Customer Onboarding Strategy: A Guide to Retain Customers

Imagine you need a project management tool to streamline collaboration with your remote team. While searching online, you stumble upon a website with several solutions and decide to purchase a 30-day trial subscription. 

You receive an email confirming your purchase but there isn’t information on any next steps. Taking matters into your own hands, you distribute accounts amongst your team who promptly log into the product. 

Unfortunately, they can’t figure out how to access its core features. 

You call the company’s helpline to learn how to use the product and its features. After waiting more than five minutes to reach someone, you hang up in frustration. 

At the end of the 30 days, you cancel your subscription because your team didn’t realize the product’s expected benefits. 

To keep you and your team aboard, the project management tool needed a customer onboarding strategy designed to help new users leverage features.

Onboarding strategies introduce customers to products or services, helping them become comfortable using their purchases.

It’s important for businesses to have customer onboarding processes in place because people form opinions within seconds. Companies with thoughtfully designed customer onboarding strategies can make strong first impressions.

According to Bruce Hogan, CEO of technology research firm, Software Pundit: “The single most critical thing that your onboarding process must do is get them to experience and understand the value of your product or service.” 

By helping customers quickly realize a product’s or service’s value, businesses are more likely to secure loyal, long-term customers. 

The Manifest asked 502 consumers about their onboarding experiences and preferences to help businesses understand best practices and develop onboarding strategies that keep customers.  

Our Findings

• The onboarding experience is important to 43% of consumers’ overall satisfaction with an online product or service.
• Most consumers (69%) conduct some amount of research before purchasing an online product or service but only 25% of consumers do thorough research prior to making an investment.
• More consumers (47%) prefer a structured onboarding process for online products or services than an unstructured process (29%). 
• The most popular onboarding features include guides and tips for product set-up and use (39%) and FAQ sections (28%) whereas greeting messages (7%), interactive walkthroughs and tutorials (17%), and available customer service representatives (17%) are least popular. 
• No matter their place in the customer lifecycle, consumers are equally as likely to abandon a product or service: 51% will abandon it within the first month of use while 49% will abandon it in the subsequent months.
• A successful onboarding experience would encourage 46% of consumers’ to increase their investments in a product or service. 

Develop a Plan

A customer onboarding strategy can help businesses generate greater customer loyalty by boosting consumers’ overall satisfaction with products or services.

For 43% of consumers, the onboarding experience is important to their overall satisfaction with a product or service.

To elevate your chances of satisfying customers, you should consider onboarding models before implementing an onboarding strategy.

There are two primary customer onboarding models: high-touch and low-touch.

You don’t necessarily have to choose either a high-touch or a low-touch model, however. You could also combine the characteristics of both models into your onboarding strategy.

Pulley, a WordPress maintenance and support company, incorporates aspects of both onboarding models into their process: “The onboarding strategy at Pulley is half automation, half personal touch to make the journey as easy as possible for both clients and employees,” said marketing director, Kasey Tveit. 

Whereas a high-touch model involves personalization and direct contact with customers, a low-touch onboarding model encourages customers to familiarize themselves with products or services on their own. A combination of the two models could feature automated processes and direct customer outreach by company representatives.

Ultimately, you should identify an onboarding framework that matches your product and the unique requirements of your users.

Know Your Audience

It’s important that you know your target audiences to properly determine whether a high-touch or low-touch model would better suit their onboarding needs. 

Most consumers (70%) do some level of research before investing in a product or service, with 25% thoroughly researching before making a purchase.

Although a majority of consumers perform research before buying products or services, you should build onboarding strategies to accommodate both types of users: novice and expert. 

Novice Users

A novice user has limited knowledge of technology. This type of customer is neither a tech expert nor an everyday tech user. 

Szymon Golyski, chief marketing officer at Channels, a phone solutions company, provides advice for building an onboarding strategy for novice users. 

He said: “Don't assume your product is easy to use because you know how to use it. Your customers aren't necessarily involved in your industry and may not understand things that are obvious to you.” 

A customer onboarding experience for novice users should focus on helping them learn product or service basics. 

By avoiding jargon and complex feature explanations, it’s more likely novice users will catch on and stick with your product or service. 

Expert Users 

An expert user likely understands the basics and wouldn’t find it difficult to navigate complex interfaces. Expert users speak technical jargon fluently, so in-depth instructions and advanced features likely won’t be challenging for them. 

Despite their technical savviness, expert users still require onboarding. 

You can attend to expert users’ needs by crafting an onboarding experience that exposes them to advanced features in greater detail. 

When developing an onboarding strategy, it’s helpful to put yourself in your customer’s mindset according to Ethan Taub, CEO of Goalry — a financial goal mall.

He said to ask, “What would make it better for you? Try to be unbiased if you can.”

You should build a customer onboarding strategy around the unique needs of your customer base. Whereas a base of expert users can quickly tackle advanced features, novice users require time and resources written in layman's terms to learn the basics.

Understand Customers’ Expectations

Effective onboarding experiences are designed around consumers’ expectations. 

To develop a customer onboarding strategy, you should consider your customers’ preferences. 

Different onboarding models enable businesses to attend to different audiences. A low-touch onboarding process, however, shouldn’t lead to a disorganized approach.  

Nearly half of consumers (47%) prefer a structured onboarding process for online products or services, and only about one-third (29%) prefer an unstructured process. 

As consumers favor structured onboarding experiences, you should ensure their onboarding strategies contain a clear framework for helping customers familiarize themselves with products or services.

The Manifest found that consumers have varying preferences for popular features in onboarding processes:

• Guides or tips for product set-up and use (39%)
• Accessible FAQ section (28%)
• Available customer service representatives (17%)
• Interactive walk-throughs and tutorials (17%)
• Greeting messages (7%)

By incorporating these features and resources to help new customers learn about products or services, you provide them with a structured onboarding process. 

A structured onboarding experience, however, should not limit consumers’ autonomy over the process. 

Consumers’ preferences for guides and tips over interactive tutorials and customer service representatives implies that they prefer to independently explore new products. You, therefore, should limit direct contact with new customers. 

Rather than scheduling meetings to walk new customers through their recent purchases, you should provide new customers with the resources to learn about products on their own terms.

The CEO of Passion Plans — a house plans and design platform — Thomas Jepsen, described a positive onboarding experience he had: “[A company] representative sent me a list of FAQ and answers that they had obviously been asked in the past before I could even ask them.”

The list of FAQs enabled him to independently explore the product and direct his own onboarding process without the help of a company representative.

As consumers prefer to learn about new products through independent methods, you should design a customer onboarding strategy with helpful resources like guides, tips, and FAQs to meet consumers’ expectations.

Set Clear Goals

When developing a customer onboarding strategy, you need clear goals. Setting goals for your customer onboarding strategy not only helps focus it but also enables you to assess its efficacy. 

Goals should focus on not only consumers' initial experiences but also their long-term engagement with products and services.

Customers are just as likely to abandon products within the first month of use (51%) as they are in the months following (49%). 

The data implies that an onboarding strategy is just as important in the customer’s first week as it’s in their fourth month using the product. 

To retain customers, it’s important that onboarding strategies attend to customers’ needs throughout their journeys with a product or service. This helps to mitigate abandonment.  

You should identify what you want to accomplish at each phase of your customer onboarding processes to ensure its goals align with your larger organizational objectives.

It’s important that your goals fit within the scope of a customer onboarding strategy. If not, the goals will be doomed to fail. 

A customer onboarding strategy, for example, may achieve the goal of retaining a greater percentage of customers after their fourth week using a product or service.

On the other hand, a customer onboarding strategy likely won’t be able to enhance brand recognition in new markets. 

After identifying what a customer onboarding process should accomplish, you can set specific milestones towards reaching your greater objectives. Milestones enable you to assess your progress, which helps you stay on track by demonstrating what is and isn’t working.

By consistently assessing the progress against your goals, you can adapt your strategies to promote success and secure customers' long-term engagement. 

Establish Quantifiable Metrics 

Measuring the success of a customer onboarding strategy requires metrics. By establishing a method for measuring the results of the strategy, you can refine the customer onboarding process to yield better outcomes. 

Customer onboarding strategies should extend beyond the initial familiarization stage because a successful onboarding experience may influence customers’ decisions to increase their spending on products or services. 

Nearly half of consumers (46%) stated that after a successful onboarding experience they would be more likely to increase their investment in a product or service. 

If you want to generate value from customers long-term, it’s important that you offer support throughout their journeys. This not only encourages lasting engagement and additional investments but also increases the likelihood of customers to recommend products or services given their greater level of satisfaction.

Word of mouth remains one of the most effective forms of marketing. According to one report, a majority of consumers (93%) trust the recommendations of friends and family when seeking information about brands. 

As customers may abandon products or services at any time, you should create metrics that measure your onboarding strategy’s overall success. The following metrics can help you understand your onboarding strategy’s effectiveness:

Customer Lifetime Value 

Customer lifetime value measures the total revenue a business may expect from a single customer. The longer a customer continues to make purchases, the greater their lifetime value.

Here’s how to calculate a customer’s lifetime value:

1. Determine customers’ average purchase value
2. Calculate the average purchase frequency rate
3. Divide the average purchase value by the average purchase frequency to calculate the value of the average customer 
4. Quantify the average customer’s lifespan by dividing the sum of customer lifespaces by the number of customers. 
5. Multiply the average customer value by the average average customer lifespan to generate the customer lifetime value. 

Source

By gathering the above data, you calculate your customer lifetime value, which is a meaningful metric. 

Customer lifetime value not only reveals the value of long-term customers but also enables you to implement and track measures to retain highly valuable customers.

Net Promoter Score 

Your net promoter score measures the percentage of customers willing to recommend their product or services. 

Consumers fall into three categories based on their answers to the survey question: On a scale of 0–10, how likely is it that you would recommend our organization to a friend or colleague? 

Based on their scores, customers fall into three categories:

1. 0–6: Detractors
2. 7–8: Passives
3. 9–10: Promoters

It’s simple to calculate your net promoter score after analyzing your customer survey data:

1. Divide the total number of promoters by the total number of survey respondents
2. Divide the total number of detractors by the total number of survey respondents 
3. Subtract the percent of promoters by the percent of detractors to find your net promoter score

Source

By determining your net promoter score, you gauge your customers’ satisfaction and loyalty. 

Metrics demonstrate the success of your onboarding strategy. 

Kennected — an automated SaaS lead generation funnel — co-founder and CEO, Devin Johnson, said: “Our customers feel comfortable using our service because we provide simplified explanations and agents to be at their side, figuratively, each step of the way.”

By measuring customer retention and tracking promotion online, they understand the impact of their onboarding strategy.

You can use metrics such as customer lifetime value and net promoter score to measure your customer onboarding strategy’s success and identify areas for improvement.

Gather Feedback to Track Your Customer Onboarding Strategy

Feedback should be a component of your customer onboarding strategy. By collecting feedback, you can better understand whether or not your customer onboarding strategy supports customers.

Questionnaires and engagement tracking tools help Charlotte Cobbaert, head of customer success at Learnerbly — a workplace learning platform — gather feedback from her clients. 

She said: “Another key factor is measuring success by having open conversions with your customers and getting their honest feedback.” 

After collecting customer feedback, you should use it to inform their onboarding strategies because no one knows customers’ preferences better than the customers themselves.

By surveying 502 US consumers, The Manifest gained insight into consumers’ onboarding experiences and preferences to identify several best practices:

• Most consumers perform research before purchasing a digital product or service, which implies that customers have at least basic knowledge of products or services features when starting to use them. 
• Your customer onboarding strategy should be crafted around your specific audience, generally either novice or expert. By understanding your user type, you’ll be more likely to develop an onboarding strategy that meets their needs.
• A structured onboarding experience is likely to satisfy most consumers’ expectations. However, dictating customers’ onboarding through tutorials or interactions with company representatives would likely detract from their overall level of satisfaction.
• Customers may abandon a product whether it’s their first week or fifth month using it. You should therefore develop an onboarding strategy with activities to support customers throughout their entire journeys.
• By establishing metrics, you can evaluate your onboarding strategy and ensure it meets your objectives.

An onboarding strategy developed following best practices fosters satisfied, long-term customers.

About the Survey

The Manifest surveyed 502 consumers across the U.S. 

About 37% of respondents identify as female and 37% identify as male. 26% of respondents declined to indicate their gender.

More than a third of respondents (36%) are from the south;  28% are from the midwest; 20% are from the west while 16% are from the northeast.

More than a third of respondents 38% are 55 years or older while 24% are between 35 and 54 years old. 12% of respondents are aged 18 to 24. 26% of respondents declined to provide their ages.