Account Verification: A Forgotten Source of Customer Churn

Customer churn can happen early — even before checkout

Central to transforming the user experience is removing the friction involved in account creation verification. It’s the first step of the customer journey — before the customer is actually a customer — and often an overlooked source of churn. The Deduce team has seen cases in which companies signing up tens of thousands, or millions, of new users per month have lost 10 percent of these accounts due to email verification problems alone (verification emails landing in spam, issues with mobile email apps, etc.).

Track the lifetime value of those thousands of customers over time, not to mention the negative brand reputation accrued, and the damage is significant.

A new report from CMO Council, comprising 2,000 consumers from the US, UK, Canada, and Ireland, shows just how fed up customers are with frustrating authentication processes. Here are some notable takeaways:

• More than 60 percent of consumers surveyed had canceled a transaction due to inefficient authentication
• 81 percent of respondents indicated they would seek out companies that employed an easy and secure identity verification process
• 34 percent preferred to use biometrics as a primary means of authentication; 10 percent preferred to use passwords

As for brand reputation, most respondents (53 percent) reported that login problems were a substantial detractor, and an overwhelming majority (85 percent) indicated they look down on a company with identity verification issues. This specifically rang true for banks, credit providers, mobile payment apps, and other types of financial services.

There is a way to eliminate this account creation friction. Deploy an identify fraud solution such as Deduce that can provide trust signals on each new account creation in real time. If the new customer is designated as trustworthy, take them down the Trusted User Experience journey to your application or service. If the solution determines potentially fraudulent account creation activity, route the user down the traditional path.

Here’s an example of a frictionless returning customer experience. Let’s say a fraud prevention solution flags potentially fraudulent activity when a customer, who’s attempting to use their saved credit card info, logs in to a new device to book a dinner reservation. The application, in this case Resy, a restaurant discovery platform, verifies the customer’s identity through the following steps:

• First page: Enter email
• Second page: Enter phone number
• Third Page: Resy sends a text message with a code
• Customer enters code and accesses the application

This is a brand that really cares about customer experience and wants to minimize steps/friction. At no point is the customer asked for their password.

Like Resy, other brands are upping their game in the user authentication department — Gartner expects more than 60 percent of large enterprises to adopt passwordless login by 2022. ​​But passwordless isn’t perfect: devices can be stolen, biometrics can be spoofed, and hackers will inevitably adapt to new authentication tools by way of SIM swapping, intercepting SMS messages, biometric database leaks, and other methods. To avoid customer churn caused by sluggish account verification, and thwart account takeover fraud, companies must ultimately simplify account verification via identity intelligence: a contextual, data-driven solution that can confirm a user’s identity in real time.

Click here to try Deduce for free and keep your customers moving with real-time identity verification.