Everyone knows the moment you land that BIG customer. There’s a tangible lightness in the atmosphere, and work tasks seem somehow much easier than before.

It’s an unforgettable moment of shared success to be relished by the whole team. You’ve worked hard for this, and it deserves to be celebrated.

For many businesses, however, this will also be the last moment of happiness they’ll experience with that particular customer. And it’s not because they sold them a crappy product or service.

It’s because of bad customer onboarding. ‍

Though many businesses know the euphoric feeling of unlocking sales and growth, far fewer can relate to the feeling of amazingly smooth customer onboarding. Why is that?‍

How bad can Customer Onboarding be in 2024?

Customer onboarding is both a poorly understood and poorly performed function in most companies.‍

According to Thomson Reuters, a whopping 89% of customers experience friction and frustration during their onboarding. 13% of those customers will even decide to switch to a competitor. 

Which begs the question: why haven’t companies figured out customer onboarding?‍

Because in terms of long-term business viability, it’s not just about creating a less frustrating experience for customers. Together with customer success, customer onboarding constitutes the most critical function of your business operations.

Let’s start by understanding why customer onboarding is such a game changer for business success.

Why is Customer Onboarding so important?

At the purest level, your customer onboarding (as part of the overarching customer success strategy) is directly correlated to your customer retention rate. And a poor customer retention rate – put plainly – will put you out of business in the long run.

Now let’s have a look at what good customer retention actually has to contribute to your long-term business growth:

• 67% of customers spend more in their third year buying products or services from a business than in the first six months (think Apple customers)
• Increasing your customer retention rate by just 5% can increase profits by 25 to 95%
• 82% of companies agree that retaining customers costs less than acquiring new ones

Looking 5 years down the road, a 1% increase in customer retention is also associated with up to 12% increase in a company’s valuation. 

We could continue running down benefits, but by now the point should be clear – good customer retention has a remarkably positive impact on the success of your business, and the payoff isn’t only seen in the long-term. Besides, no one ever complained about having too many happy customers around.

So now that we've painted a portrait of what good onboarding can lead to, let’s examine the alternative. 

What are the consequences of bad Customer Onboarding?

With bad customer onboarding, there’s more than just the missed revenue opportunity from having poor customer retention. But that alone is painful enough.

Consider mobile apps, which lose on average 75% of their active users within the first three days, and up to 90% of users within the first month. The culprit? Bad onboarding.

Going beyond customer retention, bad onboarding can lead to a whole other series of problems, damages, and costs that your organization will suffer from in the medium- and long-term:

• Customers experience more problems with your product = your operations and service workload increases‍
• Customers are less likely to recommend your product or service = your referral growth rate is stunted‍
• Customers feel cheated or misled by your company = your brand reputation is tarnished in the market

Taken in total, the missed opportunity of poor retention, plus the add-on detriments of additional operations work, stunted referral growth, and long-term damage to your brand paints a completely dismal picture of what life looks like on the side of bad onboarding.

This is actually the stuff that puts companies out of business.

Now, most companies will – in theory – understand their offerings inside-and-out. They should also be able to identify how their products or services create value for their customers – if not singularly, then with a range of value-generating uses or applications.

So why are so many companies completely failing at customer onboarding?

3 reasons why companies fail at Customer Onboarding

Firstly, it’s important to clarify – good customer onboarding is not easy. But that’s not the reason why most businesses fail at it.

Companies typically fail at customer onboarding because:

1. They don’t establish clear accountability within the onboarding process

Whether you’re a software business or a car dealership, customer onboarding can be a multi-step, multi-stakeholder effort, where each player in the process needs to own and excel in their role. 

Too often, once a sale is closed and the first handover is made, vital information is lost in the process. A crucial education moment is missed, and new “point people” might be thrown into the conversation without an introduction. When the onboarding process lacks clear standards, steps, and ownership, the results will vary – usually for the worse.

2. They set misleading expectations 

Sales and marketing teams often overstate the capabilities of their product or service in order to get sales over the line. Deals might be signed with promises that a missing feature or specialized service is coming soon, whether or not that’s been fully committed to in the roadmap. 

The end result can be a frustrating one internally, with the worst outcome that customers' expectations are not fully met. It's a surefire setup for failure in customer success.

3. They make too many assumptions about their customers

Generations of consumer appliance manufacturer’s will tell you that customers do not read the instructions manual. 

Yet, even today, many companies take the same old-fashioned approach to customer onboarding – assuming that their way of understanding the product will be the exact same for their customers. 

In reality, customers have no idea what you’re talking about. They aren't immersed in your product day after day as you are. And every extra step your customer has to take to “figure out” what you’ve sold them is one step closer to them dropping you for an "easier-to-use" competitor.

Summing up the Customer Onboarding problem

There are many, many more reasons why companies fail to get onboarding right. 

The truth is, most companies just don’t invest enough into understanding their onboarding problem and making improvements. Somehow, it seems easier to direct resources into acquiring new customers, instead of focusing on creating success with the ones you already have. 

In this article, we’ve proven that to be a wrong approach – at least, if you’re looking for long-term success. 

But, if you believe in the relationship that good customer onboarding has with sustainable business growth and success, keep reading. Here are 5 immediate steps that your team can take to build a winning customer onboarding experience starting today.

5 steps to create an optimal Customer Onboarding experience

Here's how to build a great onboarding experience that helps you retain customers:

1. Operationalize customer onboarding

Though most organizations have dedicated customer success units in charge of onboarding, far fewer will have integrated customer success operations as an indispensable part of their business operations.

Let’s unpack that a bit.

Customer onboarding (and to a broader extent, customer success) is an isolated business initiative in many companies. It exists in the chasm between the sale that preceded it, and the customer support (or absence thereof) that will follow. The business units outside of customer success engage with onboarding on a "need-to-know" basis: as in, “if there’s a problem, you’ll let me know”. 

But customer onboarding is not only a customer success job. To succeed at onboarding, you’ll need full buy-in from every stakeholder in the onboarding process, no matter what their job title is. For example:

If page-loading speed and performance is an issue, this is a customer onboarding issue.

If handover scheduling is an issue, this is a customer onboarding issue.

Like successful product launches or company-wide audits, good customer onboarding requires the onboarding process to be standardized, aligned with each of your teams, and carefully tracked over time. By making customer onboarding an operations priority, your teams will develop a higher understanding of both its gravity and of their individual roles in making it a success.

2. Under-promise and over-deliver

Now it’s time to start making changes to your onboarding process itself. The first change starts right at the top:

‍Set the right expectations.

So many sales and marketing organizations are focused on telling prospects what they believe their audience wants to hear. And who can blame them? It’s their job to sell products and services.

The problem for customer onboarding comes when the expectations set in the sales processes are unable to be met – at least, not within the expected timeline. Whether it’s a gross exaggeration of product functionality, or even the lightest “fluff” of the timeline, the expectation mismatch is typically the first step down the dark path.

“Instead of focusing on what your prospects want to hear in order to get a sale, teams should focus on what prospects need to experience in order to become a happy customer.“

That means, setting 110% realistic expectations (under-promising) and exceeding those expectations in the delivery (over-delivering). 

The crucial part here is the concept of under-promising.

“Under-promising” requires that the expectations you set with customers will be met with absolute certainty – spare your office going up in flames. The reality should be that in 99% of your onboardings, the expectations you set for your product, services, and onboarding experience should be systematic and relatively easy for your teams to exceed in delivering.

In other words, over-delivering should almost be the guarantee. So, what’s this look like in terms of customer experience?

Assuming the customer is a good fit for your offering, then the expectations you’ve sold to them should be more than sufficient. If you’re unable to meet their needs or their expectations, then it might not be a good fit to begin with – at least, not at this time. Keep in mind: no company ever gets a bad review for being honest and forthcoming in their sales process.

However, if a customer entered your sales funnel looking to solve a problem or need, and your offering indeed satisfies that need, then you can rest assured – it’s on your teams to screw this up now.

But by setting realistic expectations, the customer will go through their onboarding with the delight of receiving the promised experience at a bare minimum – and even further delight when you go above and beyond their expectations on the speed and quality of the process. 

3. Make observations – not assumptions 

There is an incredible opportunity to learn about your customers in the onboarding process.

You’ll learn things like what they care about, how they want to use your product or service, what problems they want to solve, how they want to feel about themselves, and more. It’s a formidable gold mine of market insight.

Unfortunately, most companies miss that opportunity because they’re looking for that "one-size-fits-all" onboarding solution, based on their own assumptions about their customers. Draft up the script, prepare the standard materials. Set it and forget it. 

And I’m here to tell you – this approach won’t work. At least, not for everybody. You’ll only begin to “wow” customers once you’ve baked observations into your onboarding process. Let’s dive into that a bit.

During the onboarding process, you learn a lot about your customers just by talking with them about your product or service. As the customer moves through their onboarding, it’s important that all of those captured observations are documented in an easily accessible, structured, and shareable format. 

With customer observations available to all your teams, you can steer the onboarding process in the direction that's most relevant for each customer, and skip the steps which might be a waste of time for both parties.

You can help a customer get to their desired result faster, and see the real value of your product sooner.

Now, scale this up to version 2.0, and you’ve got loads of structured information about your customers. You can use that to design tailor-fit onboarding experiences for different customer groups, and set better expectations (see above) based on having better intel.

All you have to do is observe, document your findings, and make them accessible to your teams throughout the onboarding process.

4. Be scientific about your follow-ups

Now it’s time for some very important fine-tuning: your follow-ups.

Too often, customer success teams create a “standard schedule” of communication with their customers, with rigid beginning and end dates. A customer goes through the standard process, and once they’ve completed the schedule, they’re “on their own” to use your product or service at their own will.

The problem with this approach is that in 99% of cases, the next time your company hears from that customer will be because of something negative – a problem with the service, a function they cannot figure out, a billing issue, or a similar complaint.

Your customers probably won’t call you to say how much they love your company. If anything, they might already be frustrated with you for some time, and have already turned sour. They might be at risk and you wouldn't even know it.

You need to time your follow-up communication with customers in order to get ahead of these moments.

An outstanding customer success organization helps customers solve "problems" before they become problems.

Granted, follow-up communication is a difficult task to optimize. For some customers, heavy-handed communication is preferred. For others, they’d rather not receive any outreach at all. The observations that you capture in your onboarding process can help you to determine that. Testing is another way to find out what follow-up cadence works best for your customers.

Either way, once you’ve identified the right follow-up formula for keeping your customers happy, you'll want to standardize that as a “long-tail” component of your customer onboarding process. Always be mindful of the goal:

Identify what they need to experience in order to become a happy customer. 

5. Automate customer onboarding for a win-win-win

If you really want to excel in customer onboarding, leveraging workflow automation for your process is a must. 

It's a hard truth: the more you grow and the more customers you add, the faster that quality onboarding becomes a real challenge to maintain. 

And if you have a multi-team, multi-step customer onboarding process (as in B2B software, financial services, etc.) orchestrating onboarding over email will become a quality problem for customers and a formidable log jam for your internal teams too. 

The good news is, automating the manual steps of your customer onboarding process is relatively straightforward when compared with the other steps on this list. 

There are a number of solid workflow automation tools on the market (here is a list of features to watch out for) as well as tools geared specifically toward operations workflow automation, like multi-stakeholder customer onboarding.

There are many, many benefits to building an automated workflow for your customer onboarding. In addition to facilitating each of the above-mentioned points, an automated and streamlined onboarding workflow can yield 3 distinct “wins” for customer success:

• A more quality onboarding experience for your customers
• Improved customer retention and lifetime value for your business
• Less operational grunt work for your internal teams

Best of all, with no-code/low-code workflow automation, you’re not held back by any technical limitations or implementation bottlenecks. Real improvement to your customer onboarding can happen as soon as you’re ready to get started.

Conclusion: Paving the road to Customer Onboarding excellence

As I mentioned at the onset of this article, good customer onboarding doesn’t come easily.

It’s a constant, ongoing cycle of understanding your customers needs, evolving your products and services to better meet those needs, and retooling your onboarding process to help customers become happy customers for the long run.

Taking the first step of making customer onboarding an operations priority is essential, on the way to setting and exceeding the right expectations, observing and documenting learnings, and fine-tuning your follow-ups and outreach. 

With workflow automation, you can facilitate each of these steps within a single end-to-end application. Instead of wasting time and energy trying to figure out onboarding, you can standardize the workflow to your customers’ exact requirements, and refine that as you go. The learnings and documentation are captured and shared across your teams, accountability is clear and transparent, and the "guesswork" is removed. 

As long as you’re committed to fixing your onboarding, you’ve made the right decision. It won’t be easy, but with a focused strategy and the right tooling, you’ll see improvements faster than you might think.

Perhaps, even, that next big customer might stick around after all.