The Customer Retention Guide: Great Onboarding is Your Best Relationship Tool

Breakups rarely happen overnight—they're often traced back to a shaky start.

Picture these scenarios.

Scenario 1

You're starting a new job today. You arrive to the office on time and no one is there to greet you. Somehow you enter the building to learn that your manager took the day off. No one knows who you are or why you are there. There was no organizational announcement about you ahead of time. You have no desk, no computer, no supplies, no meetings, and don't know whom to ask.

Does this send up any red flags? Is this the kind of organization you want to work for? And more importantly, how long before you start looking for another job?

Scenario 2

You are on a first date. Your companion is lovely and lively. They seem very much into you and ask you lots of questions. And I mean lots of questions.

1. How much money do you make?
2. What are your goals in the next 5 years?
3. How many children do you want?

By the end of the date, they are not reading the signs that you feel that this is more of an interview and less of a romantic connection and instead, ask for your hand in marriage and propose a quick elopement next weekend.

How quickly are you running for the hills and deleting their number?

Scenario 3

You get a LinkedIn request from someone you don't know. They seem to work in your industry, you have 10+ connections in common, and you are somewhat interested in what they have to say. You accept the request.

Next thing you know, you get 5 DMs in the next hour that critique your profile, offer you a $300 off an introductory course, and suggest that you need coaching.

At which point do you remove the connection?

In a nutshell, how you begin a relationships sets the path and the expectations between you (the brand) and the customer. You also set them on a trajectory of behaviour and how they think of you likely for the remainder of the relationship.

If you have a problem with customer retention, start with addressing your customer onboarding process, even though that may sound counterintuitive.

How Do You Know Your Onboarding Isn't Working?

Here are a few clues that you are not onboarding your customers well:

1. You have a lot of customers who only shop with you once and never again.
2. The time between first and second shop of your new customers is getting longer every year.
3. Your longest tenured customers are your best customers and the quality (i.e. spend and frequency) of new customers is deteriorating each year.
4. Your marketing communication unsubscribe rates are very high in the first weeks and months of a relationship with a new customer.
5. The correlation between customer tenure and customer attrition (including silent attrition) is a high negative number. This means that the customers leaving you are primarily newer customers.

Do you even measure these KPIs?

How to Fix Your Onboarding?

If you've established that your onboarding program needs some work and may be the cause of your attrition program, you may be wondering what to do next. How do you improve your onboarding process?

Onboarding cannot be a haphazard decision. It needs to be mapped out as a flow and you need to consider the following.

What do they need to know?

Education is an important component of an onboarding process. Let the new customer get to know you, in a logical order. Being unfamiliar with your store or your website may be intimidating. Your layout may be confusing. How is your search functionality?

This is also your chance to set expectations of how you fit into their life. Help them shop with you smarter, more successfully, and get their needs met whether it is style, the thrill of the hunt, or the value that they seek.

Perfect Timing and Quantity

In Scenario 2, your date came on too strong and in Scenario 3, you received too much information.

Testing is your best friend. Test the timing, the order, the length, the content, and the number of communications within your onboarding flow. You are trying to balance response rates (sales and conversions) with open and unsubscribe rates. Don't scare off new customers.

Be Realistic with Your Asks

Never ask someone to marry you on a first date. I did that once, and although that worked out for me, it eventually didn't last (and ended after 14 years). I still do not recommend it.

1. Don't ask for any information that you don't need and won't use right away. Typically, that would limit you to 1-2 questions maximum.
2. Gather the rest of the information about the customer gradually. Not everything needs to be a direct question. Your analytics team can derive a lot, fairly accurately. If you don't have an analytics team, give Radicle Loyalty a shout
3. Don't ask customers to spend too much right away, instead smaller asks over a longer period of time, but without a long commitment.

Think about dating. Would you buy concert tickets for a year from now with someone you started dating 2 weeks ago? Then, why should someone buy a 1-year subscription with you after the first purchase?

Welcome Offers

Welcome offers should set your customers up for success, while minimizing the risk of being taken advantage of.

Your welcome offer is not working well if it encourages customers to:

• Only shop once (who isn't tired of 10% or 15% off if you provide your email address) and
• Encourages fraud (i.e. customers can join multiple times with multiple email addresses and even set up bots to create those accounts)

This is a highly risky welcome offer!

A better offer drives incremental transactional and non-transactional behaviour over time, as the customer gets accustomed to their relationship with you.

While promotional mass and targeted offers typically drive customer response only for the duration of the promotion, I have run extremely successful onboarding offers that drive the kind of customer behaviour that persists for their entire tenure. That is to say, a good welcome offer sets the trajectory of the role you play in the life of your customer.

For instance, if you are a credit card company and your welcome offer encourages customers to make a small transaction every day for a week, the customers that successfully reach that goal are more likely to treat this card as their first card in wallet.

Personalize Responsive Journeys

This is just a fancy way of saying "don't send the same thing to every new customer".

Personalize the first email in the series with what you know about the customer.

If you have a small "ask" in the first email in your series, make sure the second email takes into consideration whether they have met the ask or even opened the email. The flow should be different for those who achieve what you have asked them to do vs. those that are less engaged.

Reach out to Lia Grimberg, CLMP?, MBA if you want to improve your onboarding program to fix your retention problem.

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