Entrepreneurs

Council Post: How To Leverage Consumer Data To Navigate Uncertainty

By Heather Francis, owner and CEO of Elevate Funding, a Merchant Cash Advance provider.

Elevate Funding understands the importance of making informed underwriting decisions, which is why we have utilized historical industry data since our beginnings. This data focus has helped us determine portfolio risks and make adjustments quickly throughout the years.

However, when Covid-19 was at its peak and there was a lot of uncertainty in the world and the business finance space, we quickly realized that historical industry data was no longer beneficial to our underwriting process since many industries we ordinarily fund without hesitation were shaken up or turned upside down completely.

We also realized that we could not rely strictly on state mandates and closure statuses when making underwriting decisions. The most important metric during this time was really about the consumers of the businesses we fund. Were they comfortable shopping at this business during Covid-19? Was it worth the risk for them to spend money on this product or service? Just because a business was open and operating did not mean that its customers were making purchases. 

Ultimately, we realized that if our mission is truly to support small businesses — and it is — then we simply could not stick with our standard underwriting process, which was based on historical industry data. So we did what any data-focused, risk-conscious funder would do — we mobilized and began tracking consumer data in real time.

How We Leveraged Consumer Data

Our Manager of Corporate Strategy, Michael Gaura, spearheaded this initiative. During this time, Michael was responsible for analyzing geographical data and industry-specific foot traffic to track consumer confidence.

Michael explored — and continues to explore — a wide range of data sets to understand the evolving recovery. Among these data sets is OpenTable: Seated Diners, which evaluates seated dining for restaurants across the nation, and AWS Marketplace: Foursquare, which tracks foot traffic for multiple industry types, including retail, hospitality, gyms and more.

With these real-time insights, we adjusted our underwriting criteria and created a Covid-19 funding restrictions dashboard for internal and external customers.

Risk mitigation looked a little different for every company throughout Covid-19. For us, it looked like research, active monitoring, quick pivots and hard work. When I reflect on the past year — with all of its chaos and learning curves — I am most proud that we were able to continue funding and helping small businesses during a time when it was needed most.

Our ability to adapt was paramount not only to our success but to the success of many businesses throughout the course of the pandemic. During a time when many funders went under, we were able to grow instead, and our growth was able to benefit the 775+ small businesses we have funded since shutdowns began in March 2020.

How You Can Leverage Consumer Data

Bottom line — when the landscape shifts, your process and strategy must shift, too. We all know change can be difficult, especially in the midst of chaos and uncertainty, but try to remember that change goes hand in hand with growth.

Always keep an ear to the ground — it is important to know what is going on beyond your scope. All other industries have direct and indirect impacts on your industry. We are all connected, after all.

Mobilize your team to track the data that is pertinent to your company. There are numerous free data sets out there to take advantage of. Pull key insights day-to-day, week-to-week, and track them over time. This is an ongoing effort, and it can be cumbersome, but it could make or break your company, or at the very least give you a competitive edge in the current landscape.

Monitoring consumer data and adapting your process is not only important — it is the way forward. We are still learning, just like the rest of the world, but I feel confident that the team at Elevate is informed, nimble and up for any challenge. And with these suggestions, you can feel confident too.

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