Why's Customer Onboarding Important in 2023?

Onboarding is a critical part of the customer journey. Some of the best customer relationships spring from the best customer onboarding experiences. The onboarding process is your business’s chance to make a good first impression on a new customer and convince the customer that they made the right choice by choosing your product or service. It’s also the very first step in the process of educating your customers and ensuring they are able to use the products or services they paid for successfully.

So, why is customer onboarding important? There are almost more reasons to invest in a better onboarding strategy than we could list here. However, we’ve picked out five of the most impactful reasons why customer onboarding is important, which we’ll describe in detail.

Businesses can use tools like a learning management system (LMS) to enable more effective customer onboarding strategies. Switching to digital onboarding of customers instead of traditional onboarding can be a great way to improve the customer experience and make the onboarding process more efficient.

What's Customer Onboarding?

To begin with, what is customer onboarding? There are multiple ways to describe customer onboarding for different purposes, but there is really only one customer onboarding meaning. Customer onboarding is the learning process at the beginning of the customer onboarding process during which the customer becomes familiar with how to use your products or services. It’s important to streamline this process and make it as easy as possible for customers to reach your product’s value.

Different businesses define the beginning and end points of the customer onboarding process differently, but many businesses consider the onboarding phase of the customer journey to last from the moment the customer signs up until the moment the customer achieves their first win with the product or service. Customer onboarding examples can be found throughout nearly every industry.

5 Reasons Why Customer Onboarding is Important

Your customer onboarding strategy significantly influences the quality of your customer relationships and your customers’ odds of success. It’s important to follow customer onboarding best practices to ensure your onboarding strategy is helping and not hurting in the long run. An ineffective onboarding strategy can sour customer relationships right off the bat when customers struggle to get the value they were promised. An effective onboarding strategy can lead to successful, loyal customers and all-around positive customer relationships. Here are a few specific outcomes that your business can achieve by prioritizing a better customer onboarding strategy:

1. Decrease Time to Value (TTV)

One of the first major benefits of an effective customer onboarding process is that it can significantly reduce time to value for your customers. Time to value is a metric that measures the amount of time it takes for customers to experience and recognize the value of your product or service firsthand for the very first time. Reducing time to value is one of the most important purposes of your onboarding process. 

Proving the value of your product or service to your customers as early as possible is vital to the success of the customer relationship. Customers are likely at their most motivated and engage during the period of time immediately after making their purchase, so it’s important to capitalize on this momentum by giving them everything they need to reach the desired outcome quickly.

2. Increase Product Adoption

Another reason customer onboarding is so important is that it drives product adoption. Your business’s onboarding process is your customers’ first chance to experience success with the product or service firsthand. If their first experience does not deliver the value they expected or is plagued with issues, they will be much less likely to use the product or service again. 

Customers don’t want to keep coming back to use products or services that aren’t showing them value, and they certainly don’t want to keep paying for them. When your onboarding process effectively guides new users directly to their first win with the product or service, it greatly improves customers’ chances of continuing to use the product or service. 

3. Builds Trust & Relationships

A superb onboarding experience also helps build trust between customers and your business and contributes to long-term customer loyalty. The customer onboarding process sets the tone for the whole customer relationship, so it’s important to show customers up front that they can trust your business to deliver the value it promises. Once you build that trust, customers are usually much more likely to continue spending money with your business.

Developing trust and customer loyalty has additional benefits aside from retaining your current customers. Prioritizing strong customer relationships also helps create brand champions and drive advocacy. Customers who enjoy exemplary relationships with your brand may tell others about their positive experiences and contribute to further growth. Customers who have poor relationships are also likely to share their experiences with others, which makes it doubly important to focus on building good relationships with customers via excellent onboarding.

4. Improves Satisfaction

Improving your organization’s onboarding process can also result in higher customer satisfaction. If your customers don’t have the basic skills and knowledge they need to use your products successfully, it’s unlikely they’ll be satisfied with the outcomes they reach. Or, if they are able to reach their desired outcome with the product, it’s likely they were only able to get that far with a great deal of effort and frustration. Without an effective onboarding phase to guide them through the learning process, customers will almost certainly struggle to recognize your product’s value.

A successful onboarding experience is one that makes it extremely simple for the customer to start using the product to its full effect. A streamlined onboarding process can greatly reduce customers’ frustration throughout the earliest days of their relationship with your business and ensure the relationship develops in a positive direction. Better customer onboarding can create more satisfied customers throughout the entire customer journey because they’ll have had a stronger foundation to begin with.

5. Leads to Better Retention

The quality of your customer onboarding strategy also contributes heavily to customer retention for many of the same reasons we’ve outlined above. When customers are being onboarded effectively, they have everything they need to get started using your products successfully right away. This means there is little chance for customers to feel frustrated by a slow learning process, or worse, disappointed in a product that isn’t delivering their desired outcomes. Positive onboarding experiences can often lead to longer customer retention because customers are getting what they wanted from the transaction and have little reason to leave.

For SaaS companies, it’s especially important to maintain a highly effective onboarding process. SaaS products are often complex enough already, and an inefficient onboarding process can easily sour an otherwise promising customer relationship. SaaS companies should make it a high priority to provide customers with the best onboarding experience possible. 

Customer Onboarding Software You Should Try in 2023

Customer onboarding is often considered to be one of the most critical points in the customer journey. Onboarding is extremely important for many reasons. One of the best ways to sum up the importance of onboarding is to look at it in terms of customer success. 

The goal of an effective onboarding process is to give customers everything they need to reach successful outcomes with your products or services as quickly as possible. Therefore, onboarding contributes in many ways to the health of your business’s customer relationships and customer satisfaction as a whole at your organization. The customer onboarding process is especially important for B2B SaaS organizations.

These are some specific examples of the reasons customer onboarding is important:

• It reduces time to value for your customers, which means they get to enjoy the full benefit of your product or service earlier in the customer journey.

• It improves product adoption, which makes it easier for customers to succeed with new products and features and more likely to use them.

• It builds trust between your business and your customers, which is essentially for creating brand advocates.

• It drives customer satisfaction all throughout the whole customer journey by starting it out on the right foot.

• It increases customer retention, which is one of the best ways to help your bottom line and an especially critical consideration for SaaS companies. 

But what can you do to actually improve your customer onboarding strategy? One of the best steps you can take is to adopt better tools for customer onboarding, like a customer onboarding platform. There are several types of software that you could potentially use to help drive onboarding success. Some tools are specifically designed for building onboarding programs. Another versatile type of software that’s perfect for customer onboarding is a learning management system (LMS).

Northpass is a flexible LMS that you can use to streamline your customer onboarding program with features like customizable learning paths, mobile optimization, and engagement analytics. Using automation and other technology features is one of the best ways for customer success managers to give their customer onboarding programs a boost. Scaling an onboarding program also becomes much more achievable when you use customer onboarding software instead of trying to manage every customer’s onboarding journey manually.