Your company tracks the costs of customer acquisition down to the penny—and with good reason. Measuring the marketing expenses that are being spent to attract new customers compared to the number of customers you serve provides a clear view of the financial health of your company. But what about the costs associated with customer onboarding and retention? Most companies don’t track these expenditures, but a well-thought-out client onboarding process reinforces a strong relationship with new customers, and tracking the cost of onboarding exposes areas that, with some adjustments, can trim costs while reducing churn. And that helps maintain the valued customer base you’ve worked so hard to build.
Studies show that closing a deal with a new customer can cost five times more than retaining a current customer. Moreover, the success rate of selling to a current customer hovers around 60 to 70 percent, while the success rate of selling to a new customer taps out at 20 percent.
“When it comes to revenue, customer retention is hugely important to consistent growth and financial planning,” explains marketing expert Will Tidey. “The more committed customers you have for the next financial quarter, the easier it is to make [budgetary] decisions.”
Let’s consider the factors that impact the cost of onboarding new customers. These include the following:
- Expenses incurred by your customer success and account management teams
- Expenses associated with operating customer engagement and adoptions systems and programs
- Customer marketing
Unchecked onboarding processes may be cutting into your profits. To gain a better understanding of what’s contributing to those expenses, let’s examine three ways investing in better onboarding processes will save you money, improve project management performance, and prepare your customers for continued success within the partnership.
1) Team Up Sales and Customer Success
Combining acquisition and retention sales strategies accomplishes two things: First, it creates a seamless, consistent, and supportive transition for customers. Open communication takes the guesswork out of understanding the relationship your sales team established with the customer while also clarifying goals, customer expectations, budget, timelines, stakeholders, decision-makers—any information that eliminates the risk of duplicated tasks and wasting valuable time.
Second, it presents a distinction between the unique services of your sales team compared to those provided by your customer success team. And that often results in a budget targeted for each team.
2) Automate Routine Manual Processes
Let’s talk about the amount of time your project manager spends manually updating spreadsheets, sending emails, following up on tasks with team members, and reaching out individually for feedback and information, along with manually updating the budget with the latest expenses, among other things. Guess what? You can’t afford it.
Studies show your PM spends at least 25 percent of their time every week manually updating project tools, ensuring a project moves forward with everyone informed and onboard. And almost half (40 percent) of workers spend at least a quarter of their workweek on repetitive tasks. The majority of those tasks require accessing different sources of information, such as updating spreadsheets or word documents.
Besides being incredibly time-consuming, what’s lacking in this process is authentic visibility that shows the project’s progress. Studies show that 73 percent of clients want a single source to refer to for work management and tracking. By using a system that provides a comprehensive project overview and automatically updates tasks, budget updates, and timelines, assigned team members and stakeholders can access a full view of the project, reach out via email directly from the system’s dashboard for task status requests, attach documents for review, track task time, and assign new tasks. Most importantly, they can do this at a time that is most convenient for them rather than waiting for answers from the project manager.
3) Get a Snapshot of Time Spent On Projects
It was Stephen R. Covey who said, “The key is in not spending time, but in investing it.”
In fact, a successful client onboarding depends on getting the most value possible out of the time allotted.
But obtaining an accurate reading of the time used for certain tasks within a project isn’t always possible. That results in blown budgets and missed deadlines. Experts found that 70 percent of customer onboarding projects miss their deadline, and 75 percent of customer onboarding projects went over budget. Most concerning is that 90 percent of additional onboarding costs that are client-driven are absorbed by the company.
When SaaSOptics—a subscription management software company for B2B—first approached GuideCX, they struggled to find a system that kept both the external and internal teams up to date on project status. In fact, providing reliable, current information was a challenge since it relied on manual data input on various systems that didn’t always sync well with one another.
The bottom line: their team couldn’t see how much time was costing them.
One of the most important features of the GuideCX system that helped streamline SaaSOptics’ onboarding process, along with other companies, is the time-tracking tool. With it, the customer success team can gather insight into how much these implementations cost. The PM can also take a granular view of tasks and analyze which ones took the most time and why. This data provides valuable insights into better team and resource management and helps to create more accurate client estimates.
Implement processes and tools that align departments to provide a seamless customer experience, simplify communication among stakeholders, automate common tasks while providing better visibility along with a system that tracks and identifies options for better time and resource management. When you do, you’ll be enlightened by your company’s investment in onboarding new clients and can move forward with a system that not only attracts new customers but ensures you keep them.