Where Do You Go Fishing?
Today, I spent spent an hour with a prospect discussing the merits of utilizing a score to help them prioritize their online orders that they were reviewing. In preparation – we showed how by using a score – we could identify the 10% of riskiest orders that had a 38% fraud rate and the least risky 10% of orders only had a 2% fraud rate. They mentioned that the score wouldn’t help, as they would still have to review all orders.
I asked if knowing that 38% of the orders were fraud in one segment and only 2% in the least risky segment would allow their fraud investigators to be more efficient in their investigation. The answer was a resounding “No”.
Unfortunately – this is not a too uncommon response. In the financial services industry, most have become accustomed to scoring to make decisions. However – in other verticals such as e-commerce, the notion of scoring is an all too unfamiliar thought. When pressed on why this knowledge wouldn’t help, the response was that it was because their fraud teams had better intuition and “gut” feel.
After the call, I couldn;t help come up with an analogy – related to fishing. I asked a colleague the simple question: “If you were out fishing for walleyes (I’m from Minnesota) and had to decide which spot to go fishing. The first spot was 15 feet deep and the fish finder indicated it was loaded with big fish. The second spot was 80 feet deep and the fish finder indicated there were no walleyes present (every good Minnesotan knows that walleyes aren’t in 80 feet of water).
So which spot would you choose? Of course – I think most, and certainly most Minnesotans would quickly ascertain that the first spot would be much more likely to be successful.
This is same thing as scoring. It’s all about finding the best fishing spots and avoiding those where success is minimal at best. In doing so, you can have a much more enjoyable day at the lake. Had to throw in that last one, as the snow is starting to fly and I am still holding on to my summer memories.