Customer retention today is more challenging than ever before, not only because customers have more choices, but also because they’re willing to exercise these choices if the products they’ve purchased don’t meet their needs.
An important driver of this change is the arrival of the “subscription economy.” As Zuora CEO, Tien Tzuo, explains, “in this new era, it’s all about relationships. More and more customers are becoming subscribers because subscription experiences built around services, meet customers’ needs better than the static offerings of a single product.”
So how can companies compete in this environment and retain their customers?
It starts with customer onboarding. The most effective, engaging, and scalable way to drive customer retention is to place customer needs and desires at the center of your efforts — at every stage of the customer lifecycle.
This article hones in on the onboarding process and its impact on customer retention. Read on for the broad brushstrokes of what an onboarding program should look like.
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Prioritize Customer Onboarding to Decrease Churn
One of the most effective ways to keep customers satisfied is by ensuring they quickly find value in your product through a strong onboarding program.
What is Customer Onboarding?
Customer onboarding refers to the training and educational activities that enable your customers to effectively engage with your product over the long term.
This includes new customers just starting out with your technology, as well as existing users who may need training on new product features or refresher material they can refer to as needed.
How Can Onboarding Reduce Churn?
As Lincoln Murphy, author of the book Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, explains, “Proper onboarding isn’t done to prevent churn; it’s done to ensure the customer achieves their desired outcome. Retention comes from that.”
A strong customer onboarding program is based on the specific needs of each user and takes into account their respective level of knowledge.
In addition to these two components (needs, knowledge), onboarding content must also communicate specific value to your users. In other words, it must be clear why they should care about your product and how it will make their jobs easier. The driving force behind your customer onboarding program must be delivering value to your customers.
Establish value for your customers early and often through engaging and efficient onboarding practices. As you can see below, investing in a customer onboarding process early can have an increasingly positive impact over the long term.
- Time-to-First Value (TFV)
The more quickly users find value in your product, the more likely they are to adopt it in the first place. An effective onboarding program keeps the TFV rate as low as possible.
- Adoption
A low TFV provides the foundation for long-term adoption. This adoption is supported by ongoing onboarding opportunities that progress in line with user maturity and their increasing comfort with your product.
- Renewal
Product adoption and engagement levels set that stage for a continued customer relationship or, in this case, customer renewals and/or expansion.
- Lifetime Value
For SaaS companies in particular (but certainly relevant for other industries as well), lifetime value is based on a strong foundation of active, engaged users who understand the value of the product and experience that value regularly.
It’s also important to keep in mind that the customers who were onboarded when your company signed the contract will not necessarily be the same users a year from now. Current employees switch teams or leave the company, while new users may join the company to take over their roles. The reality of this type of turnover means that customer onboarding should be a replicable process available as needed. And remember, long-term customer success and retention are often a direct reflection of a customer’s onboarding experience.
Build Your Customer Onboarding Program
Here is a simple three-step process to create a successful onboarding program.
1. Assess Your Unique Onboarding Needs
Before you dive into the details of your onboarding program, take inventory of what you currently have in place and what content needs to be developed. When evaluating the current state of your program, consider the below questions to guide your needs assessment and determine where there are gaps:
- What barriers to success are customers facing today?
- How are you currently delivering content?
- What process improvements can be made?
2. Structure Your Program to Address Those Needs
After completing your needs assessment, the next step is to build the perfect onboarding program for your organization. We’ve outlined a few questions to help you navigate this process, starting with the program structure:
- What is your customers’ path to success?
- What technologies support onboarding?
- How can you drive students to your onboarding program?
- How will you measure success?
3. Design Content That Reflects Your Goals
An onboarding program can’t exist without content to support it. But it can be overwhelming to figure out where to start, especially if you don’t have a pre-existing framework in place. As you consider where to start, think about the low-hanging fruit. What onboarding content can you create today that will make the largest impact? Here are a few ideas to get you started:
- Try building content using existing resources.
- Create content that answers the FAQs your support team receives.
- Identify which knowledge articles are downloaded or viewed most frequently. Build more content around those topics.
Creating a strong customer onboarding process is no easy task. As you go through the steps of evaluating your program and breathing new life into it, always keep the customer journey in mind. Do so, and you’ll go a long way towards retaining your customers and decreasing churn.
And remember, you can get 4 more retention strategies with our free ebook. Download it here.