01 What is Customer Onboarding? ...........................................................2

02 Customer Onboarding Best Practices ............................................5

03 Cutomer Onboarding Checklist ...........................................................7

04 Examples of Excellent Customer Onboarding ...........................8

05 Customer Onboarding Metrics .............................................................9

06 Conclusion ............................................................................................................11

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The Guide to Successful Customer Onboarding

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What Is Customer Onboarding?Customer onboarding refers to the actions you take immediately after

a customer buys a product from you. A customer’s post-purchase

experience sets the tone for their future relationship with your brand.

A positive experience can motivate them to become loyal lifetime

buyers, while a negative experience can drive them to competitors. The

onboarding process naturally unfolds through a series of predictable steps.

By optimizing these steps, you can improve your customer’s experience

with your brand and promote customer loyalty and retention. You can

optimize your customer onboarding process by following best practices,

imitating companies with exemplary onboarding procedures, and using

key performance indicators to track your onboarding performance.

Customer Onboarding vs. User OnboardingCustomer onboarding differs conceptually from user onboarding, although

in practice the two have common goals and they can overlap. Customer

onboarding focuses on guiding key decision-makers and administrators

at your client’s company through the onboarding process and helping

them use your product to attain their business goals. User onboarding

encompasses all users of your product at your client company, including

decision-makers as well as other users, and it guides them through

learning how to use your product to accomplish daily tasks. You could

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summarize this distinction by saying that customer onboarding

has a more strategic aim, while user onboarding has more

tactical objectives. While conceptually distinct, both types of

onboarding serve the common goal of improving your customers’

user experience so that they decide to remain customers. For B2B

software such as a service provider, and for companies using

a subscription-based business model, this distinction carries

important practical consequences. Training your client company’s

users on how to use your software is not enough to ensure

customer retention. You also need to persuade decision-makers

that your product can help them achieve their company’s

business goals.

Why You Need to Manage Your Customer Onboarding Process

Your customer’s onboarding experience determines their first post-

purchase impression of both your product and your company.

If your customer experiences difficulty in using your product or

contacting you for support, they may decide to request a refund

or let their relationship with you lapse. They will also be less likely

to refer you to others. Conversely, a positive experience makes

them more likely to remain a customer and to refer you to other

customers. Many companies have a loosely-defined onboarding

process. This leaves your customer’s onboarding experience

vulnerable to events that can lower their satisfaction, such as

implementation difficulties or technical problems. It can also fail

to draw their attention to the value they’re getting from using

your product. Both these outcomes can make them less likely to

become repeat buyers. When you follow well-defined onboarding

procedures, you increase your ability both to improve your

customer’s satisfaction and to increase their awareness of your

product’s benefits. This increases the likelihood of turning new

buyers into loyal lifetime customers who will advocate for your

brand to others.

The Stages of Customer Onboarding

The specifics of your onboarding process will vary with the nature of

your product, but in general, the process divides into five stages:

1. New customer welcome

2. Expectation setting

3. Training

Customers in each stage have distinct needs. The better you meet

these needs at each step, the better your odds of retaining the

customer at the end of the process.

1 New Customer Welcome

During the new customer welcome stage, thank the customer for

their purchase and point them towards the next steps they need

to take in order to begin enjoying the benefits of your product. This

stage can include actions such as introducing contact persons and

previewing what to expect next in the onboarding process.

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2 Expectation SettingIn the expectation-setting stage, you and your customer establish

what they expect to get out of using your product and what metrics

and benchmarks you will use to verify their satisfaction. Ideally, you

should introduce key performance indicators (KPIs) that can be

used to measure successful implementation.

3 TrainingIn the training stage, guide the customer through the learning

process they need before they can begin experiencing the value

of your product. For maximum satisfaction, your training process

should be as easy and short as possible. It should also highlight

how your product helps your customer with their needs and

how it impacts the KPIs you are using to measure successful

implementation. During this stage solicit feedback from your

customers on the value they are getting out of your product

and any challenges they are having with implementing your

product. This stage can also include supporting customers in

implementing advanced features or integrations of your product

with other software.

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Customer Onboarding Best PracticesYou can promote a positive experience at each stage of the

process by adopting customer onboarding strategies and taking

steps to optimize your procedures. Some of the most important

customer onboarding best practices include:

1. Using a standard onboarding procedure

2. Customizing your procedure for each customer

3. Defining your organizational structure

4. Creating clear communication channels

5. Collecting data to drive decisions

6. Setting goals with your customers

7. Making progress measurable

8. Tracking progress continuously

9. Making adjustments

10. Following up the initial onboarding process

Following these best practices will enhance your customer’s

onboarding experience and promote a positive long-term

relationship with them.

1 Use a Standard Onboarding ProcedureFailing to define your onboarding procedures leaves your

customers’ satisfaction to the whims of chance. Standardizing

your procedures empowers you to take control of the process and

optimize your customers’ onboarding experience. You can then use

a customer onboarding checklist to make sure all your bases are

covered when you bring on a new client. Make sure to document

your procedures in writing for reference and training purposes.

2 Customize Onboarding for Your CustomerWhile your general onboarding process should be consistent for

all customers, each customer requires personalized attention.

A key to customizing your onboarding process is to designate a

customer success manager for each new customer. The way you

handle automation can also help you deliver a more personalized

onboarding experience. For instance, your customer portal can

offer customized display options such as event-based email

communications or the cadence of customer contact.

3 Define Your Onboarding Organizational Structure

Designating a customer success manager for new customers also

helps you define the organizational structure for each customer’s

onboarding process. In addition to an account manager, you

should designate other key contact personnel at your company

and your customer’s company. This allows you to organize the

workflow of your onboarding process and include everyone who

needs to be involved.

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4 Create Clear Communication ChannelsTo promote a smoother onboarding workflow, you should establish

standard communication procedures as part of your standard

operating procedures. Ensure both key personnel at your company

and those at your customer’s company know who the appropriate

contact person is for specific situations, such as who to contact

for tech support versus who to contact for billing questions.

Additionally, specify which communication channels are preferred.

5 Set Goals with Your CustomersIn order for your customer to feel like your product is meeting their

needs, they need to see results that align with their business goals.

Discussing these goals during the onboarding process can help

you make sure your product steers your customer towards their

objectives. When a customer comes on board, schedule a time to

discuss their goals.

6 Collect Data to Drive DecisionsIn order to determine whether your product is meeting your

customers’ needs, you’ll need to collect data from your customers.

After determining which key performance indicators you need to

monitor, set up whatever data collection procedures you’ll need in

order to gather the necessary information. In addition, make sure

the data you gather is displayed in organized dashboards and

reports and made available to appropriate personnel.

7 Make Progress MeasurableTo measure customer progress towards their objectives, it’s

important to make their goals measurable. Use key performance

indicators to set objective numerical targets that represent the

successful achievement of your customers’ goals. Divide progress

towards goals into measurable benchmarks that can be used to

evaluate progress.

8 Track Progress ContinuouslyTo evaluate progress towards your customers’ goals, you’ll need

to set up a procedure to monitor progress on an ongoing basis.

Use dashboards and reports as tools to gather information about

customer progress. Schedule regular review sessions with your

customer to discuss reports and evaluate progress.

9 Make AdjustmentsTracking progress enables you to make adjustments in order to

ensure that your customer’s implementation of your product is

meeting their expectations. If they’re falling short of their goals or

experiencing other onboarding challenges, find out why and make

corrections. If they’re achieving their goals, identify what’s working

well, and determine whether it could be further optimized or scaled

up to achieve even greater success.

10 Follow up the Initial Onboarding ProcessThe onboarding process only represents the beginning of your

relationship with your customer. As your relationship develops, you

may be able to recommend additional ways your customer can

benefit from your product. In some cases, this may lead to upgrades

and a repeat of the onboarding process with a new product.

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Customer Onboarding ChecklistIt’s critical to have a standardized onboarding process which

includes a checklist that each Customer Success Manager

follows. This will ensure that each client has a similar and positive

experience. Below is a sample checklist of what you could include:

Schedule a kick-off call:Define the goal, scope, timeline, and key milestones

for onboarding.

Set up a technical meeting:Understand what systems need provisions for customers,

new users, data imports, etc.

Give appropriate training:Determine the type of training the customer needs to

undergo and make sure it is delivered.

Schedule a kick-off review:Have a call, in-person, or virtual meeting with

the customer to go over the processes needed

for onboarding.

This checklist will keep all Customer Success Managers

on the same page and ensure that all customers have a

seamless onboarding experience.

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Examples of Excellent Customer OnboardingYou can improve your customers’ initial experience of your brand by

modeling examples from companies with exceptional onboarding

processes. Here are four examples of companies that excel in

specific aspects of onboarding.

1. Using a standard onboarding procedure

2. Customizing your procedure for each customer

3. Defining your organizational structure

4. Creating clear communication channels

5. Collecting data to drive decisions

6. Setting goals with your customers

7. Making progress measurable

8. Tracking progress continuously

9. Making adjustments

10. Following up the initial onboarding process

EtsyEtsy provides an e-commerce site where vendors can sell

handmade gifts, clothes, jewelry, and other items. When vendors

are setting up a shop on Etsy, the site provides a progress meter

showing them the steps in the process and how many items they’ve

completed. This illustrates how you can help walk customers

through the onboarding process.

DropboxDropbox hosts a cloud storage space that makes it easy for teams

to share files online. To make file sharing easy, Dropbox breaks

instructions down into simple steps with buttons that guide users

through tasks. This exemplifies how you can make the onboarding

process user-friendly by keeping steps as simple as possible.

SlackSlack offers an online communication and collaboration platform

modeled on social media that serves as an alternative to email. To

help customers use product features, Slack’s menu includes callout

captions with tutorial instructions. This demonstrates how you can

simplify the onboarding process with user-friendly training tools.

TotangoTotango provides companies with solutions that lower churn,

increase revenue, promote adoption, and scale success. Totango’s

Spark platform includes an Onboarding SuccessBLOC with

playbooks for success, automated workflows, email communication

templates, and user-friendly KPI dashboards that display customer

progress in the onboarding process and let users see how close

they are to achieving their goals.

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Customer Onboarding MetricsTracking onboarding metrics can help your customers measure

their success in using your product, and it can also help you

measure the effectiveness of your onboarding process in

generating customer satisfaction. Some of the most important

onboarding metrics to track include:

• Customer lifetime value

• Activation rate

• Net promoter score

• Churn rate

• Average churn time

Each of these key performance indicators tells you valuable

information about your onboarding process and how it affects your

customer relationships. In addition to these KPIs, there are other

onboarding metrics you can track. Select the metrics that best

meet your business model and goals.

Below we’ll explain more on each of these metrics and how to

calculate them.

Customer Lifetime ValueCustomer lifetime value (CLV) measures the average amount of

revenue generated by each customer over the lifetime of their

relationship with you. It can be calculated by multiplying the

average value of each purchase times the average number of

purchases each customer makes. The longer your relationship

with your customers, the more purchases they make. This means

that the effectiveness of your onboarding process in promoting

customer loyalty directly impacts customer lifetime value.

Consequently, calculating lifetime value can help gauge how well

your onboarding process is working.

Activation RateActivation rate measures how actively customers are actually

using your product after purchase. For software as a service (SaaS)

providers, this serves as one of the most important onboarding

metrics for measuring customer engagement and satisfaction.

You can track the activation rate by defining and tracking actions

that reflect the use of your product, such as sign-up, installation,

and selection of dashboard settings. If you notice activation rates

are low, you can raise them by taking steps to boost slow product

adoption. For instance, you can use email reminders to encourage

customers to carry out onboarding actions.

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Net Promoter ScoreNet promoter score measures how likely customers are to

recommend your brand to others. It depends on customer

satisfaction, so it reflects the effectiveness of your onboarding

process. You can measure net promoter score by taking surveys of

how likely customers would be to recommend you on a scale of 0

to 10. Customers who rate you a 9 or 10 count as promoters, while

those from 0 to 6 represent detractors and those in between are

passive. Subtract detractors from promoters to determine your net

promoter score percentage.

In the SuccessBLOC Marketplace, you can find a prebuilt scorecard

for Voice of the Customer (VOC), that allows you to track the overall

NPS across your entire customer base. It allows you to track specific

NPS metrics based on the stage of the customer journey:

% of Promoters - Track your overall % of Promoters

% of Detractors - Track your overall % of Detractors

% of Passives - Track your overall % of Passives

Churn RateChurn rate measures how frequently customers stop doing

business with your brand. It reflects customer satisfaction and

serves as an indicator of onboarding effectiveness. You can

calculate churn rate for a given time frame by taking the number of

customers you lost over that period and dividing by the sum of the

number of customers you had at the beginning of that period plus

any new customers acquired during that interval.

Average Churn TimeIf customers are churning quickly, it may reflect them leaving early

in the onboarding process. Average churn time tells you how rapidly

customers are churning. You can determine the average churn time

by totaling the amount of time your customers stay with you and

dividing by the number of customers. You can drill down further by

tracking how many customers churn before a certain amount of

time into the onboarding process or before taking a designated set

of onboarding actions.

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ConclusionYour onboarding process sets the stage for your relationships with

new customers, directly determining your satisfaction, retention,

referral, and revenue rates. Follow the tips in this guide to optimize

your onboarding process for improved customer relationships

and increased business results. Explore how Totango can help

you jumpstart your onboarding process with our comprehensive

and customizable solutions. Contact us to request a demo or try it

yourself for free today!

Learn more online: totango.com Request a demo: totango.com/request-demo/ Email us: hi@totango.com