A person who travels You’ll often be told that one of the greatest innovations of the past decade is TSA PreCheck.
It’s so simple and effective that it makes you wonder why no one thought of it before. This example can serve as enough motivation for businesses, especially since the markets have no signs of recovery: how can companies do the same, hoping to maintain income during the recession?
Companies need to provide a fast lane when times are tight so that customers can enter their online store without blocking or creating friction to disrupt their experience.
How can we create customer experiences on par with TSA PreCheck to help retain revenue?
The biggest stumbling block for repeat customers and retained revenue can come from an unlikely place – your security protocols.
Know Your Customer: A Passwordless Future
It’s important to understand whether your site visitor is a new customer trying to create an account, a returning customer, or a fraudster trying to steal your customer data. If you can tell if someone is a legitimate customer up front, you won’t have to verify their email address or phone number during the account process — a friction that security teams introduce to keep things safe.
I recently read a sobering statistic: While US businesses lost $95 billion to fraud this year, misidentifying prospective and returning customers cost those businesses nearly $1.8 trillion.
According to the FIDO Alliance, 58 percent of US users abandon their cart because of difficulty managing their passwords. This just goes to show that you need to grease the sales tires either way. During a recession you should make things easier, not more difficult.
A business can calculate the cost of each new individual creating an account on their site or app. It also needs to know what a customer’s lifetime value (LTV) is and what impact the brand has when things don’t go right. In other words, a company needs to know how many new customers complete the registration form but are tempted to “verify their email” and never do.
| Measure | Calculated values |
| Number of monthly accounts created | 50,000 |
| Percentage of incomplete account creations | 9.00 |
| Number of incomplete or broken accounts | 4,500 |
| Customer LTV | 50 dollars |
| LTV lost due to noise | 225,000 dollars |
| The LTV percentage is due to the acquisition cost. | 10 |
| The monthly purchase cost is gone | 22,500 dollars |
| The percentage of LTV caused by brand damage | 1 |
| Total monthly brand damage | 2,250 dollars |
| Total loss per month | 249,750 dollars |
| Annual loss due to accounting failure | 2,997,000 dollars |
Let’s say 50,000 accounts are created per month and 9% (the industry average) never complete the registration process due to the verification process. If your LTV is $50 and your purchase price is 10% LTV ($5) and your brand damage is 1% LTV ($0.50), your security measures are costing you nearly $2.5 million per year.
