Onboarding: It’s Not Just for SaaS Companies

Beyond the initial win of getting your customer to sign up, keeping them is the real test. Without a good onboarding process, it doesn’t matter how many people you get to sign up if they don’t stay.

Client retention depends on how much value they receive and how positive their experience is, especially during those first weeks as a customer. That means a good onboarding process is a crucial piece of your business strategy. And while most onboarding advice is tailored specifically to SaaS companies, the truth is that no matter what kind of product you have, the tenets of onboarding are the same.

So, how do you create an onboarding process that gets your customer to stick around? Read on to find out:

What is customer onboarding?

Customer onboarding covers the initial period that customers begin using your product or service. Groove HQ defines the onboarding period as beginning and ending with two critical events, the outcomes of which determine your customer’s lifetime value:

  1. The initial sale. The clock starts ticking as soon as the customer has signed up, after they’ve completed the “buyer’s journey:” awareness, consideration, and buying decision.
  1. Your customer’s first success. The second critical milestone happens when they first experience valuable results from using your product or service.

Why is onboarding so important?

Most customer churn takes place between these two events, i.e. during onboarding. “That’s where customers abandon your product because they get lost, don’t understand something, don’t get value from the product, or simply lose interest,” explains Len Markidan of Groove.

If that fact doesn’t get you on board yet (see what I did there?), consider these stats:

  • On average, you’ll lose 75% of your new users within the first week
  • 40-60% of free trial users will use your product once and never come back
  • Most revenue comes from returning customers
  • Getting new customers is much more expensive than retaining existing customers
  • Happy customers become your top referral sources

Think of the process like taking on a new hire. If a new employee experiences chaos and confusion their first week, how likely is it that they’ll continue working for that company? When new hire onboarding goes well, 91% of employees will remain for at least a year, and 69% will stay for at least three years. The user’s initial experience is just as critical.

The better your onboarding process, the more likely you are to reduce churn and keep more of your customers. That, in turn, lowers the cost to acquire new customers and increases your overall revenue.

What a good customer onboarding process looks like:

In the onboarding stage, it’s vital that you remain as customer-focused as you did in your sales and marketing efforts. Keep communication up and follow through on your value proposition.

Here are a few guidelines to consider when onboarding a new customer:

Match customer expectations. Even better? Exceed them. Review your marketing materials to see if you’re at risk of overselling your product. If the first experience a customer has with your product is disappointment that it doesn’t match expectations, they’re unlikely to stay a customer. In other words, deliver exactly what you promised to deliver (or better!).

Tailor the customer experience. Personalized customer experience will go a long way toward customer retention.

  • What are your customer’s specific concerns, and how can you meet them?
  • What does success look like for them, and how can you shorten the time from sign-up to success for them?
  • Do you have distinct customer groups with different needs, for whom you could tailor different onboarding paths? For example, for a company offering client relationship management software, one client profile may be the business new to using a CRM, while another may be the seasoned business with a large list who is migrating from a competitor. Each group will have very different questions and problems to solve when first using your product.

The more detailed your knowledge of your customer’s needs and expectations, the easier it will be to fulfill them.

Keep communication ongoing, timely and relevant. A good way to start the process is by sending a welcome email (especially when free trials are in play). However, it bears repeating that if you send nothing but that initial email and one follow-up email near the end of the trial, you probably won’t retain that customer. (For more about creating successful free trials, head here.)

A better plan is to start with the welcome email, and then follow through with a series of daily or weekly emails, depending on how your user interacts with your product or service. Those emails may:

  • Highlight a product feature, or offer a timely tip
  • Address any FAQs that may be relevant at this stage
  • Present case studies demonstrating how other customers are using your product and sharing their results.

All of these emails should guide your customer toward success, whatever that looks like for your subscription service or product: a well-designed and client-attractive landing page that wins your customer their first opt-in or sale; a delivery of exactly the organic produce they want, that gets consumed deliciously in the weeks before the next delivery; or a fully automated email campaign that creates an uptick in audience engagement. How does your customer define success?

However, be careful not to overload your customers with too much information. Use discretion. Who is your audience? Will they need significant hands-on help in their first week of use, or will an occasional check-in suffice? Ask yourself: how granular can I make this, to keep overwhelm at a minimum?

Your initial communications should function on a “need-to-know” basis to get your customer up and running (well-timed how-tos), as well as reassure them that they made the right decision in committing to your product (relevant customer stories). Save “nice-to-have” service features or upgrades for later communications, when the customer has some experience—and positive feelings about your product—under their belt.

Make sure your tutorials are clear and easy to understand. Many onboarding processes include step-by-step instructions on how to use your service or product. For your business, that might be a downloadable checklist, a friendly user interface that pops up along with customer actions in real time, or a series of training videos. No matter how you offer the tutorials, make sure that the customer finds them easy to use and follow.

Start with a plan. Here are some great checklists to get you started.

See it in action:

Look outside the digital world for inspiration. Outdoor retailer REI knows that if customers buy equipment that just ends up gathering dust, they won’t come back for more. “REI’s guided activities, classes, and group events help teach users how to get more value and enjoyment from their products, while also building an active user community and encouraging continued use of their products,” writes Katryna Balboni of Appcues. Their approach gets customers to success (using the equipment in a fun outdoors activity) and keeps them engaged for the long term.

Good onboarding, when used in conjunction with other strategies, can have many benefits — not least, reducing your chargeback rates. For other tips on reducing chargebacks, make sure to download our free cheat sheet below:

Enter your email below to receive the Reducing Chargebacks guide and subscribe to Rebilly updates: