You've finally won the deal - a glorious conclusion of the involved sales process that could have taken weeks or months. Yet, it's only the beginning of earning the confidence and realizing the mutual benefits for both parties. During the client onboarding process, you lay the long-term foundation of trust and a positive relationship with your customer — a crucial factor in client retention.
Optimizing the client onboarding process is essential in a B2B software world where customer satisfaction is an ongoing process, with a 77% customer retention rate. Establishing and keeping track of the right onboarding metrics is critical to accomplish this. Unfortunately, analyzing and innovating your onboarding process without comprehensive data and insights is like navigating with no map.
The list of metrics below is easy to put in place and begin tracking ongoing. If you are not tracking them yet, add them to your New Year's list of resolutions. Now is a great time to start!
Direct Onboarding Metrics
1. Deal Close-to-Onboarding Start Timespan - Backlog
A backlog is the total number of days from a customer signing up for your services until they begin the onboarding. Management should always be aware of this metric, as an overly lengthy backlog can lead to decreased user satisfaction and higher attrition rates.
There could be many reasons impacting the backlog, including high performing sales team, which is a good problem to have but nevertheless, a problem that has to be dealt with; a suboptimal or reduced onboarding resource capacity possibly driven by increased sales, scope creep of the existing onboarding projects, poor customer targeting, or other issues.
In any case, it's essential to identify and address the cause to ensure that clients are onboarded quickly and efficiently.
It’s also important to keep an eye on the next metric in conjunction with the backlog. It’s possible to assign an onboarding rep to start working with the client as soon as the deal is signed, making the backlog issue “go away.” Still, if the onboarding rep is overwhelmed with the number of concurrent implementations, this will impact the completion timeline.
The backlog can be found using the following formula:
Backlog of a Single Customer = Date of the start of onboarding project - date of the close of the contract.
You can get fancy and track only business days, discounting holidays, staff days off, and weekends, but this metric should give you a pretty good idea of where you are.
Track each of these for every customer and maintain a log of the average number of days it takes to start customer onboarding from the signature date. If that number starts to grow or you notice that you are losing customers because the wait is too long, it’s time to do something about it!
2. Average Onboarding Project Timespan
The implementation time span is the total time it takes for a customer to be set up and start using your product or service. Generally, this process includes onboarding, training, data integration, configuration, and other related activities.
This metric provides critical insights into the cost, level of effort, and time investment for your onboarding team to get customers to get up and running with your offering. Establishing and tracking this baseline metric will allow for determining if any given onboarding project is taking too long. That could reflect an onboarding rep’s limited capacity or performance, unexpected deal scope, poor client cooperation, or other issues.
A more granular review of this metric will help in the market sector and client profiling, staff training, and capacity management, among other things. It would be helpful to keep track of the reps working on it and the industry and size of the client for better accuracy.
The onboarding Timespan can be found using the following formula:
Onboarding Timespan = Date of the completion of onboarding project - date of the start of onboarding project.
As with the backlog, capture this data point and incorporate it into the overall average calculation of the onboarding timespan and get as granular and detailed as you can. But you got to start somewhere :)
3. Onboarding Completion Percentage
This metric represents the percentage of onboarding completed from start to finish. It's important to know where your process fits in terms of completion rate as it helps create a benchmark you can use to measure progress further down the line.
When identifying a red flag in your onboarding completion metrics, you'll want to dive into where in the process customers are dropping off and why.
The onboarding Completion Percentage can be found using the following formula:
Onboarding Project Completion Percentage = (# of customers who completed the onboarding / # of customers who closed the deal) * 100
4. The Cost of Onboarding
One of the most difficult metrics to measure is the cost of onboarding - and for a good reason. Managing the costs of the onboarding process requires diligent tracking and analysis. Unfortunately, it’s not easy to do this without the tools to help assess and track the cost of onboarding accurately and, on a granular level, to take actionable steps to improve it.
Businesses endure many hidden costs when onboarding new customers, including labor, training, and administrative fees that are typically not accounted for. Knowing the cost of onboarding is crucial to understanding whether or not the process is successful and profitable for your business.
Start with the basic calculation of the compensation of onboarding staff against the number of onboarding projects completed and continue to refine it. Customer onboarding automation tools are a game-changer in making this elusive metric readily accessible.
5. Onboarding Staff Satisfaction
It's not enough to monitor the quantitative metrics of customer onboarding — the qualitative aspect is just as important.
Onboarding is tough. It can be stressful to juggle multiple clients at a time, ensuring each customer is onboarded properly and deadlines are met. It's essential to measure the satisfaction level of your onboarding staff to ensure they're equipped with the tools and resources they need to perform at an optimal level.
Low staff morale could ultimately reflect on customer retention and loyalty. Survey your onboarding team regularly to understand their current level of satisfaction and address any issues that arise proactively.
6. Number of Projects Per Customer Onboarding Representative
This is a valuable metric to help keep track of your onboarding team’s capacity. The number can range, reflecting the project's complexity and staff capacity. It offers valuable insight into implementation efficiency and scalability. It can provide guidance into the onboarding team morale as well as client satisfaction.
This metric can also be used for staff recognition, forecasting, and planning.
As with other metrics, there are many ways to skin this (virtual :) cat. The stage and scope of the onboarding project, client size, and industry can play a role, as can the onboarding representative's skillset, experience, and availability.
7. Client Retention
Client retention is the most evident - and the onboarding experience is a significant factor related to retention and revenue recognition.
Research has found that customers who perceived a company's customer onboarding positively had between 12% and 21% more willingness to pay than the median. And those on the negative side had between a 3% to 9% drop in the willingness to pay. Also, those with positive perceptions “have much less drop-off (about 1.6%) in the first 21 days of being customers.”
Client retention is the ultimate measurement of success for any business and onboarding process. To identify client retention, analyze which clients have returned and which have churned or canceled their service. This overarching piece of data will make it easier to determine the success of your onboarding process.
Since 78% of customers give up on a transaction because of a negative customer experience, it's essential to understand the customer's journey from the start of the relationship.
Client retention can be found using the following formula:
Client Retention Percentage = (# of customers who renew the subscription at the end of the period / # of customers with an active subscription at the start of the period) * 100
Some providers discount the “non-starters” or customers who never completed onboarding in the overall retention calculation. However, it’s critical not to overlook this important data point that could reflect the future success or failure of the new relationship.
It’s best to capture this data at multiple points, from the beginning of the relationship, through the completion of onboarding, during the transition to client success, and beyond.
8. Client Satisfaction
At the end of the day, this is one of the most critical metrics. Client onboarding aims to ensure a smooth transition from the moment they sign up for your solution. Client satisfaction can be measured through surveys, customer feedback, interviews, and more.
Whether you use specialized onboarding software or not, it's vital to make an effort to establish the baselines and monitor progress. By doing so, you'll better understand how successful your customer onboarding process is and what can be improved upon moving forward.
At Setuply, we offer the right tools to implement a seamless onboarding experience for your new customers. Our specialized software and analytics can help solution providers to assess their onboarding program and make necessary changes for improvement. With Setuply, you can monitor your clients' onboarding progress in real-time and measure the success of their transition from signup to use.
Ready to take control of your onboarding process, deliver incredible user experiences, increase team and customer satisfaction, and ultimately become more profitable? Get started with a free consultation today.