Customer onboarding is the process that a client goes through when they start using your product or service. It’s often described as a journey, with discrete steps or phases that require different actions on the part of the provider to keep the customer engaged.
Why is customer onboarding important?
New customer onboarding can determine whether you get continued or repeat business. This is crucial to business success because lead acquisition and nurturing are real business costs that determine if your business is profitable. The Cost to Acquire Customers (CAC) is an important metric to consider. It determines not just your sales and marketing budget, but also your product or service price point.
You can calculate your CAC by taking your total sales and marketing expenses (factoring fixed costs like the salaries of your team) over a defined time period. Then divide that by the number of customers you got in that period.
Now calculate that customer’s monetization value, or how much money you can expect from that customer over the course of their engagement with you.
If the CAC is higher than the customer’s monetization value, that’s going to kill your business.
The key to making the scales tip in favor of the business is to increase a customer’s monetization value (by having them stay longer and/or pay more for your product or service) and by decreasing your cost of acquisition. Both can be addressed with a well-designed customer onboarding process.
How to make a new customer onboarding process
There’s no single ideal customer onboarding template to follow because every business model is different. To design a good customer onboarding experience, keep in mind the Three C’s. You need to deliver your product or service:
- and Quickly (okay, that’s not a C, but it sounds like one)
Correctly. To deliver correctly, you need to make sure you follow WYSIWYG—What you See is What you Get. Deliver on everything you promised during the sales and marketing phase. On the marketing side of the equation, you need to make sure your marketing messages don’t over-promise. You want the opposite- underpromise, and overdeliver (but not too much). Falling short on the service or product delivery means the customer didn’t get what they paid for, which is a clear sign for them to exit.
Consistently. You can do it right, but can you do it right again and again? This is an Operations concern. Can your daily operations consistently deliver at the same level of quality over the lifetime of your customer relationship? The more consistent you are, the longer they’ll stay, which increases their monetization value.
Quickly. The faster you can operate for correct, consistent delivery, the more clients you can accommodate, which lets you- and your profits- scale up.
Designing Your Client Onboarding Process
Map the Customer’s Journey. Identify the steps in the journey and how we can make sure we can deliver correctly, consistently, and quickly.
- Signup and welcome. Design your onboarding process around where your customers find and contact you. Collect all the information you need to do business with them, but don’t make the process long and tedious. Get what you need, and nothing more. A client onboarding questionnaire that’s easy to navigate and stores the data in a well-organized database will be useful not just for retrieving the relevant information if Operations or Accounts needs it, but will also help you get data for future marketing targeting.
- Education. Incredibly important in setting the tone of the customer relationship. Guide the customer through how your processes work and what they can expect. Have your subject matter experts break down their processes for your onboarding script — as the experts, they’re the most qualified to break down the process into digestible chunks that the customer can understand easily. This makes frictionless onboarding possible.
- First transaction. How well you do here tells the customer if they should stay or go — they’re fresh off the shopping around part of their journey when they found you. They can very well go back to it if they’re unsatisfied. Getting it Correct is your priority here.
- Follow up. During and after their first transition, stay in touch with your customer and get feedback. If there are gaps in their education and delivery, address those, and make adjustments to your onboarding process for future customers.
While these are the steps to the process in general, the specifics of it will really depend on the nature of your business. Getting your new customer onboarding process will take a while but have a direct influence on your business’s success. There are also customer onboarding software tools and templates that you can use to scale up — creating an automated, more efficient process can also drive down your cost of acquisition.
The tips given above are more on an introductory level but are vital to understanding why customer onboarding is so important to your business succeeding. And with more businesses switching to online customer acquisition, many are having trouble navigating their onboarding on a new platform.
Keep working at it — it’s hard, but the reward is well worth it: a sales funnel of happy customers, employees satisfied with their delivery, and a company with a loyal client base.