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

Anja Lambrecht (), Katja Seim () and Catherine Tucker ()
Additional contact information
Anja Lambrecht: London Business School, http://www.london.edu/facultyprofiles.html
Katja Seim: Wharton School, University of Pennsylvania, http://bpp.wharton.upenn.edu/kseim/

No 07-40, Working Papers from NET Institute

Abstract: Online 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.

Keywords: patents; technology adoption; adoption process; online services; banking (search for similar items in EconPapers)
JEL-codes: M3 M30 M31 L1 L16 L86 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-ict, nep-ino and nep-ipr
Date: 2007-10

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