Purchasing complex services on the Internet; An analysis of mortgage loan acquisitions

In contrast to, for example, books and compact discs, the number of complex services offered on the Internet is still small. A good example of such a service concerns mortgage loans. The decision-making process differs for complex services in that they have an extra intermediate step of `indication of interest'. The web site is (1) visited and searched for information, subsequently (2) a request for the service is made, which may lead to (3) a purchase. This difference in the buying process and the complexity of the decision-making process, requires afurther investigation on purchasing complex services on the Internet. We therefore focus on online purchases of complex services, paying special attention to the determinants of a purchase of such services. To this end, we acquired a unique data set from an online Dutch financial service provider, which offers services like mortgage loans and insurances on the Internet. This data contains, besides clickstream data, also data on user-specific information like demographics. We also obtained information on whether the request for the service re-sulted in a purchase. Search behavior, product familiarity and trust appear to be useful determinants of purchase of complex services. Direct managerial applications of our model include the ability to identify customer characteristics of successful applicants, and subsequently the selection of customers.