The Psychology of Onboarding: What Makes Customers Tick

Customer onboarding is more than just a set of steps to get new users up and running with your product or service; it’s a crucial touchpoint that can make or break the relationship between a customer and your company. Understanding human behavior and cognitive biases – filters through which we make decisions – can help you design an onboarding experience that not only welcomes new users, but also boosts satisfaction and builds long-term loyalty. Let’s dive into the psychology behind effective onboarding. 

1. The Primacy Effect: Onboarding Matters

You’ve likely heard this phrase a thousand times: “First impressions matter”. But why do they matter? People tend to remember the first information they learn, or the first thing in a sequence, more than what comes after. This is known as the Primacy Effect.

As onboarding is the first step in a customer’s post-purchase sequence, cognitive bias would suggest it holds more weight. This means the impression made in onboarding is more likely to be the one that comes to mind when a customer thinks of your product or service.

Tip: Evaluate Your Onboarding Process

This may seem like a given, but 90% of customers believe their onboarding experience could be better (Source: Wyzowl). 23% of customer churn can be attributed to ineffective onboarding (Source: Retently). Consider the following:

• Is your current onboarding process helping or hurting retention?
• Would your customers say you set clear, upfront expectations regarding the onboarding process?
• Are you utilizing an onboarding solution to streamline implementations, or are you bouncing between tools in an attempt to manage projects and reach customers? 
• How engaged are your customers during onboarding? Are they completing tasks on-time, or do they require follow-up to get work done?
• How long does your implementation process take? Could you provide value to your customers sooner?
• Are you collecting customer feedback during onboarding and using it to refine your process?

As you evaluate your current onboarding process remember that first impressions matter. 

2. Buyer’s Remorse: The Power of Early Engagement

Buyer’s remorse is the cognitive dissonance that happens when a person makes a purchase but feels dissatisfied after. Gartner’s 2024 Tech Trends Survey found that 60% of software buyers have experienced buyer’s remorse over technology they’ve purchased in the past 12-18 months.

The most significant factors leading to regret next to higher than anticipated costs were a slow or difficult implementation and a problematic handoff between sales and implementation. Buyers clearly feel frustrated with their post-sales experience.

Tip: Limit the window for buyer’s remorse

Engage customers immediately post-sale. Don’t give your new customers an opportunity to second-guess their purchase. Instead, carry the momentum from the sales process into onboarding by making contact early and setting expectations upfront.

One of the most effective ways to engage customers early is to leverage an integration with your CRM. At GUIDEcx, we’ve built integrations with both Salesforce and HubSpot so that when a deal is marked closed-won, new users are automatically invited to their onboarding project via email. One click launches their personalized project portal with the tasks and deadlines they’re responsible for. Plus, they can see the tasks your team is working on and overall project progress.

3. The Zeigarnik Effect: Keep Customers Engaged

The Zeigarnik Effect suggests that people remember incomplete tasks better than completed ones. At first glance, this may sound like a great thing; it’s good to remember what we need to do, and a positive to want to finish the things we start. 

The trouble is, this can impact productivity. Every time your brain reminds you of an incomplete task, it splits your focus and makes it harder to concentrate.

But fortunately, the Zeignarnik effect can be counteracted simply by documenting tasks that need to be completed. Having a plan to get things done removes anxiety, while keeping people motivated to move toward completion. 

Tip: Break down the onboarding process into bite-sized tasks or milestones

Presenting onboarding as a series of small, manageable steps can help keep customers engaged. Celebrate each small win with positive reinforcement to maintain motivation and encourage completion.

Check out all of GUIDEcx’s best practices for customer engagement here.

4. The Endowed Progress Effect: Momentum for Completion

Our brains love progress. When we see that we’ve already made headway toward a goal, it triggers a sense of accomplishment that motivates us to keep going. You may recognize the Endowed Progress Effect on full display with your favorite fast food apps and loyalty programs. Often, new users are given free points just for signing up – you now have a head start on earning rewards.

How does this translate to customer onboarding? Getting started with a new product or service may seem like a daunting task for many. Onboarding is not your customers’ full time job. Give them a head start by building in quick wins during the early stages of onboarding. Consider completing a few tasks together and then displaying progress visually to kickstart project momentum.

Tip: Display a progress bar

Motivate your customers to complete onboarding by visually showcasing where they are in the project. Better yet, have your progress bar update in real-time so customers can see how their actions directly impact progress. GUIDEcx intelligently forecasts a project end date according to project velocity and allocated resources.

Understanding the psychology of human behavior is key to crafting a more effective and engaging customer onboarding experience. By tapping into principles like the Zeigarnik and Endowed Progress Effect, while also minimizing the likelihood of buyer’s remorse, you can make your customers feel valued, motivated, and invested throughout onboarding.