Years ago, when I studied statistics at school, I remember hearing of a real world example of using stats to predict the lifetime of a light-bulb. Like a lot of manufactured goods, it’s a reverse bell-curve – with the bulb either burning out immediately due to a fault or lasting a really long time until it’s all used up. (Warranties are actually based on this type of thing – running out just before the reverse bell curve goes up again! Ughh!)
I would expect that for most subscription type services there can be a similar curve. With a blip of churn occurring early. Then customers that stay a subscription cycle or two will end up staying for some time. This is real churn, or at least the churn that is most worrisome, because it is often customers that leave before you recover the cost of acquiring them in the first place.
What about these early fails. How do you prevent them?
Sometimes it is buyer’s remorse. People respond to the acquisition tactics, and then after an initial cooling off period realize they don’t’ need what you are offering.
Sometimes it’s just that the company providing the service hasn’t really helped the subscriber realize the value the system holds for them. That’s the whole purpose of setting up an onboarding process, to help the customer get on board and start seeing value immediately. Showing them a few early quick wins and guiding them towards full adoption.
As an example, I will share my experience with setting up an online store on an eCommerce platform. The service take a % cut of the sales, so in truth they have a real vested interest beyond the monthly subscription to see that the customer is successful. The more successful the customer, the more money they make!
As part of the onboarding, the eCommerce platform provides a promotion for Google Adwords and Facebook Ads. They also provide an education site with a lot of content in terms of blogs and forums, but it’s something you really have to hunt around. As well, they facilitate a network of associate consultants available at a fee.
Using the Google Adwords credit, meant setting up an account with Google. Google Adwords provides an “Ask the Expert service”. When you start creating and running ads, you can call in, someone looks at your campaigns, usually makes a recommendation on something you can tweak to try to improve your campaign or help with your goals. You then make the change and test the impact. Though it’s only really one change per call – you can call back repeatedly. It’s an interactive way to learn about different features in Google Adwords relevant to you and to refine your campaigns.
So, who does the better job of onboarding?
Not taking the time to figure out how to best onboard your customers will just foster more churn. As mentioned above, it also has a direct negative cost impact on your CAC/CLV ratio (Cost of Customer Acquistion / Customer Lifetime Value). As well, quick churn often means you can’t collect real feedback as to why people leave your service. People tend to only give real feedback when they have invested some time and energy in the service, and have found out why they really don’t want it.
I believe that you need to develop distinct onboarding tactics for each segment of you market. This onboarding exercise needs to have input and participation from all parts of the company – sales & marketing, product and service teams.
It doesn’t necessarily mean providing them a real live person that provides advice – like Google. If it’s built into the product and part of the overall customer engagement then successful onboarding will just happen.
Here are some examples of how these teams can participate and inform the customer onboarding process.
Part of signing up an account should involve a handover of customer information to the teams that will support the customer – even if that signing up is self-service. It is at the point of signing up that you can collect good information about the customers and their goals for using the service. The point of onboarding should be to help them see that they will achieve those goals.
Marketing teams need to clearly identify the onboarding needs of a segment or cohort of customers. This should be part of the ongoing persona that is built up for this customer. It might mean that you have different onboarding tactics for different tiers of users. They also should develop distinct communications for this period, and decide on distribution methods. For example, you may have a new user mailing list segment that receives different articles tailored for new users.
Sales or Marketing teams should share information about the customer they learned in the acquisition journey. It needs to make its way into a shared customer profile, not lost in separate systems. For example, a customer coming to the service from another user referral or a lead generated at an industry conference may need less hand holding then someone who has come to the system cold.
Product teams can build in ways to make setup and using the system easier for a new user, in terms of hints or wizards. Almost a given these days, product development should include UX and CX design considerations. (User experience / Customer experience). We all hated that MS Office little paper-clip, but it is still an interesting example of just-in-time help that could be turned off once you became a more experienced user!
And of course – what is usually offered at a minimum by those who do consider onboarding – some element of service or support team interaction. Either by calling or making a chat interface available. Depending on the price of the service (or the opportunity for Lifetime Value), service teams can also take some pro-active steps; reaching out to new users with recommendations and information on how best to use the system. As front line observers of the problems new users have, they can be well positioned to develop some best practices based on issues existing users faced
There are many creative and innovate ways to help a customer come on board. In truth, it should be considered part of the cost of customer acquisition and budgeted for accordingly. Having all parts of the organization focused on making sure customers see and realize value from the onset, goes a long way to keeping them onboard for a long productive lifetime.