Why Is Client Onboarding So Important? (4 key reasons)

Have you just signed a big new client for your business?

Congrats! 😃 ‎ I'm sure there's a temptation to jump head-first into delivering an excellent service for them.

So is it worth spending the time and resources to formally onboard this client before you get started?

I'm here to tell you that the answer to that question is a resounding "YES!"

Here's why.

TL;DR

• Onboarding clients will make them more engaged, allow them to derive value from your business more quickly and reduce the cost to you of acquiring them.
• Good preboarding materials can shorten the sales cycle, and it's also cheaper and faster to sell to existing clients by educating them about new features than it is to acquire new ones.
• Onboarding elements like welcome screens and in-app videos are great for building a sense of connection with your clients, which, in turn, will make them less likely to want to churn.
• Happy clients who feel connected to your brand, understand how to use your product, and find your user flows intuitive are likely to refer their friends.
• You can use UserGuiding to bolster your onboarding by creating elements like hotspots and tooltips without needing to code.

1. Onboarding clients improves key business metrics

We'll begin our case for client onboarding with some stats.

You want to improve your core metrics, right? Here's how onboarding can help you do just that.

Onboarding boosts client engagement

Let's imagine two businesses: Company A and Company B. They're identical apart from their onboarding processes.

Company A rushes into working for new clients immediately upon signing them.

Before starting work, Company B

• spends time getting to know the client's needs better,
• customizes their service according to the client's specific JTBD, and
• ensures that the client understands their service and how it's valuable.

In which instance is the client going to be more engaged? Company B, of course!

No surprise then, that:

86% of customers are more likely to be loyal to a business if given access to onboarding content after making a purchase. (Wyzowl)

Research by Rosetta Consulting suggests that engaged customers are 90% more likely to purchase again, spend 60% more when they do, and are worth three times more per year.

  Source: Rosetta Consulting

Onboarding reduces Time To Value

You can think of Time to Value as the amount of time it takes before a new client experiences value from your product or service.

Naturally, businesses have an incentive to keep this time as low as possible.

Onboarding new clients is an excellent way to reduce Time to Value. To explain why, let's again use Companies A and B.

We've already established that Company A doesn't do any onboarding. So its customers are left to their own devices to figure out their product. Sometimes they figure it out and find value; sometimes they don't.

Company B uses a welcome screen to greet new clients and provide a customized experience:

  Personalized Onboarding Experience with UserGuiding

‎They then give the client an automated product tour that highlights the exact features that are most relevant to that client's segment:

To ensure that completing the product tour is intuitive, they include a checklist of the most important tasks the client needs to tick off in order to reach value:

  UserGuiding's Onboarding Checklist Sample

Finally, they offer a self-service, in-app help center so that the client can educate themselves if they run into any issues.

In which case is the new client going to get to value faster? Again, Company B is our winner here.

Onboarding reduces acquisition costs

Over my years in SaaS, I've seen numerous founders make the mistake of thinking that traditional inbound and outbound channels are the only way of acquiring business.

This is not the case.

Consider that it's both easier and much cheaper to sell to an existing client than it is to a new one.

Again, the data backs this up:

• The Customer Service Institute found that 65% of business comes from existing customers.
• A much-quoted stat in the onboarding space is that it's 5-25x cheaper to retain an existing customer than it is to acquire a new one.

Let's say that both Company A and Company B decide to release a new feature.

Company A promotes the benefits of the feature using traditional sales and marketing, and signs some clients who are interested in it.

Company B also does some traditional sales and marketing, but they spend more of their time creating tooltips that point the way to the new feature inside their app.

As a result, a proportion of Company B's customers choose to upgrade to a new plan that allows them to use the new feature.

Company B gets to benefit from tons of upsell revenue — without having to invest as much into sales and marketing.

2. Onboarding clients shortens the sales cycle

Ever heard of the term "preboarding?" 🤔 ‎

It's a way of referring to the onboarding that takes place before the customer signs up for an account.

Customer education begins well before the sale, with blog posts, social media content, podcasts, YouTube videos, webinars… the list goes on!

  We do this at UserGuiding as well!

‎The better your customers understand your value proposition, the smoother the sales cycle will be.

This is doubly true if your niche is technical, highly regulated, or difficult to understand.

In these cases, you have even more of an incentive to ensure your customer knows

• what value they're getting from you and
• exactly how that value exchange will work – well in advance of them becoming a customer.

Customers will even go as far as to research your onboarding period before making a buying decision.

63% of customers take your onboarding into account as a factor in choosing whether to work with you or not. (Wyzowl)

There's also evidence that onboarding speeds up the sales cycle for upsells to existing customers.

Users appreciate it when your app is intuitive and easy to use, as a result of all your automated customer education strategies. Modals and hotspots are especially useful in this regard.

  That helpful red dot is a hotspot!

76% of customers say that an easy-to-use website is the single most important factor when making a buying decision. (SMSCountry)

And the positive effect of onboarding on upselling extends even to deep-pocketed enterprise clients.

As many as 70% of decision-makers are willing to spend more than $50k through self-service channels — such as upgrading to a higher pricing tier, for example.

If you can use onboarding elements such as tooltips to persuade them that a particular feature is worth paying for, your business can get a slice of that financial pie. Nice!

3. Onboarding boosts retention by building connection with clients

Have you ever had the experience of connecting with someone from the first moment you met them? Chances are, that person listened well, was genuine, and used mirroring to build rapport with you.

In the business world, first impressions matter just as much as they do in the offline world. And, in case you hadn't guessed yet, it's your onboarding that creates that first impression!

Look how warmly habit tracking app Rabit greets new users with its welcome screen:

You can make your onboarding flow feel even more personal to the user by segmenting them.

Sleeping app Meditopia asks users directly what they're looking to gain from using their app:

This helps build a sense of trust. It's a bit like a dialog in which the person listening to you asks directly how they can support you.

You can build this trust further by adding a video element to your onboarding.

In the example below, Fiverr added a video about how to create a gig to their help center, because they reasoned that a video would be more relatable and easier to understand for their users than a wall of text:

And Fiverr's reasoning makes sense. Humans like to connect to other humans, so it feels nice when you can put a face to the brand you're working with and know there are real people on the other end.

But this isn't just about making your customers feel all warm and fuzzy. There are some real business benefits to having your customers feel connected to your brand.

A client that feels like you genuinely care about them and are invested in their success is less likely to churn from you.

Research by Invesp suggests that effective onboarding can improve retention by as much as 50%. That's a lot of extra dollars in your wallet, month after month.

4. Onboarding leads to more referrals

Let's return to the example of Company B and summarize what we've learned about them so far:

• We know that they use a welcome screen to greet new users and segment them
• They give new customers a product tour to ensure that they understand where to find the features that are most relevant for their use case
• They invest resources into ensuring that their customers understand how to use their product and why using it is valuable
• They use tooltips to highlight new features to their existing users, offering those users more value
• They provide a help center so that their users can answer most of their own questions without having to wait in line for a support agent

Putting all these things together, Company B's customers consistently get the feeling that the product they're using is intuitive and the business behind it genuinely cares about their needs.

As a result, their clients are less likely to churn. Not only that, but they even tell some of their friends about how amazing Company B's service is. This leads to referrals – creating even more revenue for the company.

And, in case you're still doubting whether onboarding new clients is worth it, let's look at the example of Company A one final time.

Company A does none of the things that Company B does. It just goes straight into offering its products and services.

Even if what it offers is valuable, I would argue that Company A's clients are never going to feel like it cares about them in the same way as Company B's clients do.

And, ultimately, it's that feeling that makes all the difference. It's human to want to work with brands who respect us, personalize the customer journey to our own needs, and give us what we crave.

If you're not onboarding your clients, you're missing out!

It's your choice what you want to do with your new client.

But consider that onboarding them will:

• Make them more engaged
• Take them more quickly to the point where they're getting value from you
• Make them more likely to spend money on your upsells, which is a faster path to revenue for you than acquiring new clients
• Build trust, connection and a genuine bond
• Discourage them from churning
• Give them compelling reasons to refer their friends to you

So is client onboarding important? Absolutely.

If you're looking for an affordable, intuitive tool to support your onboarding, we encourage you to give UserGuiding a try.

You can build modals, tooltips and some of the other elements we mentioned in this article — without having to mess around with code.

You can test it out for free, so you've got nothing to lose and everything to gain.

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