Research: Despite Abandonment Rates, Opportunity Exists to Get Consumers to Complete Online Applications

Research regarding online applications and abandonment rates has netted some interesting results. Conducted within the past few years, the results offer valuable information that credit unions can use to their advantage, including the following:

• Seven out of ten consumers who abandon online financial applications could be persuaded to complete them online
• Half of online financial application abandoners had no intention of completing application

Study 1: Seven Out of Ten Consumers Who Abandon Online Financial Applications Could be Persuaded to Complete Them Online
In September 2006 Compete, Inc. announced the findings from its research, "Financial Services Providers: Creating New Relationships Online." One of the key findings was that “while 14.2 million consumers start an online application each month, only 4.2 million complete the application online.” The study was conducted by Compete, a unit of TNS Media that delivers digital intelligence that helps the world’s top brands improve their marketing based on the online behavior of millions of consumers. Compete conducted the study to learn:

• Why consumers abandoned the online applications—even though they had been motivated to start them
• How companies could encourage more of these consumers to complete the process – After all, if many of those who abandoned the online application process still thought that the online app was more convenient than other application methods (e.g., phone, in person) then perhaps these people could be convinced to complete the application online.

The study revealed that “online applicants who abandoned the process identified a lack of transparency in the application process, concerns over security and privacy protection and a poorly designed online experience as the top three reasons for online application abandonment.”

Study 2: Half of Online Financial Application Abandoners had No Intention of Completing Application According to a study conducted by comScore, Inc. and Forrester Research, Inc., 54 percent of online financial product applicants abandon applications prior to submitting them. The study, based on behavioral data from comScore’s panel of more than 2 million people worldwide, plus an email survey of 568 applicants who had abandoned an application for a financial product online, examined consumer motivations in abandoning applications for online financial products, including checking accounts, savings accounts, credit cards, auto insurance, brokerage accounts, mortgage loans, home equity loans, and personal loans. The results were announced in September 2007. The top reasons cited by those who did not intend to complete the application included:

• Wanted more product information (23 percent)
• Not ready to apply (19 percent)
• Wanted to see if they qualified for the product (14 percent)

The study also examined some of the reasons why these abandoners chose not to complete the application online. Those who started an application with the intention of completing it, but who ended up abandoning the application cited the following reasons for not completing the application:

• Changed their mind about applying online (12 percent)
• Had privacy/security concerns (11 percent)
• Wanted to speak to a sales person regarding the product (11 percent)

What Do These Studies Mean to Credit Unions?
These findings represent an excellent opportunity for credit unions that post online applications for membership/savings, credit cards, or loans. According to Compete’s findings, “Financial services providers have a tremendous opportunity to persuade and influence those consumers most engaged in the buying process, but not yet sold—those who start and then abandon the online application. Less than a third of all abandoners outright reject the online path, meaning that savvy marketers still have an opportunity to persuade 70% of abandoners to complete the application online.” In short:

• There’s a market for online applications.
• If you use online applications, be sure they are easy to use and secure.
• Clearly state your criteria for qualifying for products and services on your Web site. If your members or potential members are interested, make it easy for them to see if they’re eligible.

Also, you might want to use a secure online chat service to assist people who seem to be taking a while completing an application. Some online chat services, such as Boldchat, enable you to monitor visitors to your site and invite them to chat. Or, simply having the chat option available near the application (without inviting them to chat) is a good choice; that way the member can click the icon to chat if they need assistance.