The Customer Onboarding Process in 6 Steps [+Checklist]

The Customer Onboarding Process in 6 Steps [+Checklist]

In a world where your customers have potentially hundreds of other options to choose from, conversions alone aren’t enough. As a result, every other business is doubling down on customer onboarding – a systematic way of building a long-term relationship with new customers and reducing churn.

Thanks to the wide-scale availability of resources and new tech, the concept of monopolies is coming to an end.

Today, most industries/niches have multiple players, which is good for customers, and challenging for businesses.

This means that customers have more options and, therefore, more freedom to switch.

For that reason, companies – especially a SaaS business – have to ensure that their customers aren’t merely converted, but onboarded.

In this comprehensive customer onboarding guide, I’ll go over everything you need to know about the concept, including:

  • What customer onboarding is
  • A step-by-step guide to customer onboarding process
  • A general checklist for customer onboarding

Let’s dive right in.

What is Customer Onboarding?

A customer onboarding process is a planned and conscious attempt at ensuring that your new customers like your product and continue using it.

It involves using different tactics to guide the customer through your product i.e. welcoming them, informing them about the product features, educating them about the solutions you offer, engaging with them at different stages/touchpoints, and coming up with new offers to deliver an overall positiveand memorable experience to achieve broader business goals.

While the onboarding process may differ from product-to-product (or even customer-to-customer), the basic, underlying goal is the same – to establish long-term relationships by providing solutions to pain-points.

Businesses gauge the success of customer onboarding with the help of pre-determined milestones. In the later part of this guide, we’ll dive deeper into all of these concepts.

The Subtle Difference Between User Onboarding and Customer Onboarding

More often than not, beginners confuse customer onboarding with user onboarding.

That’s because both processes overlap at certain points.

While there may be some similarities, there is a subtle difference between user onboarding and customer onboarding.

Before we get into that, let’s take a look at the basic difference between a user and a customer:

  • User – as the name suggests, it refers to anyone who uses your product. A user doesn’t have to necessarily pay to use your software. Furthermore, a paying customer can also be a user.
  • Customer – anyone who actually pays to use your product or services is referred to as a user. Your main priorities should be to keep new customers coming in and to retain your existing ones.

Considering that, user onboarding refers to guiding your new users through the initial process and helping them understand what your product can do for them.

On the other hand, customer onboarding goes beyond the initial customer success moment, and focuses on delighting, building loyalty, and cultivating strong relationships.

In fact, customer onboarding efforts begin before a user converts into an actual paying customer.

The Advantages of Customer Onboarding

Why can’t businesses just put their solutions on sale, convert, and be done with it?

The reason: They need those customers to keep coming back for more. A true product champion knows this all too well.

A sure-fire way to do that is by leveraging onboarding tactics to create a positive customer journey.

If you’re still skeptical, here are a few benefits of focusing on customer onboarding:

1. Drives More Conversions

First and foremost, with a proper customer onboarding strategy in place, a business can drive higher conversions.

When users feel that they’re welcomed, cared for, and listened to, they’re more likely to convert.

In fact, a customer onboarding experiment by Magoosh revealed that users who received a welcome message were 17% more likely to convert into paying customers.

2. Helps Reduce Churn

Customer churn (or attrition) is one of the biggest challenges for all businesses.

To make customers stick around, you need more than just discounts.

You need to deliver positive customer experiences to build loyalty.

This, in turn, will not only help them stick around, but also drive further conversions through word-of-mouth/referrals.

3. Impacts the Bottom Line

Finally, all of the above can positively impact the bottom line of your business.

Research indicates that a 1% difference in the customer churn rate can have a 12% impact on the actual valuation of a company in 5 years.

The 6 Steps for an Effective Customer Onboarding Process

As mentioned earlier, customer onboarding programs are different for each business/product.

However, the overall procedure – whether you’re offering a SaaS, marketing/sales services, or something else – can be broken down into certain steps.

Let’s go through them one by one:

1. Welcome Your New Customers and Users

Your biggest priority should be to make a great first impression.

In order to do that, you need to make your users and customers feel welcome.

A fool-proof and obvious way of doing that is by sending out an automated welcome email or message to your new users.

The email/message should:

  • Address the user with their first name
  • Thank them for choosing your product
  • Show your excitement
  • Include a CTA that leads them to the next step/destination (whatever it may be)

Apart from users who pay for the first time, this obviously applies to users who sign up for trials as well.

You can use a tool that automates the entire process and sends out emails to anyone who signs up for your product.

2. Provide a Quick Overview/Tutorial of Your Product

The welcoming process is still not over.

After delivering the initial email or message and welcoming the user onboard, come up with a greeting message.

This greeting message should pop up when a customer begins to use the app for the first time.

For example, this is the greeting message that all Slack users get when they first start using the app:

Slack-Welcome-Greeting

Don’t just stop there.

Go one step further and take your new users on a small tour/interactive walkthrough of your product.

For that, you can use an animated explainer video, recorded tutorial, or plain text coupled with visuals.

For now, just keep things simple. Don’t dump all of the information on your user at once.

The goal here is to provide a taste of your solution and assist them with getting started.

3. Train or Educate Your New Customers and Users

This next step can make or break your entire onboarding process.

If you’re offering a comprehensive product with a complex user-interface, and on top of that, you’re not offering instant support to your users, you’re setting yourself up for failure.

Needless to say, if users find it increasingly difficult to use your product, they’ll eventually switch to your competitors.

That’s the last thing you want.

To increase your customer retention rate, you have to train and educate them about your product and improve the user experience.

For that, you could:

  • Create a knowledge base where users can access material on the use of your products. SEMrush’s knowledge base is a good example:
SEMrush-Knowledge-Base
  • Invest in explainer videos and upload them on YouTube (and embed them on to your website/app).
  • Having a separate page for FAQs
  • Implanting messages across your app that pop up when users visit/interact with their corresponding features for the first time

You’re allowed to be as creative as you want.

However, don’t get carried away. Remember the end-goal, which is to make the users feel comfortable when they use your product.

4. Start Gathering Feedback After a While

Data is gold.

To consistently improve your onboarding process (along with your entire product, for that matter), you need feedback from your users. This will also tell you if you’re successfully fulfilling customer needs in the first place, or not.

To that end, after a day or two when the customer starts using your product, ask them for their feedback.

You can do that with a simple in-app message, email, or (if you have their phone numbers), through calls.

Start slow. Ask them about their experience so far, and whether or not they’d recommend your product to a friend.

Don’t overwhelm them with a barrage of questions.

Ask them questions throughout the customer journey.

You can also leverage social listening tools to find out the public sentiment towards your product on social media, since it can help you discover room for improvement.

More importantly, once you finish gathering the data, make sure that you act on it i.e. leverage it to improve your product and the onboarding experience.

5. Gauge the Success of Your Onboarding Process (and Share with Your Customers)

Throughout the onboarding, make sure you gauge the success of your efforts.

For that reason, you need to leverage certain customer satisfaction metrics, such as customer lifetime value, retention/churn, etc.

If you’re not measuring the direct impact of your customer onboarding program on the actual business bottom line, you’re missing out on the opportunity to improve your process.

Furthermore, the program could be doing more harm than good, and without monitoring, you’ll never find out.

A tried-and-tested way is to come up with milestones that help you determine if you’re well on your way to achieving your broader business goals, or not.

Here are some examples:

  • Increase retention rate by X%
  • Increase average customer lifetime value by X%
  • Reduce churn rate by X%

As with everything else, start small.

Don’t set unrealistic milestones. Instead, break them down into smaller ones to track whether or not you’re on the path towards successful onboarding.

Furthermore, figure out a way to tie the effectiveness of your customer onboarding process with the customer success rates.

In the end, share your celebrations with your customers and thank them for accompanying you on this journey.

6. Come Up with New Features and Offers to Make Customers Stick Around

At this point – provided that you did everything right – most of your customers should be onboarded.

What now?

Does that mean you can rest easy and hope that your customers continue doing business with you?

Obviously not. You need to continue your efforts to retain them.

As we discussed earlier, this is where user onboarding and customer onboarding part ways.

For starters, every business needs to provide high-level customer support.

Additionally, by using customer feedback and keeping an eye on the changing preferences/trends, they need to come up with new features to stay relevant.

From there, it’s a matter of how you engage your customers and maintain your quality.

What You’ll Need [A 5-Point Checklist to Ensure Seamless Onboarding]

Now that you have a good idea of how to onboard your customers, it’s time to take a look at what you’ll need to make everything possible.

Here’s a checklist to help you get started:

1. Clearly Defined Goals

Before anything else, you need to have a few, clearly-defined goals.

What do you hope to achieve with a customer onboarding program?

Do you want to reduce churn? Increase customer lifetime value? Or is there something else you’re after.

You can always rely on the trusty S.M.A.R.T. goals approach, which states that your goals should be:

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Time-bound

Use that to set long-term goals, and as mentioned earlier, break them down to keep track of your success rate.

2. The Right Metrics

Moving on, using your goals, determine the metrics that your customer success teams are going to use to track the effectiveness of your program.

A few customer satisfaction metrics include:

  • Churn Rate – using churn rate is a no-brainer. This essentially tells you how many customers you’ve lost over a certain time period. A simple formula is to subtract the number of users at the beginning of the period with the number of users at the end of the period, and again using the number of users at the beginning to divide that figure.
  • Time to Completion – as the name suggests, this is the time it takes to finish the onboarding process. A customer is said to be completely onboarded when they start using your product independently. Time to completion is measured from the moment a customer uses your product for the first time, to the moment they no longer require your assistance. A short completion period indicates that the onboarding program is successful.
  • Product Adoption Rate – the rate at which users adopt your product says a lot about your customer onboarding program. You can calculate the product adoption rate by dividing the total number of active users with the total number of leads or subscribers.
  • Net Promoter Score – to gauge the loyalty of your onboarded users, you can use the net promoter score. In the simplest sense, it tells you how likely your customers are to recommend your products to a friend or family member. To calculate NPS, first divide your customers into three groups i.e. detractors (unsatisfied), passives (satisfied), and promotors (delighted). Afterwards, find out the difference between % of promoters and % of detractors.

A few of the other useful metrics include customer retention, response rates, engagement, and lifetime value.

3. New Customer Engagement Strategy

Next thing on the list is figuring out how to engage your new customers.

For that, you’re going to need a strategy.

Depending on the nature of your product and your customers, figure out the most effective channels to go after your customers.

In addition to in-app messages, what other ways can you interact with your customers?

Here are some options:

  • Email
  • Social media
  • Your own website/Search engines
  • Call/Text message

Find out the most effective touchpoints and go after your users.

4. Content for Engagement

With a list of touchpoints at your disposal, it’s time to come up with some actual content.

This could include:

  • Emails ­– to make things easier, create different templates to be sent at the different stages of the customer onboarding process.
  • Knowledge Base – you’ll probably spend most of your resources developing your knowledge base. This involves articles, guides, explainer videos, tutorials, and/or infographics.
  • Webinars – in addition to the above, you can plan out and conduct webinars to engage with your users.

Focus on creating content that helps your customers overcome their pain points, and brings you one step closer towards achieving your own goals.

5. The Right Tools for Customer Onboarding

Last, but not least, make sure that you’re using a few tools to help you execute your customer onboarding strategy.

Some popular tools include:

  • UserIQ– this tool helps with creating product tours, callouts, and more.
  • Mailchimp– a renowned marketing automation platform that can help you out with your email needs.
  • UserTesting– can record customers interacting with your application, providing insights about the user-interface.
  • Typeform– this tool helps you create forms and surveys for feedback.

Talk to your customer success managers to find out what they need.

Happy Onboarding

With an effective customer onboarding program, not only can you significantly reduce your customer churn, but also open doors to more conversions in the process.

In the end, it all falls down to how well you understand the customer needs, how well you align your business goals with them, and the effectiveness of your customer lifecycle marketing strategies.