Charles Hogan knows what you like. Walk into a sandwich shop on your lunch break to pick up your daily turkey and provolone on wheat, and the moment your Visa card is swiped, he knows you’re not one for pastrami on rye. Hogan is chief executive of Tranzlogic, a Westlake Village data analytics firm that can harvest more than 150 identifiable attributes about you at the point of sale from credit card data. That includes everything from your culinary preferences to your age, marital status, annual income and discretionary spending habits. That’s all information that a business can use to profile and target its best customers with promotions and other marketing. “The potential with this is gigantic,” Hogan said. “If you can understand your customers, you’re going to see a positive return. Inefficiency is no longer tolerated in business.” Tranzlogic isn’t employed by brick-and-mortar businesses directly; rather the company works through credit card payment processing companies. To date, the company has two service providers in its client base: Signature Card Services of Los Angeles and Applied Merchant Systems of Oxnard. The two process transactions for more than 10,000 businesses, and Hogan expects to add about 10 more service providers this year, which could mean more than 100,000 retail businesses would make use of his data. “We’re preparing for what we know to be imminent in the pipeline,” he said. “This is all increasing at a rapid pace.” Hogan, who founded his business 18 months ago, is a small player in the growing data analytics industry, where tech giant IBM Corp. of Armonk, N.Y. has been a leader for years. IBM, long ago a leader in computer hardware, predicts that its revenue from analytics will reach $20 billion in 2015. It’s an industry that is growing along with Americans’ love of plastic, which people once reserved for large purchases but is now routinely pulled out of wallets for a cup of coffee at Starbucks or a burger and fries at McDonald’s. Indeed, restaurants and other retailers are often the biggest buyers of analytic data. “They can know who you are and how you spend,” said Darren Tristano, executive vice president at Chicago food industry research firm Technomic Inc. “This will let businesses truly understand their customers. That’s the Holy Grail.” Piecing it together Here’s how it works: Tranzlogic receives credit card numbers transmitted from the businesses employing its service. It then pairs the basic data provided at the point of sale, such as name, credit card number and item purchased – and runs them through about 10 databases, including one run by credit bureau Equifax Inc. of Atlanta, to identify characteristics about the cardholder. Hogan said his company gathers the data, removes personally sensitive information including name and address of the cardholder, and provides a report to the business. Merchants then access the service through a web portal that breaks down and organizes the data, classifying the customers that frequent the business most, including how much they spend and other characteristics. The basic service includes some of the more broad attributes, such as age, marital status and amount of discretionary spending. Hogan said this service helps businesses get a general sense of who its customer is. Tranzlogic also offers a “professional” service, which comes with additional information such as pin dots to profile local demographics as well as a map showing where a business’s best customers live. Merchants using the professional service also can create graphs by filtering the data by ZIP code or income level. Hogan said businesses have used the data to rollout various types of marketing campaigns targeted toward the demographic that frequents their business most. He said the information can be used for print and digital media alike. The cost for Tranzlogic’s service is relatively low. Hogan said charges are handled by the payment processing companies and total about $10 a month, while the professional service costs about $20, with Tranzlogic receiving a cut of that fee. Anush Amiryants, executive vice president at Signature Card Services, said the feedback she has received from businesses has been strong. Companies ranging from restaurants to e-commerce sites are employing the service. “It is still to be determined what businesses will benefit most from this, but it appears as though sales are improving significantly,” she said. Signature Card Services would not disclose the number of businesses or provide direct contact to any that use Tranzlogic. Street level Tranzlogic was founded in late December 2011, after it received $500,000 in seed money from Power Anderson Group LLC, a fund connected to the family that owns J.D. Power & Associates, the Westlake Village marketing information firm. Earlier this year, Tranzlogic conducted a private stock offering that raised about $1.5 million, with SJ Investment Co. of Santa Monica as the lead investor. The company has 10 employees at its Thousand Oaks Boulevard office. Hogan said the first iteration of the product was put on the market in December, and though he said business is picking up, the service hasn’t yielded big profits yet. “We expect to be cash flow positive in the next couple months,” he said. The company is intentionally charging a relatively low price for its service because it is seeking a mass of users, hoping that even small shops or individual restaurants will be interested. “We are taking this downstream,” he said. “Our objective is to make this information available to all types of merchants.” Contrast that to industry leader IBM. In February, the company contracted with Cheesecake Factory Inc. to offer its data service to the more than 175 restaurant locations the Calabasas company operates around the globe. The value of the contract has not been disclosed, but Cheesecake has said the service it is buying will help it track customer complaints about product quality so they can be addressed faster. Leslie Levesque, senior economist at research firm IHS Inc. of Englewood, Colo., said data analytics has been dominated by large corporations and bigger chains such as Cheesecake. She said 42 percent of all potential retail space nationwide is being leased by restaurants, making food service an area analytics will continue to target. However, until now, analytics has been too expensive for mom-and-pop businesses. But if small businesses can afford the service, Levesque believes it will fuel a fundamental change in the way businesses operate. “People are still figuring this out,” she said. “By no means have we even entered the potential of what this could be.” Wild West However, that potential has alarmed some. After all, consumers don’t expect that the personal information they leave behind with every swipe of their credit card will be gathered into a report for a business to market to them. And Tristano, the food industry consultant from Technomic, thinks the detailed digital footprint could scare off some customers from paying with plastic. “Listen, Big Brother is watching,” he said. “Some consumers may even consider going back to cash.” Even Rod Smith, vice president of emerging technology with IBM, doesn’t want businesses to know everything about him each time he pays. Smith is quick to acknowledge the power analytics wield, and said the industry is still in the “Wild West” stage. But he expects some regulations to follow. “Privacy is obviously a big concern,” he said. “There will be some control eventually, but it’s tough to predict.” Hogan argues privacy should not be a concern for consumers, but more a topic of discussion. He expects that various organizations, from credit bureaus to attorneys and eventually the government will weigh in on the privacy concerns. Nonetheless, he was adamant that Tranzlogic doesn’t cross any privacy lines with its analytics. In developing the service, Hogan said his company consulted with Morrison & Foerster LLP, the San Francisco-based law firm that represents Visa, as well as several credit bureaus, to ensure the legality of the product. Tranzlogic doesn’t run any credit reports on consumers, as that would require a social security number. All the information is in public databases, making Tranzlogic more of an aggregator. “We’re not telling merchants anything personally identifiable. We are serving up generalized data to help merchants understand their customers,” he said. “This will be a viable offering well into the future. There are no limits here.”