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

Katja Seim, Business Economics and Public Policy, The Wharton School; Anja Lambrecht, Marketing, London Business School; and Catherine Tucker, Management Science and Marketing, MIT Sloan School of Management

Abstract: Many firms have introduced Internet-based customer self-service applications such as online payments or brokerage services. Despite high initial sign-up rates, not all customers actually shift their dealings online. We investigate whether the multistage nature of the adoption process (an “adoption funnel”) for such technologies can explain this low take-up. We use exogenous variation in events that possibly interrupt adoption, in the form of vacations and public holidays in different German states, to identify the effect on regular usage of being interrupted earlier in the adoption process. We find that interruptions in the early stages of the adoption process reduce a customer’s probability of using the technology regularly. Our results suggest significant cost-saving opportunities from eliminating interruptions in the adoption funnel.