How Upstart improved its customer conversion rates

Learn how Upstart identified critical gaps and empowered proactive product management to fuel revenue growth.

Inside Upstart’s Journey to Improve Customer Conversion Rates

Context: 

Upstart is the leading AI lending marketplace. Upstart’s AI helps make borrowing more accurate, efficient, and inclusive.

Product Area: 

Vaibhav and his team own the auto lending product at Upstart. It enables customers at car dealerships to get financing directly through the dealership's network of lenders. The goal is to make it as seamless as possible for buyers to buy their dream car while helping both dealerships close more sales and lenders originate more loans.

Problem: 

Upstart had noticed a softening in conversion rates among customers looking for financing at dealerships, though research into its customer success channels, an analysis of internal data and consideration of external factors did not point to any specific reason why. 

Observations:

The product team decided to go deeper and started to visit dealerships. They had each dealership walk them through their loan workflow and mapped that against their existing product workflow.

The visits revealed that dealerships were using the product in a "hacky" way, especially for customers with lower credit scores. For these customers, a credit check in the upstream part of the shopping journey is more critical for dealerships. The credit check in Upstart’s workflow took place later in the journey. As a result, the dealers had created multiple workarounds that the product was not designed for and, ultimately, led to a subpar customer experience. This was a disincentive for them to use it repeatedly.

Solution: 

The team created an alternative workflow that allowed the credit check earlier in the workflow, and solved for related edge cases to lead to an optimized customer experience.  

Old Funnel:

The existing workflow for a dealer was to first help customers choose a car and then explore financing options.

However, customers with lower credit scores often wanted to understand their financing eligibility before getting emotionally invested in a particular car. 

New Funnel: 

The team pivoted to introduce a "Credit First" workflow, enabling dealerships to check a customer's credit eligibility upfront. This allowed customers to get clarity on their financing options before selecting a vehicle.

Impact:

In the first five months after implementation, the optimized workflow helped increase the conversion rates by up to 40%.

Learning: 

• Don't only investigate your customer's gaps/problems; understanding how their customer's customer is changing can help you solve a problem. 

• Asking open-ended questions about your users' needs rather than focusing solely on feature-specific feedback will help you uncover gaps that you’re not thinking about.

Transitioning from CSM-driven decision-making to PM-led strategic thinking increased revenue

Problem: 

Customer Success Managers (CSMs) were heavily influencing the product roadmap, which is often typical in enterprise environments where the CSMs maintain close relationships with customers. However, this led to a reactive product management approach, with Product Managers (PMs) receiving requests rather than proactively shaping the direction of the product. 

Process Change: 

Key Changes that were made: 

• Adjusted approach of the product team, placing an emphasis on thought leadership over just building.

• Re-organized the product team by hiring tenured Principal PMs and redistributing the PM charters to drive a better fit between the PMs' skills, experiences and roadmap complexity. 

• Updated the performance criteria from being focused just on launching features to a few key values for the team, including: 

  • Strategic thinking as a core component of PMs' roles.

  • Strong emphasis on customer obsession.

  • Output metric-based quarterly deliverables.

• Strengthened relationship with the CSM team leader and then partnered with them to put in mechanisms for our teams to collaborate more easily. For example, scheduled a weekly meeting series for PMs and CSMs to exchange updates and ideas, and encouraged PMs to review work-in-progress PRDs with the CSMs early in the discovery process instead of meeting only for GTM support later.

These changes helped shift the product team’s mindset from reactive execution to proactive leadership, and started giving them the autonomy to proactively drive product decisions

Impact: 

1. Energized Product Teams: The change inspired PMs, increasing their motivation and engagement, as they now had a meaningful role in shaping the product's future.

2. Retention Improvement: With the product teams feeling more empowered and valued, employee retention improved across the board.

3. Quality of Product: By having more product-first discussions, the PMs and CSMs increased the quality of the product as it was now being guided by a holistic understanding of customer needs.

4. Higher Accountability and Ownership: Product teams took greater ownership, leading to more strategic decisions and the ability to defend the product roadmap based on strategic insights rather than ad-hoc requests.

These improvements are ultimately leading to an increase in revenue, as the enhanced product quality and strategic focus are helping attract and retain more customers.

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