Forrester Finance Forum 2008 – Last of Three Posts

Customer Expectations During the Online Application Process

This post closes out my series on the Forrester Finance Forum held in New York City on June 23rd and 24th, 2008. You can read part one here and part two here. I always walk away from a Forrester Forum with a rich list of insights. If I were to stop and try to characterize one benefit that attending a Forrester Forums gives me, its energize me to challenge the status quo.

Photo Credit: Steve A Furman

Brad Strothkamp, principal analyst at Forrester, presented Mastering Web Sales by Focusing on Shoppers’ Expectations on the second day. The stats are interesting and compelling. 40MM consumers applied for a financial service product online in 2007, and 50% of them were applying online for the first time. That’s significant, because most of us who design online applications do so with deep knowledge of financial products and how the systems work. We are also keenly aware of what we want as a business, which influences how applications are designed and coded. We are too close and too knowledgable. Consumers are seeing our application designs for the first time. Brad’s presentation caused me to step back.

He talked about how there are many missed opportunities, and if we got even a little bit better, we would be richly rewarded. His stats say that consumers appear to be happier applying by phone or in person vs. the web, despite all the work and time that has been put into creating online applications. We in financial services want everyone to apply online, but of course the reality is not everyone will. Consistent and systematic improvement is the goal.

I have seen a statistic from Jupiter Research that states, 50% of consumers who start an online financial services application have no intention of completing it. They are there to shop or learn more about products. I didn’t see this referenced in Brad’s presentation. I wonder if Forrester has come across this, if it was taken into account, and what they would say about it. Forrester takes questions on 3 x 5 cards that are passed to analysts during the talks. Questions are then asked in the room at the end of each session. I submitted this question, but it wasn’t asked.

Consumers have a set of expectations they carry across all channels. Clarity, anonymity (only give as much personal information as is absolutely necessary) and speed. But they hold the web to a higher standard. Convenience (can I do it all online?) and the desire to not be pressured score high with prospects. The online process must of course be simple, secure and transparent throughout. And consumers want a safety valve if things go wrong, meaning human assistance immediately. Firms need to balance having a lower cost for taking the online application with offering human help in case it’s needed. This is a maximize sales at the lowest cost problem that needs to be explored through testing.

Brad spent his time on human reported behavior as well as presenting some good and not so good real life examples that drove the point home. He did not touch on application form design, but design is critical to getting someone to the finish line. There are oh so many ways to design a form, but there are clear best practices. Here is a short slide show that offers some. Coupling Brad’s insights with web form best practices would be a winner.

I was a little surprised Brad didn’t address a growing trend on the part of consumers to consult the social sphere of information before completing a transaction. Clearly his focus was on the application process, but there is a very complex set of interactions now at play immediately prior to and perhaps even during this moment of truth. That would be the social community. Consumers trust companies less and their peers more. The traditional marketing funnel is losing power. I’ve heard Forrester talk about this, but was it wasn’t brought out here, probably due to keeping the talk focused.

I am seeing a lot of evidence that consumers research on company sites, then pause their shopping to consult the social sphere of information. Who else has this product? What are they saying about it? If it passes the test, a consumer will possibly return to the company site and proceed through the sales funnel.

Once they come back to the site, the basic requirement seems to be speed, as 46% of consumers expect to complete the application in 10 minutes or less. People want to do everything fast, even when it comes to complicated or critical financial transactions. And of course FI’s want it to happen fast as well. Convenience is not a feature of the channel, it’s an assumption, and more importantly, 57% of consumers expect to be using the product in 24 hours or less. Instant gratification for an instant society.

Financial services products have become very much a commodity over the last few years, which makes it more difficult for firms to find meaningful differentiators. Each company copies the other as competition for the credit worthy or wealthy has become fierce. We all chase the same customers for the most part, which elevates the application process to an extremely significant moment of truth.

One thing that is critical to remember to get dead on right is the product page. Although consumers say they want speed, they want the right product even more. This is where your product page comes in. It’s got to work hard and deliver on the key features of your product and why it’s better. No one is applying for anything without looking at the product page. Get it right.

Looking forward to the Forrester Consumer Forum in the fall.

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