Growth teams manage reducing churn and improving retention. To solve this, they may allocate budget on win-back campaigns or promotions with the hope of luring customers back. These campaigns often yield low engagement and conversion rates because the customer experience leading up to churn is more lasting than a price discount, especially after a poor product or service experience. Price discounts may also lead to destructive behavior where the customer cancels a subscription or service just because they know they can come back at a lower price.
Perhaps a less commonly held viewpoint is that it costs less to keep an existing customer, so if organizations invested more time developing the right customer experience, they could prevent churn and save a lot of time and money in the process:
- Acquiring a new customer can cost five times more than retaining an existing customer.
- Increasing customer retention by 5% can increase profits from 25-95%.
A well-designed onboarding strategy can help keep existing customers because it will engage them at the right time and convey the most relevant value propositions. Even if the overall product experience is less than ideal, it can present nuggets and features useful to those particular users and keep them engaged longer.
You may be wondering what onboarding entails. Onboarding is the ongoing process by which you introduce new users to your product or service and connect them with the right features at the right time. The process typically starts with a welcome screen, product tour, or interactive guide coupled with a welcome email or push notification sent when a user signs up. The purpose of these initial tours is to provide users with a clear understanding of your product and service to consistently measure success by evaluating the resulting feature adoption and active use. The onboarding process then continues with a series of touchpoints and communications whose primary objective is education, with the notion that if a user understands how to use a product or feature, they will engage with it more often and improve retention. However, in the case of free vs. premium subscriptions, there is a need to welcome and onboard users in the free state. The primary objective is product education that leads to conversion to the paid service.
As monthly subscriptions drive recurring revenue, the first 30 days of onboarding are the most critical in keeping a customer beyond their first month. The first seven days are the most critical in defining a user’s relationship with your service (whether it be an occasional check-in or daily ritual)? Research shows that customers with a positive perception of their onboarding experience are far less likely to churn within the first 21 days of using a new product.
That said, it takes quite a bit of time and investment to develop an effective onboarding strategy. It often requires a lot of research and optimization to deliver positive results. That’s where a tool like Gainsight PX can help minimize your time to market and costs because it provides turnkey solutions that allow you to personalize and automate the onboarding process in several ways, including:
- User engagement capabilities enable you to quickly build beautiful, intuitive in-app guides, alerts, dialogues, resource centers, bots, and more.
- Powerful Product Analytics allow you to fully personalize the onboarding experience based on account and user-level attributes. This will enable you to target the right user segments and feature flows. (For example, you can identify and segment out users who aren’t fully utilizing a core feature and target them with personalized tips and guides. You could also trigger email outreach check-ins to users who haven’t been in your application within a specific period.)
- Sophisticated usage and time-based throttling allow you to limit the total number of engagements a given user sees, reducing the likeliness of them feeling obtrusive.
- Reporting tools that allow you to track the success of your onboarding efforts, as shown below.
You can try to create your own onboarding experience the old fashioned way and test your way into the best approach. The better alternative to save time and money is to leverage automation and analytics from Gainsight to minimize costs and shorten time to value for each customer. In the long run, a good onboarding strategy will remind users of the value they are getting from your product over time, remind them when to return to the product, and minimize product churn. Get a personalized demo of Gainsight PX to see how fast and easy we can help your product metrics.
