Balancing a Positive Customer Experience and Friction

I recently stumbled on an interview between Louis C.K. and Conan O’Brien where the comedians are bemoaning the sense of entitlement that people feel for things that only came into existence “10 seconds ago”. Louis uses air travel as an example:
“Flying is the worst one because people come back from flights and they tell you their story and it’s like a horror story…They’re like, “it was the worst day of my life. First of all, we didn’t board for 20 minutes and then we get on the plane and they made us sit there on the runway for 40 minutes.” Oh really, what happened next? Did you fly through the air incredibly like a bird? Did you partake in the miracle of human flight, you non-contributing zero?”
The conversation is obviously tongue-in-cheek, but the reality is, technology has dramatically raised the expectations of consumers. I’m as bad as anyone—last week I screamed at Siri for misunderstanding my request for directions. Most of these frustrations are first-world problems from the consumer’s standpoint, but in the competitive landscape of technology, where growth is king, they can drastically impact a company’s ability to capture market share and retain customers.
Luckily, as a Strategic Account Manager for Ekata, I’ve been fortunate enough to work with customers that are extremely skilled at building products that exceed consumer expectations. I partner with our customers to discuss ways that ultimately improve the customer experience. Below are three areas that are commonly addressed:
1. Develop multiple “sign-up flows” for account creation
Not all account creations are legitimate and not all sign ups are created equal. Some of our customers allow all users to sign up with minimal friction but throttle their ability to transact based on the degree of risk. For example, for riskier sign ups, they set low limits on the amount that users can initially spend, place all transactions in a holding queue for manual review, or ramp up the identity verification requirements over time (e.g. after the second transaction, require SSN verification). This minimizes the damage from bad actors and adjusts risk tolerance for good customers as new business intelligence rolls in (e.g. behavioral and transactional data).
I partner with our customers to discuss different ways to approach new account creation. Based on the data that’s captured during account creation, users can be routed through different funnels that optimize for your business priorities. As a simplistic example, let’s say you have a mobile app that captures a user’s name, phone number, and email, and you want to balance signup fiction with identity verification. Here are 3 different user signup “pathways”:

  • Happy path: if you determine that the user’s name matches the phone subscriber name and registered email name, allow the user to begin transacting immediately
  • Not so happy path: if you determine a match between user name and email, but not user name and phone number, route the user through a secondary, light-weight verification step before allowing them to transact (e.g. two-factor authentication). If they fail secondary verification, proceed to path #3
  • Last chance path: if you can’t determine any matches between the name and the phone or email, or you cannot pass the user through a secondary verification step, provide them a customer service phone number so they can call in and be manually verified by someone on your team

2. Know your tolerance for bad outcomes

If you operate in a regulated industry, compliance requirements are hard and fast—when a user shows up on an Office of Foreign Assets Control (OFAC) watch list, you simply can’t transact with them. But some bad outcomes, such as fraud, are a tolerance that’s based on your appetite for losses, automated and manual review, and customer friction. Understanding the costs associated with these variables is the only way to effectively optimize profitability and customer experience. For example, how much does it cost you to let through a bad actor? What about rejecting a good customer? How often do these outcomes occur? How much does it cost to manually review a customer? What’s the lifetime value of a customer? It may take some time and energy to get these kinds of baselines in place, but it’s the only way to accurately measure the impact of changes to the user experience.
3. Give customers an alternative to rejection
Rather than dropping risky sign ups, leads, or orders on the ground, consider giving customers that “last chance” pathway to transact. Whether this means training a team of skilled agents to handle account remediation calls, allowing users to transact in a monitoring state that restricts their access to your product, or using third-party data providers for document verification, biometric analysis, or linkage-based data verification—it’s usually worth going to the extra mile in the pursuit of lifetime customer value. Lastly, as a consumer, remember Louis C.K.’s words the next time you’re getting ready to slam your laptop closed due to slow in-flight wifi or lodge a complaint with your ride-sharing app—“would you give it a sec to get back from space?!”
Learn how a layered approach can help identify good customers.

Start a Free Trial

See how Ekata can reduce fraud risk for your business, contact us for a Demo.