Did you know that churn starts within the first 30 days of someone purchasing a product? According to data from Statista, in 2020, mobile apps lost an average of 89 percent of their daily active users within the first seven days after install and an average of 95 percent within 30 days.
What causes these churn rates? A lot of it comes down to the first impression customers get through your onboarding process. A poor onboarding experience means you lose current customers, potential future customers, and overhead, too. To combat these problems, keep reading to learn what a poor onboarding experience looks like, the associated hidden costs, and how to build a top-tier onboarding experience for your customers. Doing so will help you set up yourself (and your customers!) for success from day one.
How to Recognize a Poor Customer Onboarding Process?
Before we cover the costs of a poor onboarding process, it’s important to understand what a poor onboarding process looks like. Two major factors are at play here: lack of accountability and lack of transparency.
No Accountability, No Agreement
In a poor onboarding experience, the accountability is unbalanced. One party (let’s say the product provider) is expected to meet deadlines and respond quickly to questions, while the other party (let’s say the client) isn’t expected to be accountable for their responsibilities. The client expects the provider to make everything happen without much participation from their own end.
On the other hand, being able to hold each other accountable for deliverables creates a more effective onboarding experience. The client who purchased the product wants to use it as fast as possible. When both agree that being accountable is what they want to do, setting clear expectations for who is responsible for what, that becomes a good process.
When the customer does not know the progress or responsibilities of the onboarding process, this becomes a poor experience for the customer and the guide/PM.
“A lack of transparency means that bad news comes along all the time,” says Todd White, cofounder of GUIDEcx. “Nobody likes to hear bad news, but surprise bad news is the worst thing to hear. And bad news is always a surprise when you’re not in the loop in the first place.”
For example, let’s say a package is meant to be delivered to your house between 2:00 p.m. and 4:00 p.m., and a signature is required for delivery. If the carrier doesn’t communicate with you to let you know they’ll be late, you may miss the package. The package goes back to the post office, and you have to recalibrate what you need to do. The contents of the package may be great, but the bad delivery ruins the experience.
A good onboarding experience, like a good package delivery, involves active communication from both parties. If the timeframe has to change, the client and the guide must ensure each party is notified. This gives both parties the opportunity to reevaluate “go live” dates and reprioritize tasks.
What Does a Poor Onboarding Process Cost You?
A poor onboarding process costs more than you might think. After all, you only get one chance at a first impression.
“Neuroscience explains that we worry about the fear of the unknown, the anxiety of what will happen, and then we question value (am I getting out of this what I’m expecting?),” says Harris Clarke, COO of GUIDEcx. “If you’re not reinforcing value or providing antidotes for fear or anxiety, it causes a rough renewal, a customer that doesn’t evangelize you to others, and word quickly spreads when your experience is not fantastic.”
You put so much time and money into marketing, getting customers through the door, and providing a unique first impression. Don’t let all that effort go to waste due to a poor onboarding experience. You’ll lose customers and often create unnecessary overhead.
Customers make the decision to renew or not very quickly after implementation—typically within 30 days. It makes sense, then, that the number one cause of SaaS churn is bad implementation. In other words, your churn is deeply affected by your time-to-value.
It’s like being at a restaurant. Let’s say you’re at a restaurant where you have an amazing dinner. But your entree comes on a paper plate, and your partner gets their steak 20 minutes later, and there’s no steak knife. No matter how delicious the meals were, you won’t go back. Was it the product? No, it was the delivery. And it costs the restaurant a potential regular. Such is the case with a poor onboarding experience. No one wants to lose a valued customer.
Will a customer recommend your product or service to another company if they have a poor onboarding experience? You might think that the onboarding process wouldn’t affect reviews—after all, doesn’t a great experience with the product itself make up for any deficiencies in onboarding?
Not necessarily. The majority of the time, customers leave reviews very soon after the time of purchase, if they leave them at all. The further away customers get from a purchase, the less likely they are to leave a review.
Whether we’re talking about shoes purchased online or a business service agreement with a company, reviews are important. If there’s a phenomenal delivery at the onset, there’s a better chance of getting a good review or word-of-mouth recommendation.
The more work that you have to do to get someone to utilize your tool, the more cost is involved. Many companies don’t charge for their product or service until it goes live. If the onboarding process drags on and on, you’re left paying your employees without the benefit of the customer’s payments.
“At the last company I was with, I sold a CRM. It took up to nine weeks to deliver the product,” White says. “If I could deliver it in four weeks, that would be five more weeks of billing I could put on the books. That’s a lot of lost revenue.”
How to Save Money Proactively with a Great Onboarding Process
You don’t want to lose revenue and customers because of a poor onboarding process. You have worked far too hard for that! So here are our six tips for a great onboarding experience:
1. Track the Cost of Your Implementation
In order to make any improvements to your onboarding process, you must first have metrics you can measure. Most people who aren’t doing the implementation work itself don’t fully understand the number of hours needed for implementation. If you don’t know the hours, you don’t know the cost. If you aren’t yet tracking implementation tasks time and total implementation time, then you won’t be able to recognize success when it happens or “misses” that need to be fixed.
2. Keep Communication Strong between Leadership and the Implementation Team
“Let’s say I buy a piece of software and hand it off to a different team to implement,” White says. “Lots of times, that team doesn’t know what was purchased and the reason it was purchased. They don’t have the sense of urgency the check-signer has.”
Without that sense of urgency, the implementation takes longer than leadership expects, leading to frustration and a lack of unity across teams. When leadership and the implementation team can effectively track communication and progress, more responsible and active ownership takes place.
3. Give Customers Real-Time Updates
A lot of people don’t realize that their customers would be willing to move faster if only they knew how. Teams wait for their weekly status update in order for things to progress instead of giving customers real-time updates and things to do. Implementing onboarding software with real-time tracking creates transparency and accountability.
4. Leverage Video
“I don’t go to Home Depot to find out how to frame a wall. I go to YouTube!” White says. “Leveraging the methodology of DIY for your clients significantly decreases the number of how-to phone calls and delays in implementation projects.” Where possible, implement video training and messages. Keep them short and to the point to help clients complete tasks and move the onboarding process forward at a quicker pace.
Employees with different styles and abilities can vastly change how well an implementation project goes. To provide your clients with a consistently great experience, you want to ensure you standardize processes, communication, and cadence. Then it won’t matter if the client’s point of contact is Lisa or April—it will be the same great experience every time.
6. Consider GUIDEcx
Uber didn’t invent ride sharing, they perfected the customer experience. While taxi services and Uber are essentially the same thing—they get you from Point A to Point B—the difference is Uber provides the transparency customer demand so they continue to utilize Uber vs a taxi.
It’s the same with customer onboarding. While project management software could get you there, customer onboarding software is going to be a much better experience for everyone, leading to repeat referrals and lower churn. People using project management tools are at a disadvantage in the marketplace. Why? Because customer onboarding is not about completing a project: It’s about delivering a phenomenal experience.
As the category leader of customer onboarding software, GUIDEcx knows the pitfalls that can occur during the onboarding process. With over 250,000 successful projects, we know what it takes to guide you through a smooth onboarding experience. GUIDEcx provides a professional platform to help you overcome roadblocks and avoid mistakes in the first place because we’ve seen it all!
A poor onboarding process can cost more than you think. You may lose current customers and potential future customers, and you could create unnecessary overhead. It’s important to know what a poor onboarding experience looks like, the associated hidden costs, and how to build a top-tier onboarding experience for your customers so you can avoid losing hard-earned revenue.
To learn more about building an excellent onboarding experience, schedule a free demo.
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