How can we explain the 25% decline in new investor sign-ups on Lending Club's platform since implementing the new verification process?

Introduction

The 25% decline in new investor sign-ups on Lending Club's platform since implementing the new verification process is a critical issue that demands immediate attention. This significant drop in a key performance indicator could have far-reaching consequences for the platform's growth and overall health. To address this problem, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term fixes and long-term strategic implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking the new verification process might be too cumbersome. Has there been an increase in abandonment rates during the sign-up flow?

Why it matters: This could pinpoint where exactly we're losing potential investors. Expected answer: Yes, there's been a 30% increase in abandonment during verification. Impact on approach: If true, we'd focus on streamlining the verification steps.

• Considering user segments, I wonder if this decline is uniform across all investor types. Are we seeing a more significant drop in any particular investor segment (e.g., high-net-worth vs. retail investors)?

Why it matters: Different segments may require tailored solutions. Expected answer: The decline is more pronounced among retail investors. Impact on approach: We'd prioritize simplifying the process for retail investors while maintaining necessary checks for high-net-worth individuals.

• Given the importance of trust in financial platforms, I'm curious about the user perception. Have we seen any changes in user feedback or sentiment regarding the platform's security since implementing the new process?

Why it matters: This could help us balance security measures with user experience. Expected answer: Mixed feedback, with some praising increased security but others frustrated by complexity. Impact on approach: We'd need to communicate the benefits of the new process more effectively.

• Thinking about competitive landscape, has there been any significant change in competitor offerings or marketing strategies coinciding with our new verification process?

Why it matters: External factors could be contributing to the decline. Expected answer: No major changes in competitor strategies noted. Impact on approach: We'd focus more on internal factors rather than market dynamics.