The path to borrowing today is paved with choices. Consumers can easily research terms, APRs and TARs within seconds, and get approved within minutes. This accelerated application process enables lenders to reach more borrowers – but also to lose them more easily to competitors.
The trick is identifying where in the conversion funnel you lose a prospective borrower. Why do people visit your website, then apply for a loan with a competitor? Who is starting an application, and leaving before finishing? Let’s dig into exactly how to figure that out.
Below we compare the conversion funnels of three major lending sites, LendingClub, SoFi and Prosper, and see major differences in their ability to attract and convert prospective borrowers. What can the other two learn from Prosper’s success?
*Conversion funnel based on week ending 1/20/2017
SoFi’s Uniquely Youthful Audience
SoFi’s conversion funnel performs rather consistently, but they could be better about getting more visitors to start loan applications. SoFi is known for going after the Millennial age bracket, and the numbers suggest they’re doing a good job at this so far.
SoFi attracts and converts young people more consistently than the other two brands. In fact, their 18-24-year-old index increases further along the funnel, most likely due to strong student-loan-seeking contingent. Although SoFi’s overall gender split actually skews towards men, they are particularly excellent at converting young women aged 18-24:
SoFi doesn’t perform as well with older visitors, but this may reflect a conscious choice to double down on their target audience. That being said, they have an opportunity to nurture older Millennials and Gen Xers, who show consistency in completing the SoFi application process and — as we’ll see later — are much weaker segments for the other two lenders.
Fun Fact: Did you know that Millennial loan seekers are more likely to pay for financial advice than any other age group? See our Infographic about how different audiences seek loans >>
LendingClub – Closing the Leaky Funnel
Lending Club gets more traffic than all three lenders, but has trouble converting their visitors. Where is their conversion funnel “leaking?”
Unlike SoFi, LendingClub is mostly losing young people in the funnel, and only succeeds in converting their oldest audiences — this is true for both men and women. This senior age group may be their “sweet spot” for now, but their inability to retain younger borrowers could be troublesome for the future of the company.
LendingClub misses a major opportunity with their African American applicants. This group is more likely to start an application with LendingClub than with either of the other lenders — but the least likely to complete their application. Why are they losing this segment, and how they help them follow through with the final steps of the process?
Why Prosper is Prospering
It’s hard to attribute Prosper’s conversion success to a single thing. It may be due, in part, to their very simple one-page loan rate form — the other lenders require visitors to click through several pages before receiving offers.
Prosper also maintains both younger students and older audiences fairly steadily throughout the funnel. So where can they expand next?
None of the three lenders maintain Generation X applicants along the funnel very well. As you see above, Prosper under-indexes for this middle age group. However, these low numbers are largely due to male applicants. Women aged 35-44 increase in likelihood to engage along the funnel, suggesting engaging with young moms or female business professionals could be the next segment for Prosper to target.
This report was excerpted from our Converting Loan Applications data brief, which details how to improve your competitive conversion benchmarking and close the leaks in your loan application funnel.