Throughout the COVID-19 crisis, we have been inundated with information that is constantly changing and sometimes even contradictory to what we were told previously.
The result is a whole lot of confusion, frustration, and overwhelm. Financially, many people are uncertain and afraid, and more than anything, they just want to understand what’s going on.
Even outside of COVID-19, money is an inherently complex subject. Part of the problem is cultural: we simply don’t talk very much about money. It’s a taboo subject in a lot of ways, but it’s time for that to change.
Financial brands must commit to removing as much complexity as possible from the way they position their products and services. By making things as simple as possible for your consumers, you can reduce their anxiety and increase your conversion rates, both during and after COVID-19.
Let’s take a closer look at why complexity is such a problem and how you can simplify.
For consumers, money = confusion, frustration, and overwhelm
In the research studies we’ve conducted at the Digital Growth Institute, we’ve asked consumers the question, “How does money make you feel?” More than 1,200 studies later, we’ve distilled the responses down into three negative emotions people tend to have around money:
- Confusion: “I know money is important, but I don’t know what I need to do to keep it, save it, and make more of it.”
- Frustration: “I feel like I’m always behind with my money, and there’s nothing I can do to catch up.”
- Overwhelm: “It just seems like the more in debt I get, the harder it is to get out.”
This confusion, frustration, and overwhelming emotions lead to stress. A study by fintech Stash.com found 62 percent of people find money to be a major source of stress. Another study by Northwestern Mutual found 85 percent of Americans feel stressed about money.
This stress has an impact on our physical and mental well-being, with the Stash.com study also finding that 31 percent of consumers are losing sleep over financial stress.
With COVID-19, unemployment numbers have skyrocketed, and people are worried about their financial stability. For many, the stress around money is at an all-time high.
Understanding cognitive load
In this kind of environment, given the level of stress people are feeling, does it make sense, in digitally positioning your financial products, to highlight their complex functionalities?
Of course not! Consumers are already dealing with a heavy cognitive load when it comes to money. For those unfamiliar with the term, “cognitive load” simply means the mental energy a task requires for completion. Digitally, we can break cognitive load into three different types.
There is the intrinsic cognitive load, meaning the inherent difficulty of the subject. Obviously, there’s already a lot of intrinsic cognitive load built into money and finances.
There is also the extraneous cognitive load, which is the complexity added by how we communicate and present ourselves digitally. This is what we’re going to be looking at when it comes to product positioning. The way financial products have traditionally been positioned is around great rates, amazing service, and look-alike laundry lists of commoditized bullet points.
Finally, there is the germane cognitive load, the schemas or frameworks helping us organize and interpret information quickly—for example, a website’s user experience and the frameworks in which information is visually constructed, presented, and communicated.
Time and time again, our studies have found when a financial brand reduces cognitive load, conversion rates on their website increase exponentially. Similarly, we’ve seen that with any minor addition of complexity, conversion rates begin to drop.
The power of simple
So how do you go about reducing the cognitive load? The answer is simple.
A study from Financial Brand found banking websites actually score the lowest for usability and conversions across all industries. A big reason is too much complexity and too many choices.
For instance, with one financial brand I worked with, we found a tremendous amount of inherent complexity had been added to the website through the course of its existence. Their website was about four or five years old, and over time, new pages and content were continuously added without any oversight or due diligence from the perspective of the consumer’s digital shopping experience. The website had grown to over 300 different product pages alone!
One of our key strategic recommendations was to go through and take a chainsaw to those product pages, chopping away at all that were extraneous and unnecessary. We also recommended consolidating the remaining content, bringing everything together in a more unified and simplified view.
With their simplified website, they increased conversion rates by 1,500 percent. From a growth standpoint, their website went from their most underperforming acquisition channel (compared to their branches) to outperforming all of their physical branch locations in just eighteen months.
During this global pandemic, an easy way to implement this strategy is to place a link on your homepage that leads to a COVID-19 “help center,” where you have a consolidated, up-to-date list of links to the most relevant information consumers want.
Another tip is to transform all those old bullet points and long text paragraphs into headlines and related iconography. The brain processes images 60,000 times faster than it does written text, and 93 percent of all communication is visual. By replacing text blocks with pictures and iconography, you make your website easier to use for consumers.
Simplify, Simplify, Simplify
We’re already overloaded with information in our lives, and with the COVID-19 pandemic, that overload has reached new heights. If you can simplify the inherently complex nature of money, you will differentiate yourself from your competition.
Ultimately, people don’t buy financial products and services; they buy shortcuts and solutions to solve their problems. And one of consumers’ biggest problems is the confusion, frustration, and overwhelm they feel around money. By simplifying the way you position your products and services, you can help consumers while also improving your own outcomes.
You can find more advice on simplifying how you position your products and services in the bestselling book Banking on Digital Growth.