Forter clients experienced 229% ROI – from a combination of business benefits and cost reductions. That’s the finding of a commissioned TEI study from Forrester Consulting.
This impressive result comes from various directions, as Forter helps companies to solve a number of the issues they face when it comes to fraud prevention.
“They [Forter] are a company that is entirely about fraud management and fraud prevention. We are not, we sell products online. So, I know that they do better than we can.” ~ Head of risk management, online marketplace service firm
Below are the main problems the interviewed companies were looking to solve:
False positive results were too high.
A 5% false positive rate (as a percentage of all transactions) meant a steady stream of rejected but legitimate customers ― representing not just lost sales, but probably lost customers for life.
Chargeback costs were too high.
Chargebacks, accepted transactions that turned out to be fraudulent, were an accepted cost of doing business. The credit card issuer would request a refund but the merchandise was already shipped. However, when chargebacks exceeded 1%, after several months, credit card processing companies started to raise concerns.
Expanding to new markets was risky.
Organizations felt that the rules-based solution would result in too many declined transactions and included too many false positives. They were concerned that this would alienate too many customers.
Forter’s fraud prevention was the answer to all these problems.
“The fact that you would get a decision, yes or no, in real time really won us over.” ~ General manager, online retailer
Total transactions and total approvals grew with Forter.
Firstly, Forrester’s study found that Forter enabled more approved transactions. A part of this was achieved by dramatically reducing false positives (by more than 80%!). This kind of result can make a real impact on a company’s bottom line — an example of the value of accuracy in fraud prevention.
Improved customer satisfaction and fewer lost customers and lost sales were seen with the near-total elimination of false positive transaction declines.
Naturally, reducing false positives also improves customer experience. Customers are no longer mistakenly and insultingly rejected. This is important for customer satisfaction and the encouragement of repeat business. Additionally, the reduction in customer remediation costs — placating angry customers who had been rejected and sometimes compensating them with a gift card or discount — could be quantified and also made up a part of Forter’s ROI.
Reduced costs related to chargebacks and employee time spent on manual transaction reviews.
When it comes to reducing costs, Forrester found that “With Forter’s chargeback guarantee, chargeback costs are virtually eliminated” which dramatically reduces the cost of fraud for a business. Since Forter provides fully automated fraud decisions, much of the heavy cost of manual reviews was also lifted.
Forter enabled merchants to develop new markets.
Since Forter’s system is calibrated to be sensitive to the differences which distinguish commerce in different geographical areas, companies working with Forter were able to enter new markets and develop customers in those markets, knowing that they would be able to accept the good orders while blocking the fraudulent ones. With Forter, even customers from countries they had traditionally blacklisted such as Nigeria could be accepted.
What Am I Going to Get For My Money?
Forrester’s independent Total Economic Impact™ (TEI) methodology provides a rigorous cost and benefit analysis framework that explicitly incorporates an evaluation of future technology and business flexibility and associated risk.
As Forrester has pointed out, underlying any investment is the ever-present question of “What am I going to get for my money?” The objective framework of the TEI study gives companies an insight into the ROI provided by a vendor, and breaks down the different elements that go into the value so that companies can think about which are most relevant for them.
If you’d like to find out more about how Forter provided a 229% ROI for clients, download this executive summary now.
Or read the full study: The Total Economic Impact™ Of Forter’s Decision As A Service®: Cost Savings And Business Benefits Enabled By Fraud Prevention, 4/17.