You can't win revenue at onboarding…but you CAN lose it

In this Propel24 session, Aaron Thompson, CRO @ SuccessHACKER, discusses why customer onboarding is the key to securing revenue, how to make it effective, and five revenue streams you should explore with every customer.

The session focused on:

• Why customer onboarding and professional services are so critical
• Elements of successful customer onboarding
• Challenges in customer onboarding
• Revenue streams every customer offers
• The real impact of onboarding on each revenue stream

Here are the key takeaways from the session. 

Leveraging the inherent vulnerability in customer onboarding

The customer onboarding stage is widely regarded as the most critical, and for good reason. 

A staggering 90% of customers who churn do so within the first 30 days – underscoring the importance of onboarding in shaping the overall customer lifecycle. 

When a new customer decides to onboard a product or service into their organization, they're essentially taking a risk. Whether they're an executive stakeholder or a dedicated champion tasked with selling the new solution to their team, they're in a vulnerable position. This vulnerability extends to all involved parties, from stakeholders to end users to system administrators. However, within this vulnerability lies an opportunity for leverage.

By providing a positive onboarding experience, you can establish a strong foundation for the relationship and mitigate potential issues down the line. A well-planned customer onboarding process will show up as improved retention, upsell opportunities, and higher customer satisfaction.

Conversely, a poor customer onboarding experience can have long-lasting negative effects, damaging the relationship irreparably.

4 key challenges in customer onboarding 

Aaron shed light on the four key challenges that arise during customer onboarding:

1. Relationship transition: For customers, transitioning from the initial engagement with the sales team or product to the onboarding phase involves a shift from personal preference to business decisions. This can create friction as customers move from the top of the sales funnel to the bottom. 
2. In enterprise sales, where personal relationships are often cultivated, this transition may involve being handed off to the implementation or onboarding team, which can leave customers feeling vulnerable. This handshake between teams can be crucial, ensuring a smooth transition while addressing the customer's evolving needs and concerns.

2. Siloed data:  Ensuring that all customer information gathered during the initial stages seamlessly transitions to later phases of the funnel is a common challenge. This data transfer is key to maintaining continuity and addressing customer needs effectively. 
3. Solutions like Rocketlane can help break down silos by centralizing customer information. With Rocketlane, teams can easily access and track outcomes, objectives, business goals, pain points, and desired gains throughout the customer journey, ensuring a cohesive and personalized experience.

3. Changes in communication cadence: The shift from sales to customer onboarding brings about a change in communication cadence. While sales teams are typically proactive and constantly available, onboarding involves a different dynamic. With the introduction of project plans and the involvement of various stakeholders, the communication approach naturally evolves. It's essential to recognize and adapt to this change, understanding that the high-touch approach of sales may not be sustainable throughout the entire customer lifecycle.

4. Buyer's remorse: Buyer's remorse is a common issue experienced by various stakeholders involved in the purchasing process.
5. The executive stakeholder, on the one hand, faces the pressure of justifying the investment amidst competing priorities and time constraints.  End users, who may not have had a direct role in budget allocation, still need to invest their time and effort into adopting the new solution. They need assurance that the promised benefits will indeed materialize and positively impact their workflow. 
6. Navigating these concerns requires addressing concerns and demonstrating tangible value not only to the budget holder but to all stakeholders involved.

5 steps to crafting an effective customer onboarding journey

Here’s what Aaron recommends as the five non-negotiable steps in designing an effective customer onboarding process: 

1. Understand the customer's needs: Dive deep into understanding the customer's unique requirements, including their value proposition, availability, and challenges. Recognize that everyone's life and work style fluctuate, and tailor the customer onboarding process accordingly.

2. Agree on a common definition of success: Success isn’t just about going live or completing the project. Collaborate with the customer to define success by outlining desired outcomes and experiences. Identify the pains to relieve or gains to achieve, and align on how to measure success based on their objectives and journey preferences.

3. Educate and motivate users: Provide comprehensive education and training to empower users to navigate the new solution effectively. Offer a range of educational resources, from in-product prompts to personalized training sessions, to ensure users are equipped – and motivated – to maximize the value of the product or service.

4. Manage change effectively: Proactively manage the transition period for customers, ensuring a seamless shift from pre-purchase to post-purchase stages. Implement strategies to ease the adjustment process and facilitate smooth integration into the new solution, ultimately accelerating time-to-value.

5. Regularly reinforce the value promise: Continuously reinforce the value proposition throughout the customer onboarding journey, highlighting the immediate benefits and progress made. Emphasize how the solution addresses their specific needs and contributes to their overarching goals, reaffirming their decision to invest in your product or service.

5 must-haves for successful customer onboarding 

1. Robust handoffs: It's more effective to think of the transition from sales to customer onboarding as a handshake rather than a handoff. From a customer's perspective, the ideal scenario involves close collaboration among sales, implementation, and customer success teams, starting from the initial contact and extending throughout the onboarding process.
2. It can be disheartening for customers when the salesperson seems to disappear after the deal is closed, leaving them to navigate implementation alone. To address this, it can be helpful for sales professionals to remain engaged or in touch during the customer onboarding phase. 

2. A well-understood and defined customer journey: Clarity on the onboarding process instills confidence and reduces uncertainty for the customer, setting the stage for a positive experience. Provide them with a well-defined and preferably visual customer onboarding journey, showcasing their progress and milestones. 

3. Relevant playbooks: Develop tailored playbooks that outline consistent onboarding procedures across different customer segments and product lines. These playbooks serve as guides for professional services and implementation teams, ensuring uniformity and efficiency in the customer onboarding process.

4. Metrics to track progress: Establish measurable metrics to gauge the effectiveness of the onboarding process and track the impact on customer success. Quantifiable data allows for informed decision-making and enables teams to demonstrate the value delivered to customers.
   
5. Transparent communication on progress and value: Keep customers informed about their onboarding progress and the value gained from the product or service at regular intervals. Regular communication of milestones, achievements, and outcomes fosters transparency and reinforces the customer's confidence in their investment.

5 revenue streams to explore with every customer 

1. Net new revenue: This occurs when a person or company purchases your product or service for the first time, progressing from the top of the funnel to the bottom. It's the most expensive in terms of revenue acquisition cost.

2. Renewal revenue: This is unlocked when the same customer buys again, possibly at a reduced rate if they require fewer resources in subsequent years. Renewals understandably have the lowest revenue acquisition cost.

3. Upsell expansion revenue: This occurs when the same customer purchases more of the same product or service. It's cost-effective because minimal training is required. Also, if rates are increased at renewal and the customer doesn't churn, it boosts revenue without significant additional effort.

4. Cross-sell revenue: Involves the same customer buying different products or services, which may require some training and professional services. It's typically moderately expensive due to the training and additional delivery elements.

5. Referral/advocacy revenue: This is the most desirable scenario where satisfied customers recommend your product or service to others. It is the least expensive method to generate a net new logo or business unit because you don't need to invest in demand generation and awareness efforts.

Impact of customer onboarding on the revenue streams 

1. Net new revenue: Customer onboarding has minimal impact here, as the focus is on promises made during the sales and marketing stages. However, for freemium models, a smooth customer onboarding process is crucial to prevent user churn.
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2. Renewal: Customer onboarding plays a huge role in renewal revenue. A well-executed onboarding process sets the stage for a positive customer experience, increasing the likelihood of renewals. It's the most efficient revenue to generate, and optimizing customer onboarding can significantly impact renewal rates.
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3. Upsell and cross-sell: Onboarding has a moderate impact on upsell revenue. Frictionless onboarding and excellent additional services are key to facilitating upselling. Similarly, for cross-selling, it’s a seamless onboarding process and excellent services that make cross-selling possible. 
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4. Advocate/referral revenue: Customer onboarding has some impact on advocate referral revenue because delivering defined, demonstrated value at the right time is crucial in turning customers into advocates who refer others to your business.