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Home   >Collaboration 101

What is Customer Onboarding?

February 21, 2024

What is Customer Onboarding?
Customer onboarding is an external collaboration to enable customer success. It has two parts: the customer-facing activities, which are focused on enabling customers to use your product or service successfully. And internal-facing activities, which are focused on configuring your internal systems and processes to service and support the customer.

Customers are among the most important external stakeholders for any organization—they pay the bills!  

Onboarding is one of the first business-critical collaborations you’ll have with your customers.  The goal is to enable your customers’ success. You want them to get value from your product or service right away. Early success builds trust between you and your customers and encourages them to continue to use your product.

It’s an epic handshake with two key parts: 

Customer onboarding is an epic handshake with both customer-facing and internal-facing activities

  • Customer-Facing Activities: Enabling customers to use your product or service successfully. 
  • Internal-Facing Activities: Collecting information to configure internal systems so the organization can service and support the customer. 

Why is Customer Onboarding important? 

Customer onboarding is important because it not only represents the beginning of the customer's journey with your product or service but also significantly influences their long-term relationship with your company. A well-executed onboarding process accomplishes the following:

  • Sets the Tone: It's often the first detailed interaction customers have post-purchase, setting expectations for the level of support and engagement they can anticipate. A poor customer onboarding experience can lead to customer regret, dissatisfaction, and churn.  
  • Drives Success and Satisfaction: By effectively educating customers and providing the necessary tools, onboarding ensures customers start on the right foot, enhancing their likelihood of achieving success with your offering.
  • Encourages Adoption and Engagement: A seamless onboarding experience motivates customers to fully explore and utilize your product, leading to higher engagement and the discovery of additional value.
  • Fosters Trust and Loyalty: Demonstrating commitment to customer success from the outset builds trust and increases the likelihood of customers committing long-term. 
  • Enhances Operational Efficiency: Integrating customers smoothly into your systems not only elevates their experience but also streamlines your internal processes, reducing overhead and improving outcomes such as receivable times.

In essence, effective customer onboarding is a critical investment in customer satisfaction and operational excellence, laying the groundwork for a fruitful, ongoing partnership.

Customer-Facing Activities: The Part of Everyone Thinks About

Most organizations focus all their energies on the customer-facing, or customer enablement, part of the onboarding process. Customer enablement is critical, and your approach should be configured to fit your product or service and target audience.  Depending on the sophistication of your offer, there are two main approaches:

  • High-touch: This involves personalized interactions with customer support teams, like one-on-one training or live chat support. 
  • Low-touch: This relies on self-service resources like tutorials, email guides, and webinars.

The best approach for your product or service may combine both high-touch and low-touch elements to create a seamless and engaging onboarding experience for your customers.  

But as we said above, customer onboarding is a two-part process.  Equal attention to internal-facing activities is required to complete the epic handshake. 

Internal-Facing Activities: An Essential (but often neglected) Part of Every Onboarding Process 

Securely collect business-criticial documents and files from your customers during onboarding

Organizations frequently prioritize customer onboarding efforts on product enablement and adoption, while internal-facing activities such as billing, provisioning, licensing, and legal often receive insufficient attention. The underlying thought is often, “Customers didn't choose us for our billing efficiency, they bought our product to solve a problem!”

Yet, it's essential to understand that negative experiences with your internal-facing processes can cause significant customer dissatisfaction. Customers perceive your company as a single entity and do not distinguish between your product teams and administrative departments. In fact, some customers might judge failures in internal-facing activities more harshly, reminiscent of the “Van Halen Brown M&M” test. 

This test refers to a clause in Van Halen's 1980s concert contracts demanding that bowls of an american chocolate candy, M&M's, exclude all brown candies. David Lee Roth explained that this seemingly whimsical request was actually a critical safety measure:

"If I came backstage, having been one of the architects of this lighting and staging design, and I saw brown M&Ms on the catering table, then I guarantee the promoter had not read the contract rider, and we would have to do a serious line check" 
- David Lee Roth

The Brown M&M test wasn't about the candy but ensuring concert promoters meticulously followed the technical and safety specifications. Van Halen's elaborate and potentially hazardous shows required strict adherence to their requirements. Discovering brown M&M's signaled that promoters might have neglected other, more vital parts of the rider, compromising safety.

When customers encounter issues with your internal-facing activities during customer onboarding, it’s akin to failing the Van Halen Brown M&M Test. It raises similar doubts about the company's attention to detail and overall reliability. If an organization falls short on the "small things" like accounting, legal, or service, it begs the question: What else is being neglected?

Poor onboarding experiences are akin to failing The Van Halen Brown M&M Test

What Kind of Data and Documents are Typically Collected?

Attention to detail in those internal-facing activities can reveal much about a company's operational integrity. While every organization is different, there are common documents and information that needs to be collected from customers to set them up properly in your internal applications. This ensures that administrative interactions run smoothly for both you and your customer going forward, eliminating the potential for frustration.

To support a collaborative and ongoing relationship with your customers and clients, consider conducting onboarding in an external collaboration platform which will allow you to collect documents, gather feedback, and customize the process to meet the needs of your business and your customers. 

Content collected in those internal-facing activities include: 

  1. Customer Contact Information: Names, roles, and contact details of key personnel involved in using or managing the product or service.
  2. Compliance Documentation: Any necessary documents to ensure compliance with industry standards or regulations relevant to the customer's business.
  3. Contracts and Agreements: Signed service agreements, NDAs, and any other legal documents governing the relationship between the customer and the company.
  4. Payment and Billing Information: Details required for invoicing, payment processing, and financial record-keeping.
  5. Support and Service Level Agreements (SLAs): Documents outlining the scope of support, service expectations, and any specific SLAs agreed upon.
  6. Security and Data Protection Forms: Documentation related to data protection policies, security requirements, and any customer-specific security protocols.

This comprehensive approach not only ensures operational readiness but also demonstrates a commitment to detail that can make or break customer confidence in your organization.  Moreover, let’s not forget excellence here can also reduce your overall administrative costs. 

Final Thoughts

Customer onboarding is not simply about introducing new users to your product or service; it's about laying the foundation for enduring, mutually beneficial relationships. A well-crafted onboarding experience, ensuring that both internal-facing and customer-facing activities are executed with precision and care, fosters trust and boosts adoption and engagement.


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