How many of your customers churn when you ask them for financial information to perform affordability or source of funds checks?
50%? 60%? 70%?
We’ve heard all those numbers, and a few that are even higher still. That’s a lot of customers to lose. Sorry, let me rephrase that:
That’s a lot of your very best, most valuable customers to lose.
In fact, for larger operators we could be talking hundreds of millions in lost revenues. That’s a big problem in anybody’s language.
Where do those customers go?
Well, there are a number of things that could be happening when a potentially valuable customer refuses to engage with an enhanced due diligence (EDD) process. But these three cover most of the bases:
Here’s the thing: although it is impossible to be certain, I would make an educated guess that the majority of EDD churn comes from users in the last group. Certainly, the majority of avoidable churn does.
What does this mean?
It means that if you can make your EDD process easy, secure, and fast for your customers, you stand to end the merry-go-round and become the permanent operator of choice for the most valuable customers in the sector.
What does ‘easy, secure and fast’ mean in reality?
It means the customer selecting their bank, scanning a QR code and confirming they are happy to share data - in the knowledge that they can withdraw that permission at any time.
It means being able to tell a customer the entire process, including a decision, can be completed in minutes.
It means giving the customer a path of least resistance - with nothing to question or be hesitant about.
And it means reducing churn rates at EDD.
Do the math.
If a typical EDD customer has an LTV of £10,000 to your business and 5,000 customers a year go through the process, reducing your EDD churn rate from 50% to 40% nets £5,000,000.
In summary, it means keeping the regulator happy whilst getting a whole lot better at allowing people who can afford to spend money to do just that. And any operator that can do both of those things is well on the way to success.
If you’d like to see what happens to your EDD churn rate when you too make EDD ‘easy, secure and fast’, why not talk to us today.
We’re happy to put it to the test if you are.