not? Our customers long ago coined a “catchphrase" about our solution: “The payback is in the playback” –  in this use case, can you see whether the chargeback or disputed purchase is valid? In some cases, the customer is right – how do you know what the customer saw and did?

Don’t just review the order -- but their visits before and after. One of our customers allows their customers to buy and/or sell options on stocks. When they get an online dispute -- with the customer saying that they didn't know that they were trading on 'margin' -- they look at much more than the transaction itself -- they look at the previous online sessions and the follow on sessions. When they see that the customer checked the order status repeatedly -- and only after the market conditions soured -- that the customer complained -- they know who's telling the truth.

Identify Fraudulent Behavior Across Visits

Use forensics to find related sessions. Despite your best intentions, bad things will happen. You may get a chargeback from a particular user. With Tealeaf -- you can search for sessions not just by user name, but by phone number, IP address or anything in the session as a pivot. This allows you to find other occurrences that may have slipped through. You can also create rules to event on these observations in real time -- to add a loss prevention team.

• Use historical data to build/test data mining models, adjust. Since we record everything, the historical data can easily be parametrically extracted (i.e. via a search constraint).
• Review Orders (Loss Prevention). Some of our leading retail customers regularly review online orders prior to shipping to look for unusual patterns.
• Review all chargebacks -- sift. Look for common patterns and trends. Tealeaf enables really powerful ad-hoc segmentation, enabling you to look for anything that occurred during a transaction, or across segments of transactions. This capability to “pattern match” (without having to know in advance what you might want to look for)  allows you to quickly search for the sessions of any user with a chargeback, or all the sessions of any given user who claims a chargeback, to understand true intent, or their personal history with your company (i.e., is this a one-time event or a pattern of behavior), and also allows you to scope the extent of the issues, and associated dollars affected.
• Share -- Do you share 'bad people' profiles with your fellow merchants
• Document -- be able to cooperate with law enforcement – an easy to understand format – actual visualization is so much more powerful than log data, and tells the complete story. With Tealeaf, you can preserve individual sessions for prosecution.

The cost of prevention can't be more than the cost of the problem. At one extreme, you can prevent friendly fraud by disallowing online orders. Obviously, that wouldn't be a popular solution in today's world.

At the same time, any solution has to have a TCO that is well less than cost of the problem. Tealeaf supports variable archiving -- the ability to selectively preserve a percentage of sessions indefinitely -- i.e. keep all traffic for 30 days -- but keep all orders for 120 days.

This cuts down on the storage component costs -- while still yielding high utility value of the data.

In these uncertain economic times, the only certainty is that unscrupulous activity like 'Friendly Fraud' will continue. The best defense is a good offense, the time to act is now, and the best solution is visibility.

by: Robert Wenig, Founder and CTO

Success is... a customer that "gets it"

There are many stages to starting a software company. You need to have an idea, money, people, infrastructure. But the thing that you need the most are customers who “get it.”

Customers who “get it” not only fill your inbox with bugs and feature requests, they take your product and ideas and apply them in ways that you would never have thought of. And then you sit back and say “Cool” – because you realize that your ideas are truly having an impact.

Key Relevance Review of eMetrics: Hotels.com’s Joe Megibow Keynote
By Liana “Li” Evans
"I don’t know if I’ve ever seen a keynote be so insightful and revealing about a major internet website as I did when I attended Joe Megibow’s Keynote at the eMetrics Marketing Optimization Summit in Washington DC."

Hats off to Hotels.com for really "getting it".

-- Robert Wenig, Founder and CTO

The "V's have it" - Virtualization, Visibility and...

I was talking with a technology partner about what Tealeaf does and what our value is.  He stopped me cold with the observation “Virtualization and Visibility” – that’s what it’s all about.

Webster’s defines Visibility as:
1: the quality or state of being visible
2 a: the degree of clearness (as of the atmosphere or ocean) ; specifically : the greatest distance through the atmosphere toward the horizon at which prominent objects can be identified with the naked eye b: capability of being readily noticed c: capability of affording an unobstructed view d: publicity 2d
3: a measure of the ability of radiant energy to evoke visual sensation

In terms of Tealeaf, Visibility is the power to see your online customer each and every time they visit and interact with your site.

Wikipedia defines virtualization a few ways:
In computing, virtualization is a broad term that refers to the abstraction of computer resources:

• Resource virtualization, the virtualization of specific system resources, such as storage volumes, name spaces, and network resources
• Application virtualization, the hosting of individual applications on alien hardware/software
• Desktop virtualization, the remote manipulation of a computer desktop

While we’re not part of the first “V” – we are the leader in providing visibility for web applications.

Going against the grain here, I think that there’s another “V’ coming for us as well. Being the nerd that I am, I tend to email my wife instead of walking across the house to talk with her. In our family of 5, we have more computers than people.  Normally, our household computers are 2-3 year old technology built out of scavenged parts. For the first time in a long while, I bought a computer – in a box, at retail. HP slimline, Dual-Core 2.7 GHZ AMD with 4GB of RAM and 500GB SATA drive for $400. At this price, it’s too cheap to pilfer/scavenge/recycle. It came with Windows Vista 64. Admittedly, the first service pack was close to 400MB in size – but so far, I am impressed. It may be the hardware, it may be the ram, but I am liking what I am seeing with Vista-64.

So, time for V**3 – Virtualization, Visibility and Vista.

Focus on the Critical “Blind Spots” of Customer Experience

Five years ago, I was the business manager for a high-volume ASP.  We would meet every Friday to talk about went well and what didn’t that week.  Every week, some of the same comments would be made by someone in customer service, marketing, or management – things like “our conversion rate was down this week, and we need to investigate why that may be”… or “we’ve gotten a lot more calls from frustrated customers this week, so we’ve opened a bunch of trouble tickets, and need to ramp up our customer service group.”  It’s amazing to me how little information we had about these issues and it’s even more amazing that we were satisfied with how little information we had.  But, I guess sometimes you don’t know what you don’t know.  Most of us weren’t missing cell-phones in 1990 either.

Many new Tealeaf customers ask us “So, it’s great that we can replay any customer’s session – but which ones are we supposed to look at?”  That’s a great question – and answering it drives so many of the enhancements we’ve made to the product over the last few years.

We eat our own dog food at Tealeaf every day, and use our own products to understand what our web visitors are doing.  So, how do we see our customers?  Which ones do we look at?  Here are a few categories of customer sessions on which to focus.  I often recommend starting with the most critical categories:

• Find customers that are running into trouble
  Two core Tealeaf features, search and events, make this very straight-forward.  Think to yourself… what are a few things that happen when a customer is having a hard time on your site?  Perhaps they click on the “help” button, perhaps they receive an error or a “sorry” message, or perhaps they only make it one or two steps into a process and then abandon entirely.  Any one of these “classes” of customer sessions can be easily found by using Tealeaf’s search engine.  We make it a practice here to pull up at least 20 sessions each week of customers that fall into one of these categories.
• Find customers that are not completing your key processes
  All of our sites exist for a purpose (or many purposes).  Start by thinking about what those purposes are, and don’t be satisfied “not knowing” why some customers succeed and some don’t in achieving that purpose.  So, if there is a sign-up process – find a set of sessions that started the process but didn’t finish.  If it’s a retail site – find customers that started shopping, but didn’t check out.  Every week, I make every effort to view sessions where people aborted their mission mid-way.  Could we have done something better to keep them interested?   Tealeaf events were designed to help you find these exact populations of customers.  On any given day or week, it takes no extra work to pull up some of those sessions and see what happened.
• Any time we’re reviewing sessions – we incorporate Replay
  We’ll watch them closely, and take note of any patterns, making qualitative comments as we go.  When we want even more information, we can do 5 or 10 minutes of additional searching or analysis to really understand not only what happened to these customers, but why it happened.  Sometimes it’s really easy – perhaps a bunch of customers are using an ancient browser type that we’ve never tested.  Sometimes it’s a bit more nuanced – for example, these customers are just getting confused or having a hard time navigating content.  Either way, there is always something actionable and specific that comes out of it.  Maybe we need to fix a problem in the application logic in one place, maybe we just need to fix the wording on one specific form, or maybe we need to improve the navigation or usability.  But, the incredible thing about Tealeaf is that it shows us – for real – how these affect customers.  No guessing, no politics.  And, addressing these things, armed with information about what really happens out there, results in the ultimate outcome: a better site, and more successful customers.

To me, these are some of the easiest ways to know “what’s going on” on the site each week.  Each time we go through this weekly ritual, I think back to the old days, 5 years ago, when I had no idea what the real customer experience looked like.  It was all conjecture and stabs in the dark.  If we just the truth in front of us – the undeniable evidence of what really happened to our customers – those meetings would have been much faster and much more productive.  And more importantly, our site would have been much much better.

-- John Berkley, Director of Product Management 

The Big Hairy Churn Monster

How much time and money is spent today acquiring a new customer? Corporations often create elaborate promotions that include incentives that render the immediate acquisition unprofitable. Their hope is that the newly acquired customers will stay with them long enough to make them profitable. Quite a concept when in most cases customers will actually stay with their current product or service provider as long as the product or service meets the customer expectation and they are treated fairly, with respect, in a timely manner when things go awry.

Today, Tealeaf announced the next versions of our cxReveal and cxVerify product lines to address front-line service issues related to online customers. The genesis of these versions stemmed from the fact that customer churn and ongoing dispute resolution, respectively, are big issues that companies need to address. The next time one of their online customers contacts them will probably be their last time if they are not served well. One more service failure, especially in an environment where customers have already tried to serve themselves, and they are gone. The announcement got me thinking, are our current customers the “elephant in the room?”

I am continually amazed at how little emphasis is placed on customer advocacy in today’s corporate culture. When times were tough in the technology sector after the bubble burst, service budgets disappeared. Lean was the mantra of the day…more with less. What a mistake. And as the internet has continued to mature, companies have become convinced that by providing a self-service channel they are actually developing more loyal, profitable customers. Well I am here to be a voice of those customers, it isn’t working.

What companies need to do is place as much, if not more focus, on the service, as in “customer service”, that they are providing. And they need to do this for all channels of interaction. Why is it that…

•  The teller at my local bank branch doesn’t know that I have recently been looking at mortgage products online?

•  The travel agent that I am speaking with on the phone doesn’t know that I am currently looking at the flight options for the multi-leg awards flight that I am hoping to book?

Is this rocket science? I don’t think so. Leading companies today have recognized that a solution exists, and are making inroads, but the majority operate without acknowledging this key weakness.

In my opinion, companies that value their customers, and make investment in serving them well with a unified, cross channel service approach—and one that emphasizes the internet as a key component—will win. Otherwise the big, hairy churn monster will get them. After recently reading some children’s books at the local independent bookstore I thought that it might be a good idea to pen a CEO’s version of a picture book. The storyline would be a combination of “Alexander and the terrible, horrible, no good, very bad day”, “There’s a nightmare in my closet”, and “We’re going on a bear hunt.” It would rhyme nonsensically like a Dr. Seuss story and have imagery that mimicked Maurice Sendak’s works. I’m not sure what the title would be…maybe “The Big Hairy Churn Monster!”, or “No More Churning!”, or “Where Have All My Customer’s Gone?”, or even “Serve Ice, A Chilling Internet Fable.”

--Scott Jones, Product Management