The central tenet of any churn prevention strategy is to make your product indispensable to your customers. If they decide to leave, if they decide your product isn’t for them, then something has gone wrong in your customer lifecycle. While a degree of churn is inevitable, there’s so much you can do to minimize its blows to your revenue.
The best way to do this is? Show your customer exactly how to use your product and demonstrate its value at every possible opportunity. It starts during the customer’s onboarding. These formative experiences, when your customer first starts using your product and gets a feel for your organization, are what we call real make-or-break territory.
If your churn rate is high, it’s always a symptom of a failing somewhere up the line. There are many reasons for churn; the prices might be too high for some; your product could have a few too many glitches; or it just isn’t living up to its reputation.
But truthfully, customers leave because they haven’t realized the true value of your product. In the State of Customer Churn 2023 and the State of Customer Onboarding 2023, we wanted to examine customer churn through a microscope and discover the impact good – and bad – onboarding has.
In this article, we’re going to delve into why good customer onboarding is every organization’s knight in shining armor. We’ll share the tips and tricks the world’s leading CSMs use to make their onboarding process seamless.
Why customer onboarding is critical to preventing churn
We spoke to two C-suite leaders to truly understand the significance good onboarding plays on the fate of customer churn.
“It’s extremely important – the onboarding stage sets the tone of the ongoing relationship and is key to developing deep customer relationships. Plus, ensuring success expectations are set and worked towards, to then ultimately demonstrate product/service value and keep the customer successful and renewing. This stage of the customer journey should not be overlooked or underestimated.”
– Melanie Lawn, Chief Customer Officer at Forecast
“Onboarding is huge in deciding the fate of customers. if you don’t successfully get customers deployed and quickly demonstrate value there’s a huge churn risk. I definitely feel like customers are less patient than they used to be, given they are under a lot of economic pressure.
I’m getting more requests for concessions if the software is not providing value in a few weeks or months, which is why setting proper expectations around timing and resources that need to be in place to hit deadlines is so important.”
– Michelle Wideman, Chief Customer Officer at Silverfort
Clearly, onboarding is a process that cannot be overlooked. But how can CSMs nip churn in the bud and set their customers up for long-term success?
Here’s how you can lower your churn rate by harnessing the power of effective onboarding:
- Reduce your time to value
- Enhance product stickiness
- Identify at-risk customers
- Keep track of your customer health score
- Review your onboarding process often
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Churn prevention #1: Reduce your time to value
With today's mounting business pressures, companies need solutions that deliver value from day one.
As The Alliance’s Head of Client Insights & Success, Courtney Elyse Jones, explains:
“Time to value (TTV) means this: from the first point of use, until the moment the end-user realizes a product’s value. TTV has a dramatic impact on product adoption and therefore continued use.
“Reaching this point quickly, and with little effort on the customer’s end during the onboarding process, signifies how effectively and efficiently a product or service enables new users to reach their desired outcomes.
“When designing customer onboarding processes, it is therefore important to optimize the journey by reducing time to value, ensuring that customers quickly perceive and understand the product's value to encourage long-term use.”
The path is clear - transparent, streamlined onboarding to rapidly boost customer success. This approach deepens engagement through promptly fulfilled expectations.
When clients experience your impact firsthand, loyalty compounds over time through a cycle of rising returns.
The message rings loud and clear: Innovative leaders seeking growth tend to orient processes around timely value. The rewards speak for themselves.
One survey respondent in our State of Customer Churn 2023 report revealed just how important it is to “deliver an outstanding onboarding experience” and its effect on reducing at-risk customers. They claimed that through constant optimization of your onboarding process, you’ll notice a faster time to value.
Churn prevention #2: Ensure product stickiness
An effective onboarding process that increases product stickiness is key to lowering customer churn rates.
When users first start using a product, they are evaluating whether it solves their needs and provides enough value to justify continued usage and payments. A sticky onboarding experience essentially gets users "hooked" on leveraging the key features that drive the product's core utility.
There are a few best practices to increase stickiness – such as in-app tutorials that walk new users through main workflows step-by-step. Additionally, setting up feedback loops, like in-app surveys and prompts for reviews, helps tailor products to match user needs. Gamification tactics also boost engagement, whether through points-based reward systems or creative onboarding quests.
The overarching aim is to have new users realize core value from features they will continue benefiting from. This entrenches the product as an indispensable tool in their workflow. By focusing onboarding on building retention drivers rather than one-off novelty, products become enmeshed in long-term user habits. The end result is higher customer lifetime value through reduced churn rooted in strategic stickiness.
Churn prevention tip #3: Identify at-risk customers
The phrase “to nip [something] in the bud” couldn’t be more applicable to onboarding.
Onboarding reveals the first clues of who might need extra support. It acts as a “break-in” period where you can note who misses key milestones or deadlines and see who lacks engagement or struggles with concepts.
Then you can promptly intervene with helpful resources or guidance tailored to their challenges. Early identification leads to faster resolutions, better retention, and customers who feel cared for, are not forgotten.
The most popular methods customer success professionals use to identify at-risk customers during onboarding are:
- Evaluating the progress of customers through milestones and identifying any bottlenecks, delays, or incomplete steps.
- Tracking customer engagement metrics such as login frequency, feature usage, and time spent within the platform.
Another great way to ensure one eye is always on your customer health is by, quite literally, monitoring the customer health score metric.
Churn prevention tip #4: Keep track of customer health score
The health score of your customers is pivotal in devising strategies that either sustain or enhance their continuous interaction with your product or service. And you can detect this as early as onboarding.
Your customer health score needs to be monitored continuously as the post-conversion journey for the customer can be volatile and susceptible to the elements. Anything can change for the customer from the point of sale, which is why a watertight, carefully considered customer onboarding process is integral to actualizing time-to-value (TTV) and sustaining product appreciation.
Now, a health score is an incredibly personal and unique metric depending on the organization. It's quantifiable, enabling trend analysis and reporting which executives and board members appreciate.
Understanding which customers haven’t completed their first tasks, viewed your welcome video, engaged with the resources provided, or even first logged in, can indicate red flags early.
Keeping close tabs on which new customers don't hit key onboarding milestones can transform early retention when you apply a customer health scoring system.
1. Define customer health
First, clarify precisely what defines success for new users – where should they be at 30, 60, 90 days? Map engagement markers that suggest happy, loyal users down the line versus at-risk signs.
3. Create a scoring system
Next, a weighted scorecard quantifies each metric, synthesizing a reliable health assessment. Frequent positive behaviors raise scores; early dissatisfaction lowers them. Validate over time that higher scores accurately reflect smoother onboarding and longer retention.
4. Segment your customer data
With enough data flowing through the system, distinct tiers emerge – the score sweet spot for thriving users versus at-risk accounts missing milestones. Segment users by health rating for easy monitoring. Does additional outreach lift struggling new customers? Do rewards engage top performers?
5. Visualize your customer health score
Accessible visualizations let teams instantly gauge individual user health post-conversion. When core goals frame the system effectively, these quantified insights guide smarter decisions across onboarding to curb early churn risks.
Spotting lags through health scoring offers a powerful lever to optimize user adoption from signup onward.
Customer Success Collective
Churn prevention #4 tip: Reviewing and updating the onboarding process
Since customer onboarding sets the tone for the whole post-sales experience for the customer, it’s important to iron out the kinks and make way for new improvements. Constantly re-evaluating what works and what doesn’t work, creates an ever-evolving process that reflects your customers’ needs and highlights your product’s value.
In the survey for our State of Customer Churn Report, we asked customer success professionals how often they review and update their onboarding process. We wanted to gauge the frequency of these updates, to spot if there were any common practices.
The majority of participants said they review and optimize their onboarding process every quarter/every three months (22.8%), followed by 18.5% of participants admitting to review theirs annually, only 11% reviewing their onboarding process every six months, and even fewer rigorously shaking things up every month (7.6%)
10.2% of participants in our survey claimed that they reviewed it “constantly”, with 6% of people claiming to review it every week. An unclear pool of people identified that this is a failure on their company's part and a stagnant onboarding process is a reason for their hire, or that this optimization was the responsibility of a different team to theirs.
On average most CS professionals who review their onboarding process every three months (or quarter) engage with their customers every month after the onboarding process.
Interestingly, those survey respondents who claimed that their top reason for customers churning in 2022 was due to a “lack of perceived product value” only reviewed their onboarding process once a year. It begs the question of whether a refreshed onboarding process would benefit the churn rate by helping the customer realize value sooner.
TL;DR: Mastering customer onboarding to prevent churn
So there you have it! Onboarding certainly isn’t something to snooze on. As we've seen, it's the make-or-break moment where customers form those all-important first impressions of your product. Treat it right, and you'll be on the path to loyal, engaged long-term users from day one. But botch it, and even the most profitable customers can slip through your fingers before you know it.
The main themes to keep in mind as you craft your onboarding strategy are:
- Make value plain to see, keep customers engaged, get ‘em hooked on those sticky features, and monitor health so you can jump in if someone starts going awry.
- Follow the best practices we outlined step-by-step, and churn will slowly but surely start to dip down. (Though let's be real - onboarding's a moving target and you gotta keep improving that process constantly if you wanna stay ahead.)
So get ready to transform that onboarding – your churn fighting game depends on it!
