Giving a Great Onboarding Experience ‘“ the best welcome you can give your customers
The road to your revenue is always via your customer. The road to prolonged recurring revenue is when your customer has such a great customer experience that they stay with you. And even better, recommend you to their network of friends and peers.
Onboarding is your first step to that long-term success.
What do we mean with onboarding?
Onboarding is the period where a customer becomes your customer till the moment they reach their first success with your product or service. This last bit is important. The onboarding is not just simple welcoming a new customer. It is helping them become successful by using your products and services. So, you should do your utmost best in the first period to wow your customer.
Or as Lincoln Murphy from Sixteen Ventures states it, an onboarded customer is two things:
- One that has experienced ‘initial success’ with your product
- One that sees the real value potential in their relationship with you
Anyways, it is clear that your customer needs to experience success.
Why is onboarding so important?
If you do it right you may have started a long-time relationship, that can even become an ambassador kind of relationship. If you do it wrong, you might mess up the newly relationship and they will ‘churn’. That can be quitting your subscription, not using your product or service (‘dust collecting’), or even talk negatively about you (and that is the last thing that you want to happen!)
The entire purpose of onboarding is retention
Frederick F. Reichheld and Phil Schefter of the Harvard Business School referred in their article a study conducted by Bain & Company, in coordination with Earl Sasser of HBS where they compared the costs and revenues that came from serving customers over their whole purchasing life cycle.
They said: ‘We showed that in industry after industry, the high cost of acquiring customers renders many customer relationships unprofitable during their early years. Only in later years, when the cost of serving loyal customers falls and the volume of their purchases rises, do relationships generate big returns. The bottom line: Increasing customer retention rates by 5% increases profits by 25% to 95%.’
With other words: it is way more expensive to attract new customers, than to keep an existing one.
Gartner indicates that 80% of your future profits will come from just 20% of your existing customers – the famous 20/80-rule.
Market Metrics indicates that the probability of converting an existing customer is 60 to 70 percent. On the other hand, it is just 5 to 30 percent for converting a new prospect.
According to Emmet and Mark Murphy a 2% increase in customer retention has the same effect as cutting costs by 10%.
Laura Lake, a marketing professional and author, gathered data that show that repeat customers spend 33 percent more compared to new customers.
The White House Office of Consumer Affairs indicates that getting new customers is 6 to 7 times more expensive than keeping your current ones.
Getting a new customer is important, keeping a customer is essential.
Benefits of onboarding to your customer
If a customer does not understand the context of your product service app. If they can’t immediately see its benefits or has a bad initial experience, you just messed up your chances.
Onboarding helps users understand your product’s features
Do you remember the days when you had to read the manual to understand a product? Well, those days are over. People simple do not want to read manuals with a lot of text anymore. Either you provide them with handy how-to-videos, which offers a good customer experience. Or you leave them on their own to figure out how your product or service works. And that might be not such a great experience.
Great onboarding improves retention
The first impression is of great importance. Providing a simple and easy onboarding process that explains the new user with every step what value they get from your product or service. If not, they will leave fast and your churn rate will increase. Meaning you are losing money.
Onboarding can address customer inquiries head-on
Onboard your customers in a very educational and informative way and the chances are that customer service will get less support requests. Meaning you will save your customers time and hassle, and once again that is a good customer experience.
Ok, it’s clear that onboarding is a very important process. But how do we set up a great onboarding?
Customer Onboarding Best Practices according to HubSpot
HubSpot has set up 7 very handy best practices that will help you to onboard your customers in a helpful manner giving them a great onboarding experience.
1. Understand your customer
Get to know your customer. It is essential to understand your customer. Because when you know what pain points, obstacles and challenges your customer faces you can address them in your onboarding. When you know their ideal solutions and outcome you know where to guide your customers to. Remember: they need to experience success or value to become a real satisfied customer. All of this information will help you tailor an onboarding experience that will wow them.
2. Set clear expectations
To prevent disappointment with your customers, it is important that they know what to expect before they buy. This process of explaining and educating your customers of using your products and services continues during the onboarding. Should your customers get stuck provide them with guidance how they can get support. This will help to prevent that your customers give up and turn their back to you disappointed.
3. Show value
Keep on emphasizing on the value that you provide. If your customer perceives that value they will become more enthusiastic about your products and services. Give them specific examples of how your product will address their pain points, obstacles and challenges. You should include a personalized touch here. A kickoff call, specialized training, or documentation would be valuable here.
4. Stay in constant communication
A welcome message is great, but you should not stop there. Set up an onboarding email sequence that provides them with practical tips, advice, tutorials and guides that shows your customers continuously the value of your products and services.
5. Create customer-centric goals
Find out what your customer finds important, what they regard as a success. Then help them create measurable milestones and guide them in reaching those milestones.
6. Seek to impress
The onboarding period is like a honeymoon. Give your new customers all that you have got to give them an experience they will not forget and are willing to share with others.
7. Measure your success
Onboarding benefits your customer and your business. So, ask your customers what they think of the onboarding experience they were given. Find out what they liked and ‘“ just as important ‘“ what they did not like. Track metrics like churn rate, customer lifetime value, Net Promoter score and retention metrics so you know what’s good and what’s not.
Useful Customer Onboarding Tips
In addition to the above mentioned best practices, here a few tips that will make your onboarding a positive experience for your new customers.
- Give your customers a personalized experience. Each customer has a unique set of concerns. The more you can tailor your solution to their needs, the easier it will be to achieve wins ‘” and loyal customers.
- Break everything down. Don’t overwhelm your new customers with a lot of information. What seems logical for you, might not be the case for them. So. Break it down to a simple task at a time with clear instructions how to accomplish that task.
- Be with your customers every step of the way. Nothing more annoying than getting stuck and no one to turn to for help. If you can, dedicate a number of customer service or success representatives to new customers. This will be a win-win situation: your customer will have a better onboarding experience and you know where you need to improve your onboarding process.
- Celebrate the small wins. When your customer successfully completes a milestone, celebrate that with them. Make it a joint undertaking, it will strengthen your relationship.
This blog was based on a podcast I did with Elias Crum as part of our revenue Marketing Series ‘“ episode 8 How to onboard customers like a pro. Check out the complete Revenue Marketing podcast series