Reducing Churn: The Onboarding Experience

Client churn poses a significant challenge to businesses, impacting both revenue and growth.

Client churn poses a significant challenge to businesses, impacting both revenue and growth. At Caypho, we’ve seen that a key factor influencing churn rates is the onboarding process. This article delves into how creating a customised and well-thought-out onboarding experience can substantially reduce client churn.

Importance of the Onboarding Process

Onboarding is a critical phase in the customer journey. A well-planned onboarding process not only introduces clients to a product or service but also sets the tone for the entire client-business relationship. An effective onboarding experience can significantly lower client churn rates.

Common Issues Leading to Client Churn

We’ve seen two common issues that come up over and over, based on our experience via one of our other businesses and through those of our clients. An inadequate understanding of the products or services that have been bought by customers and mismanaged or very often no expectation setting.

Inadequate Understanding of Products or Services

Often, clients or stakeholders do not fully grasp what they have purchased or how to utilise it effectively. Sometimes it is the individual who bought it but more often it’s when a product or service has been procured for a whole team or department who haven’t been privy to the full sales cycle.

There are numerous factors behind this issue, involving either the client, prospective client, or the sales process — a complex topic in itself. However, our focus is on acknowledging that this issue does occur and understanding the consequences it brings.

Often, clients may not fully comprehend the entire range of products and services they have purchased, other available offerings that could complement their purchase, or how the product is intended to benefit them. It is crucial for clients to understand what they have bought, the benefits it promises, and how to implement it effectively.

Mismanaged Expectations

Secondly, expectations are not consistently well-managed, and in many cases non-existent, they are not explicitly established but rather assumed by both the buyer and the supplier. For instance, you might assume that an average client uses your product for two hours a week and evaluate their usage against this benchmark. If a client ends up using it only 20 minutes a week, by this standard metric, they fall short. This could lead you to believe that you have failed to meet the client's needs or if you tell them they only managed 20 mins vs an average of 2 hours, they feel it's been a waste of their time.

However, the situation changes if the client's expectations are clarified at the outset. Suppose a client intends to use the product for 15 minutes a week but ends up using it for 20 minutes, even if other clients use it for an average of 2 hours, it’s irrelevant. In this scenario, they exceed their own expectation by a third, marking it as a significant success from their perspective and encouraging continued use.

The crucial point here is that success is subjective and varies for each client. Unfortunately, these differences often become apparent only at the time of renewal, when it's generally too late to address any dissatisfaction. By understanding client expectations from the beginning, you can a) clearly know what they are, b) assess whether these expectations are achievable, and c) engage in dialogue with the client to align or realign expectations or offer a more suitable service if necessary.

The Solution: Building a Bespoke Onboarding Experience

Developing a customised onboarding process is a crucial strategy to address client misunderstandings and mismanaged expectations. By specifically tailoring this process to each client's needs, businesses can ensure better utilisation of their products and services, achieving a consistent understanding across all clients.

This bespoke onboarding should be comprehensive and engaging. It needs to thoroughly explain the product, prime clients on their expectations and the value they should anticipate, and include interactive elements to engage users actively. Such interactivity not only aids in understanding the product but also encourages clients to delve deeper into its benefits.

Furthermore, the process should provide extensive opportunities for clients to learn about additional products or services and preferences. It facilitates a single contact point for clients to involve colleagues in the onboarding process, offering varied experiences for different team members depending on their need for information.

Incorporating interactive elements and varied actions at each stage of the onboarding process is vital. By integrating questions, interactive elements, and distinct actions required for progression at each stage, the process actively engages clients, ensuring they are not just passively clicking through. This approach compels clients to pay attention, engage genuinely with the content, and leads to a more effective onboarding experience.

Opportunities for upselling can be naturally integrated within this customised approach. Businesses can prospect for future needs and help clients visualise how the product could be used in conjunction with other services offered.

Benefits of a Bespoke Onboarding Process:

Enhanced Product Understanding and Satisfaction: Clients gain a comprehensive understanding of the product or service, leading to better utilisation and greater satisfaction.
Effective Expectation Management: The process aligns with individual client needs, ensuring expectations are set and managed effectively.
Reduced Client Churn: Enhanced customer satisfaction and loyalty, stemming from a personalised onboarding experience, contribute to a reduction in client churn.

This approach not only elevates the client experience but also strengthens the relationship between the client and the business, fostering long-term engagement and success.

Conclusion

Understanding and meeting client expectations through an effective onboarding process is essential in reducing client churn. Businesses must reconsider their onboarding strategies, shifting from generic, one-size-fits-all models to more tailored, client-focused approaches. This is where Caypho steps in, aiding clients in enhancing their lead generation and customer journeys, specifically targeting the reduction of churn, which can be detrimental to businesses.

We have been running businesses since 2008 and we've learned that one of the most challenging aspects of business growth is encouraging clients to invest more in your products or services. It's a time-intensive process, and to lose clients because they don't understand what they have purchased, or because their needs are not being met, is a critical oversight - it’s stupid.

If you find yourself in such a situation, it would be prudent to seek assistance, as we are confident in our ability to help. This approach is not just about making a sale; it's about building a lasting relationship where both parties understand and value what is being offered, ensuring long-term success and growth.

Author: Jack Denton, Founder Caypho.