There are multiple things I need to worry about beyond just fire fighting, but the thing I keep getting back to is users' mindset and how we are impacted by it. It fascinates me to what extent and how much deeper we need to go in understanding customer psychology. I wrote in the past about how much easier it is for people to steal online because of anonymity and distance from actual face to face human contact; one of the folks here at Klarna equates this to an open cookie jar in an empty room. Would you take one?
Most people would. That's the amazing, oh-so-human day to day situation we need to work with. The difference from your usual eCommerce payments risk situation stems from the fact that instead of trading tokens of trust issued by other financial institutions (issuing banks in the case of credit cards, for example) we basically establish and sell trust between buyers and sellers on our own, based on our data and inference (more on how this impacts the multiple facets in a payments business - maybe in a future post). That's a very different ball game when not only is the customer's identity not a given, but their mere ability or willingness to pay could be in doubt.
So instead of focusing on identity verification given a credit card (with a sprinkle of repeat offenders and hackers on top) we must look at a broader spectrum of credit and abuse issues. And the question about the customer's current and future mental state (future being upon receiving the request to pay) determines our ability to approve a purchase no less than the question whether this is a real person or not. The levers we need to pull, then, expand beyond identifying bad guys. Can I instill financial responsibility in a first time buyer through a well designed buying experience? Will the busy businesswoman forget about our payment request in her busy schedule?
The other interesting thing is that since Klarna owns the stack (we issue credit, acquire merchants, manage reminders to pay) I have many more touch points with the customer. That calls for more negotiation and, actually, relationship building that both sides are interested in (buyers keep coming back to Klarna-powered checkouts). That's a plus in many ways since I can control the buyer's experience and correct earlier mistakes, be them false positives or false negatives. But the question remains - and it's a complicated one - how do you impact the buyer's mental state within a very short sequence of clicks and without hurting conversion?
Have I mentioned that I love my job?
(BTW, we're hiring)
4 comments:
Very interesting angle and research field. Reminds Dan Ariely's research in behavioral economics science, and social psychology as well. I envy your ability to check your hypothesis very very fast, which brings Klarna to B probably one of the most innovative research centers there is.
Agreed - your question is a complicated one, and there's no simple, cut and dry answer. Although in this case you're clearly speaking of the actual transaction itself, it's only one of multiple chances you have to influence the consumer towards a positive outcome - before, during, and after a payment arrangement is made. It's possible you may make a larger impact on buyer behavior elsewhere.
Something that immediately popped into my mind while reading this was the difference between what it means to be "in debt" to klarna versus being "indebted' to klarna. In my mind, being "in debt" to someone means I'm legally obligated to pay them for whatever good or service they've provided. I can be "in debt" to a bank, an auto loan company, a bookie, whomever. But to be "indebted" to someone suggests a deeper, moral obligation I have to pay them back for doing me a favor, even if there's a financial component to the favor itself. I feel that it's preferable to have consumers feel "indebted" to klarna because of the value and experience you've provided them with - the actual money you've loaned them is only half of the value proposition (and not the one you want to initially focus on).
So how do you solicit a feeling of "indebtedness" from your customers? The comments section is no place to dive that deep into theory, but I believe there are a number of opportunities, prior to the transaction, for you to shape the view of what people believe they're actually signing up for. Pair that with strong on-site value prop messaging and timely post-transaction reminders of what a great "favor" you've done for them, and I'd be very interested to see the impact on the lifetime value of an average klarna customer.
We're really just scratching the surface of buyer psychology here, but I like where you're headed.
Yup, you can often cut fraud by repersonalising. A number of firms are now experimenting with this. I gave a talk about it at the workshop on security and human behaviour last June; the slides are at http://www.cl.cam.ac.uk/~rja14/Presentations/perso-shb2011.ppt
Thanks Ross - very interesting!
Post a Comment