Stuck in the Adoption Funnel: The Effect of Delays in the Adoption Process on Ultimate Adoption
AbstractOnline applications and services automate communications and transactions between firms and consumers, promising large efficiency gains. However, consumers have been slow to use these online technologies intensively, despite widespread adoption of the internet. Customers frequently undergo a staggered adoption process that may involve sign-up, experimentation, trial, and substantial usage until they fully embrace internet services. We ask whether delays in moving through the initial stages of this adoption process contribute to consumers ultimately not using the service intensively. Such behavior would be consistent with laboratory findings on consumer memory. We explore this question using data from a German retail bank where only 24% of the customers who sign up for the bank's online banking service use it substantially. We use exogenous variation in delays in the adoption process, caused by vacations and public holidays in different German states, to identify this effect. We find that delays in the early stages of adoption significantly reduce a customer's probability of moving to substantial usage: A 10-day delay of a customer's first online login reduces the likelihood that she will ever use the technology substantially, by 33%. This effect is more severe for demographic groups with less online experience.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 07-40.
Length: 39 pages
Date of creation: Oct 2007
Date of revision: Oct 2007
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Web page: http://www.NETinst.org/
patents; technology adoption; adoption process; online services; banking;
Find related papers by JEL classification:
- M3 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising
- M30 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - General
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-27 (All new papers)
- NEP-BAN-2007-10-27 (Banking)
- NEP-ICT-2007-10-27 (Information & Communication Technologies)
- NEP-INO-2007-10-27 (Innovation)
- NEP-IPR-2007-10-27 (Intellectual Property Rights)
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