Reducing Application Abandonment Rates
Many financial institutions have some portion of their application process online, but in reality, it’s often confusing, tedious, and a lot of work for customers to complete. It’s akin to a consumer walking into a retail store, filling up their shopping cart, and walking out the door without buying anything─a lost opportunity for acquisition and revenue.
Measuring Friction During the Application Process
One of the major problems with reducing friction, or effort, in digital transactions and digital customer acquisition, is it’s tough to know where to begin and exactly what needs fixing. The ideal solution is to quantify the amount of effort in a transaction, although most marketers would probably shake their heads and say that’s impossible − friction is an intangible that can’t be measured.
The good news is there’s a new game-changing metric for measuring friction in your digital transactions called the Transaction Effort Score. With it, you’ll be able to quantify exactly where transactions are causing your customers effort and pinpoint how to fix them. You’ll be able to strategically focus on measuring results rather than merely adding tasks to your to-do list that might improve your customers’ digital transaction experiences.
Quantifying Friction with the Transaction Effort Score
The Transaction Effort Score measure analyzes all the small hurdles required to complete a digital sales transaction, such as a loan application or account opening, and generates a “score.” This score can then be used to identify specific areas of improvement in your online sales transaction processes, such as eliminating unnecessary fields or implementing a 100% digital experience.
Financial institutions are successfully utilizing the Transaction Effort Score measure to reduce friction in their application processes. For example, a mid-size Australian bank sought to improve its 18% credit card completion rate. The application process was analyzed and received a TES of 1064 along with specific suggestions for improvement. After one week, the application experience was redesigned, resulting in a TES of 307 (lower scores are better as it indicates less customer effort is required) and a completion rate of 38%─more than double the previous rate.
Factors Analyzed by the Transaction Effort Score
A Transaction Effort Score takes into account many factors that contribute to effort in the application process including:
- How many keystrokes are required to complete a field?
- Is the required information something a customer quickly knows (such as phone number) or something they’ll need to look up (such as their driver’s license number)?
- Does the transaction experience support mobile responsive design?
- Can supporting documents be submitted electronically or must they be submitted in paper format via mail or by visiting a branch office?
This is just a small sampling of the elements analyzed by TES that contribute to effort. Multiple keystrokes, confusing interfaces, requiring customers to visit your office in person to complete a transaction, or asking for extraneous information all contribute to effort and increase abandonment. With TES, you’ll know where to start in removing friction from your application transactions.
Making a Measurable Impact on Application Completion Rates
The Transaction Effort Score opens up a world of new possibilities because you’re now able to understand exactly what’s getting in your customers’ way of completing transactions – and what’s working well. Many financial institutions realize a measurable impact on their TES and completion rates just by making a few simple changes, such as removing extraneous fields or making data entry more efficient. A mid-size bank experienced an 111% improvement in their TES and loan applications’ completion rates surged 150% when they understood where to improve their digital application and overall digital customer acquisition process.