Customer Onboarding 2019 - Regalix · a 3% increase in customer revenue. 4 While every touchpoint...

The CXO Guide

Customer Onboarding 2019Get the Most Out of It

www.regalix.com

June 2019

2 The CXO Guide to Customer Onboarding 2019 - Get the Most Out of It

Introduction

Most businesses think their work is done when customers sign on the dotted line, but in reality, that’s only the halfway point in the journey. Can you imagine what it would be like if an airline told us to find our own way to the aircraft once we purchased a ticket? No helpful web or kiosk check-in process, no ground staff assisting us, no smiling crew to welcome us on board the aircraft, no welcome drink or hot towel... sounds rather cold and dismal, doesn’t it?

Technology companies often have a way of putting their new customers through the wringer. They throw at them complicated interfaces, 100-page user manuals, terabytes of how-to videos, laborious sign-up processes and unhelpful help guides as a way of welcoming them onboard. Consider these numbers:

• Businesses lose 75% of new users within the first week.1

• 40 to 60% of free-trial users will use a product once and never come back.2

• B2B SaaS trial conversion rates are between 3% and 5%, which means that most businesses lose as much as 97% of their customers in the early trial period.3

Those statistics are alarming by themselves without the added complication of a highly competitive and volatile marketplace. Businesses cannot afford to have revolving doors through which customers enter and exit almost immediately. That’s a loss of time, resources, opportunities, revenue and more. According to reports, more than two-thirds of SaaS companies experience churn rates higher than 5%, which is the accepted industry standard for customer churn rates.

Creating a good ‘first impression’ with customers has a direct impact on revenues, as reported by McKinsey. They discovered that for every point increase in customer onboarding satisfaction on a company’s Net Promoter Score (NPS) scale, there was a 3% increase in customer revenue.4 While every touchpoint within the customer’s journey has the potential to maintain, deepen or end the relationship, none is as significant as the onboarding process. This is where the rubber meets the road — where every promise and claim made by the company is tested to see if they hold any water. Businesses that get this crucial step right create a long-lasting, favorable first impression on their customers, which could potentially lead to a beneficial and successful relationship that lasts for years.

The CXO Guide to Customer Onboarding 2019 - Get the Most Out of It 3

Customer onboarding and customer retention

It’s a popularly known fact that it’s cheaper to retain a current customer than to attract a new one.5 Experts suggest that acquiring new customers is 5 to 25 times more expensive than retaining existing ones,6 and that increasing customer retention rates by 5% increases profits by 25 to 95%.7 A 2015 study by Price Intelligently indicated that a 1% increase in acquisition affects a company’s bottom line by about 3.3%, whereas improving retention by 1% affects the bottom line by around 7%.8 In short, focusing on retention is twice as impactful as focusing on customer acquisition. As a result, businesses place an enormous emphasis on retaining customers and reducing churn. It’s a matter of survival.

Len Markidan, Head of Marketing at Groove, talks about two major milestones in the customer lifecycle. The first is when they sign up with a company and the second when they achieve their first success — their ‘aha!’ moment — with the product. Practitioners refer to this as the moment of ‘activation’. Most customer churn takes place between the first and the second moment.

When customers don’t understand the full functionality of your product or service and are unable to derive enough value from it, they tend to churn. Customer onboarding can help resolve this problem.

Not only does customer onboarding help the customer adapt your product to meet their need, but it also sets the tone for the relationship that you will have with the customer in the future. In the words of Neil Patel, a leading voice in marketing, “Onboarding is where we have the most control over how the relationship with our customers will unfold in the long run. If you can strike the right tone from the get-go, I’ve found that people will stick around for more.”

A positive customer experience, especially during the first test drive of the product or service, goes a long way in ensuring that customers remain with the company. Given this, it’s easy to understand why good customer onboarding practices are necessary for any business.

Besides helping customers achieve what they intended to achieve with your product, onboarding also provides the business with qualitative data that can be used to optimize the product or service over time, making it better at every turn. According to Sharat Akasapu, a product manager at Magoosh, a company that provides online test-prep services, “I can tell you from personal experience that we learn from our students every day — how to improve our product, what to add and what to change. Without them, we’d be lost when deciding on what next steps to take and we’d probably build a product based solely on intuition — something we never want to do.” 9


With businesses sharpening their focus on customer retention and customer experiences, there is rising interest in customer onboarding techniques and best practices.

If a customer doesn’t understand the context of your app, can’t immediately see its benefits or has a bad initial experience (slow loading times, clunky interface, etc.), you’ve likely squandered your

only chance from the get-go.”

Lesley Park at Framed (now Square)

Best practices when onboarding customers

When is a customer considered onboarded? When they’ve been through a specific number of training modules or when they’ve learned how to accomplish a particular task using the software? Some onboarding programs focus on helping a customer achieve their first success, while others are instrumental in helping customers grasp the real value of the product or solution. Deciding where the finish line of an onboarding program lies depends on the customer journey and what it will take to convert them into long-term customers. Technically, customers are never fully onboard. Most products and solutions are continually evolving; therefore, customers are continuously learning. Onboarding is not a destination. It’s a process that helps to build and cement strong, lasting relationships between customer and company.

Take the example of Slack. Slack is the modern-day poster child for customer onboarding, and has been for many years now. The team has not rested on past laurels; instead, they are continually monitoring and modifying their onboarding process, being sensitive to their customers’ needs and making the process easier, more intuitive and barrier-free. Slack’s workspace onboarding processes help users set it up quickly so that they’re not fumbling on their own once on board. And then there is Slackbot, the company’s biggest innovation in its onboarding process. The ever-helpful, hilarious little bot helps users navigate the complex world of uploading documents, sending direct messages and communicating in channels.

Here, then, are a few customer onboarding best practices that apply to any industry:

Make the onboarding process about the customer

It’s tempting to make the onboarding process all about the product or solution. After all, it wasn’t easy building that application, was it? And now that you have a paying


customer, it’s exciting to talk about all that the product can do, its various features and functionalities… perhaps, its history. However, in the midst of all of that, it’s important to remember that the customer bought the app for a purpose — to accomplish a certain goal or because they have a specific role that requires them to use the app. It’s important that we understand that purpose. In fact, in a study done by Regalix, State of Customer Onboarding 2018,10 41% of marketers mention ‘lack of understanding customer needs’ as a key challenge faced in managing their customer onboarding activities. For effectively onboarding customers, it’s essential that the onboarding team have access to all the necessary information about them. This is possible only if the team is aligned with the other customer-facing teams in the organization, such as the sales, marketing and customer success teams.

The purpose of onboarding is to ensure not just that users are well versed in how to use the product, but also that they can get their jobs done more efficiently using the product. Onboarding processes that take into account the customer’s perspective and reasons for making a purchase are highly effective in engaging users, helping them realize their ‘first value delivered’ moment and their ‘aha!’ moment. Here are some ways to accomplish this:

• Ask customers what their objectives are – The ‘I Want To…’ screen is incredibly important when onboarding new users. This helps businesses personalize the customer experience and helps the customer successfully realize their goals and objectives.

Picture this:

Quora, home to over five million questions and answers, employs screens that ask users to select topics that interest them when they register on Quora, to help make sure that the channels that the users see are relevant to them. This ensures that customers don’t see a blank slate when they first log in and don’t have to figure out what to do by themselves.

One of the problems with Twitter when it first launched was that users, once on board, were met with an empty slate and most often didn’t know what to do with it. Today, Twitter has changed its onboarding process and includes a screen similar to the Quora one that helps users decide who they want to follow and what topics they are interested in. That way, when a user gets into a system, there’s already something there for them to experience. Twitter has experienced greater success after it changed its onboarding process. In fact, Twitter discovered that once a user follows 30 people, they’re more or less active forever.


Figure-1

Quora's onboarding screen asks users to select topics that interest them


• Be respectful of a customer’s time and information – Information is the currency of the future, and it’s easy for businesses to get caught up in their desire for more and more information about their customers. While more data leads to better marketing, sales, products and customer support, a company that seeks unnecessary information about their customers comes across as untrustworthy. Customers, while they don’t mind sharing personal information for more personalized service, still guard their information closely. Customers feel fatigued when filling long, complicated forms and every additional field is a potential abandonment point.

Picture this:

Avoka is a company that is focused on helping wealth management companies deliver frictionless customer onboarding experiences. They suggest — in an article titled “12 Steps to Reducing Customer Onboarding Friction and Abandonment” — using autofills and validation services while maintaining the bare minimum number of fields for a customer to fill.11

Basecamp, the project-management tool, keeps things simple and easy when asking people to sign up for a free trial account. By limiting the number of fields, Basecamp reduces the number of reasons that could cause customers to be reluctant about setting up a free account. Basecamp also staggers ‘information asks’ across multiple screens and at different engagement points to enable customers to get into the system quickly and easily.

72% of customer onboarding teams have fewer than 10 people. This means they’re often too overwhelmed to sustain a white glove approach.20


Figure-2

Basecamp's simple sign-up process

Onboarding begins before a customer even signs on

The fact of the matter is that businesses begin the process of onboarding their customers when they send their first sales email or advertise on social media. The promises that sales and marketing make when wooing customers are the standards to which customers will hold the company to account. Every interaction, email and marketing collateral sent contributes toward the customer’s perception of the product or company. Lincoln Murphy, customer success evangelist and author, coined the phrase ‘seeds of churn’ in 2013 and went on to say that the seeds of churn are planted early on in the process. He gave the example of a company he consulted with, that had an aggressive outbound sales model where salespeople spoke to potential customers for the first time and closed the deal, all in one day. The company provided an email marketing service, and their tagline was “we send email, you make money!” While it was a catchy tagline, the reality was that customers were not making


money. Customers’ expectations were mismanaged, and as a result, the company lost far more customers than they were bringing in.12

Aim for quick wins

While customer onboarding may be a process and not a one-time activity, that shouldn’t distract businesses from ensuring that customers reach their ‘aha!’ moment as soon as possible. Instead of waiting for customers to complete the entire onboarding process before they derive value from the product or service, it’s better to ensure that customers have winning moments every time they log in and use the application. Consider a scenario in which a customer decides to try out a new project planning tool. They will first have to register for a free trial, then set their project up, add tasks and dates, invite multiple people to collaborate… if the customer’s ultimate ‘aha!’ moment is when the project is up and running and they are able to successfully collaborate using the tool, that’s a long way off from when the customer registered for a trial period. It’s better to break up the entire onboarding process into smaller bite-sized actions. Businesses will need to ensure that there are multiple milestones that are celebrated along the way. In the example above, it could be the setting up of the project with a name and logo. That could be the first win for the customer. And once they get one win, they move onto to the next one, and the one after… until they are fully integrated with the system.

Companies need to approach onboarding from the customer’s point of view and not from the features that the product has. That way, it’s easier to create bite-sized actions that customers can take, which will result in positive outcomes for them. Adapting quick wins to customer personas and their goals will help companies ensure they’ve got something for every customer. The quick wins method is based on actual psychology, especially the Principles of Persuasion by Dr. Robert Cialdini. Of the six principles listed, three of them — reciprocity, liking and consistency — are at work with quick wins.13

Personalize the onboarding experience

The one-size-fits-all onboarding approach is a myth at best. Customers have shown a distinct preference for marketing and sales efforts that are tailored to their likes/dislikes, needs and journeys. Why should it be any different with their onboarding process? Using data that has been captured through the sign-up process is the easiest way to ensure a level of personalization. A welcome page that greets the user by their name goes a little further in assuring customers that you are listening to them. Jira, the software company, uses a personalized greeting to welcome new users and nudge them toward building their profiles even further.


Figure-3

Jira's personalized greeting

Mapping the onboarding process to goals or personas ensures a more personalized way of moving customers toward their ‘aha!’ moment.

Picture this:

Canva, the design tool for non-designers, is used by customers for designing a variety of materials, from business logos to wedding invitations. When a customer registers on Canva for the first time, they are asked to select how they plan to use Canva. The templates and designs available to the user change depending on the selection made.

18% of organizations don’t conduct any evaluation of their onboarding process at all.21


Figure-4

Canva's onboarding process asks customers to choose how they are planning to use Canva

For the Canva growth team, activation is complete when a customer signs on and successfully publish their first design. The team follows a process of experimentation and testing as they try and improve activation rates across all their categories. Their early experiments boosted activation rate by 10 to 12%, which translated to thousands of additional users finding value in the product. The team looks for areas with high opportunity. For Canva, that could be channels that received high traffic but had low conversion rates. The team would then go ahead and experiment with different options to test assumptions and find ways to help customers engage better.

For example, the team found that their posters channel received a high amount of traffic, but users rarely went on to actually create a poster and publish it. The team went into research mode to find out why customers were dropping off. They tested the user experience to check if there was any misalignment in messaging and experience, they conducted surveys to find out if there were unforeseen reasons why customers would hesitate to create a poster - they even surveyed churned users to help them understand the cause for the churn. Churned users told them that they could not find what they were looking for in order to create their posters. Upon further investigation, the team found that users had various needs when creating a poster, from advertising a business to advertising an apartment available for rent. Given the vastness of the requirements, it’s understandable that most users failed to find the templates, icons, designs and stock art that they were looking for. The team rectified the problem by adding an interstitial that appeared during the onboarding process asking them what kind of posters they would like to design, which, in turn, helped them provide the right guidance to the customer. This simple modification in the onboarding process increased activations by over 10%.


Figure-5

Canva asks customers what kind of poster they want to create

These important interactions and touchpoints with customers during the onboarding process ensure that customers can accomplish their goals easily and efficiently now, and in the future as well.

Organizations can also choose to deliver content in a form that suits the individual learning styles of their customers. Training docs, live demos, explainer videos and onboarding playbooks are some of the assets used widely by marketers in onboarding their customers.14 VMware, which provides cloud computing and platform virtualization software and services, for instance, uses ‘how-to’ videos extensively in its onboarding process.

Link onboarding activities to moments of success

It’s very likely that most companies have established patterns of emailing customers, especially when it comes to converting free-trial customers to paying ones. Yet, a customer’s moment of success may come on day 3 and not on day 27. So why wait till day 15 or day 27 before sending the reminder email to the customer about upgrading from a free account to a paid one? This is why it makes sense to link customer communication (in-app messages, emails, phone calls, etc.) to moments of success, or a lack thereof. Lincoln Murphy gives the example of a company that he consulted with, where the average conversion time was 42 days on a 30-day free trial period. Using the method mentioned above, he was able to reduce conversion time to just three days.15


Declutter and train

Applications are becoming increasingly complicated with a plethora of features. Customers can be easily overwhelmed, especially if all the features are thrown at them simultaneously. When a child is taught the alphabet, it’s always either one letter at a time or as a group of a few letters, and not all of them at the same time. Similarly, customers need to understand basic functionality before moving on to more advanced processes. When Microsoft released Windows 3.1 in the 1990s, it came bundled with a game called Solitaire. While it seemed like an innocuous little card game, in effect, it introduced the concept of drag-and-drop to a generation of ‘command-line’ computer users. Similarly, Minesweeper introduced the concept of right and left click. Microsoft was able to creatively help users learn new techniques long before they entered the complex world of word processes, email communication and Excel.16

Tools Recent advancements in technology and digital solutions have contributed a great deal toward modern onboarding techniques. From being able to track how customers are using applications to personalization at scale, technology has made it all possible. Here are some popular tools that facilitate customer onboarding:

1. AppcuesThis is a popular code-free platform that you can use for onboarding. It includes all the bells and whistles such as in-app messaging, walkthroughs and other features to engage your customers. You can easily create segments that target specific customers and flows with customized styling and templates.17

2. WalkMeWalkMe allows you to build walkthrough tutorials for users. It offers cloud-based solutions. It lets you easily add interactive on-screen tutorials to your website or app, providing users with step-by-step instructions on how to complete tasks.18

3. IntercomIntercom shows you who uses your product, and makes it easy to personally communicate with them through targeted, behavior-driven emails and in-app messages.19


4. UserlaneUserlane is a navigation system for software, which works in any browser. It is both a customer onboarding automation platform and a user guidance solution for mid- to large-sized enterprise SaaS companies looking to increase engagement and activation via interactive performance support.

5. NickelledNickelled allows you to create, edit and distribute guides and tours for your customers. It can be deployed straight from the website, so that visitors can instantly access the information they need.

6. WhatFixThe WhatFix application is designed for small- to medium-sized businesses that want to conduct training and onboarding, and make UX improvements for their customers. It works on all popular browsers.

7. UserpilotUserpilot is a product experience software that helps teams understand product usage and increase adoption through behavior-triggered product experiences.

There is no lack of user onboarding tools, templates, guides and samples on the internet. Finding the right one for you will take time and experimentation.

ConclusionCustomers will not use a product just because it’s available. It’s much more difficult today than ever before to get customers to remain engaged. Yet, digitization is on the rise and customers have more need for technology solutions than ever before, hence the critical nature of the onboarding process. It takes determination, innovation, experimentation and a good nose for the job. It may be difficult, but it’s not impossible. After all, all frequent travellers were, at some point, first-time travellers. And the learning never stops. All aboard!

Technology companies lose 75% of their new users within a week.22


References:

1 https://andrewchen.co/new-data-shows-why-losing-80-of-your-mobile-users-is-normal-and-that-the-best-apps-do-much-better/

2 https://www.intercom.com/blog/designing-first-run-experiences-to-delight-users/

3 https://customer.io/blog/customer-retention/

4 https://www.cio.com/article/3260727/client-onboarding-revenue-and-hidden-cost-implications.html

5 https://www.business.com/articles/returning-customers-spend-67-more-than-new-customers-keep-your-customers-coming-back-with-a-recurring-revenue-sales-model/

6 https://hbr.org/2014/10/the-value-of-keeping-the-right-customers

7 Research by Frederick Reichheld of Bain & Company (the inventor of the net promoter score)

8 https://customer.io/blog/customer-retention/

9 https://www.intercom.com/blog/magoosh-customer-onboarding-experiment/

10 https://www.regalix.com/insights/the-state-of-customer-onboarding-2019/

11 https://www.avoka.com/blog/12-steps-reducing-customer-onboarding-friction-abandonment/

12 https://sixteenventures.com/seeds-of-churn

13 https://youtu.be/cFdCzN7RYbw

14 https://www.regalix.com/insights/the-state-of-customer-onboarding-2019/

15 https://sixteenventures.com/customer-onboarding

16 https://www.regalix.com/insights/using-gamification-to-drive-customer-engagement/

17 https://www.poptin.com/blog/7-onboarding-tools-to-improve-new-users-experience/

18 https://blog.upscope.io/5-user-walk-through-tools-which-make-onboarding-a-breeze-and-dou-ble-your-sales/

19 https://growthkitchen.com/top-7-onboarding-tools-to-keep-your-users-engaged-in-2017/

20 https://useriq.com/user-adoption-report/

21 https://useriq.com/user-adoption-report/

22 https://clutch.co/agencies/email/resources/guide-to-customer-onboarding-emails

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About RegalixRegalix is a customer acquisition and customer success company that re-imagines digital experiences across hi-tech, ad-tech and retail domains. The company has partnered with some of the largest global B2B organizations in their efforts at customer acquisition, growth and retention. Regalix works with businesses, supporting their customers through the entire journey to deliver reliable products and services in today’s subscription-based economy.

Regalix has a long history of creating award-winning ventures with enterprises through co-innovation and idea-driven frameworks that inspire companies to think different. Headquartered in Silicon Valley — Palo Alto, California — Regalix has offices in Europe and Asia.

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