Stuck in the Adoption Funnel: The Effect of Delays in the Adoption Process on Ultimate Adoption

Abstract:     
Many firms have introduced internet-based customer self-service applications, such as online payments or brokerage services. Despite high signup rates, these services have generally been unsuccessful in convincing customers to move most of their dealings with the firm online; few customers use them consistently. We investigate whether the multi-stage nature of the adoption process (an `adoption funnel') for such technologies can explain this low take-up. We use exogenous variation in delays in the adoption process, caused by vacations and public holidays in different German states, to identify the effect of being delayed in early stages of the adoption process on ultimate adoption. We find that delays in earlier stages of the adoption process reduce a customer's probability of moving to consistent usage. Our results suggest significant cost-saving opportunities from reducing delays in the adoption funnel.

Keywords: Online Banking, Technology Adoption, Adoption Process, Adoption Funnel, Online Security, Self-Service Technology

JEL Classifications: M3, M30, M31, L1, L16, L86

Working Paper Series