The saying “you never get a second chance to make a first impression” is especially true when you’re onboarding new customers.
“For every one-point increase in customer onboarding satisfaction on a 10- point Net Promoter Score (NPS) scale, there was a 3% increase in customer revenue.”
That translated to a significant boost in revenue. In the example given in the article, a company onboarding $500 million worth of new customers in a year that was able to increase its NPS onboarding satisfaction score from a five to six would likely gain an additional $15 million in revenue.
With such a compelling bottom line you would think companies would be all over the customer onboarding process. Yet in the same article, research commissioned by project management company Smartsheet, involving hundreds of large companies, stated most customer onboarding implementations ran over budget and “70% percent of companies reported that client onboardings are delivered late.” Which tends to indicate onboarding is an issue many are struggling to deliver on.
Why are customer onboarding issues so difficult to diagnose?
The McKinsey study highlighted customer onboarding as a great example of a ‘journey’ the customer takes involving multiple touchpoints across multiple parts of the company – with most companies focusing on executing individual touchpoints as opposed to the journey itself.
If we think about our own customer boarding experience at Arkturus, it involves sales, support, finance, IT, operations and – not the least – customer service. Failure can occur at any single point, or any combination of these touchpoints – or during the journey across any of the connection points in between.
Although your new customers don’t have a benchmark as to what kind of service they should get from you, they will come with expectations. It may be from being a customer with a competitor, or in today’s connected age, drawn from the experiences of others. Any flaw or crack during onboarding will cause them to re-calibrate downwards their impression of your brand, employees and product.
New customers rarely tell you what’s wrong
While your existing customers might reliably tell you where you’re failing – new customers typically won’t. In going through on-boarding they don’t have existing relationships to call upon – or the desire to ‘rock the boat’ so early in your relationship. They won’t complain, but it will start to put dents into the probability they will develop into a ‘loyal’ long-term customer.
You may think any early issues will be forgotten due to your good service later on – but history proves otherwise. The small flaws and cracks are magnified when any other misstep occurs, or the customer is courted by a competitor. It is incredibly annoying to think your customer churn canincrease due to seeds sewn so early on in your relationship.
So how can you fix a problem you don’t really know exists and can’t easily see where the issue could be?
Arkturus recently had the experience of assisting Mercury Energy, a leading New Zealand electricity generation and retailing company, with a positive review of its customer onboarding process. Not only did it successfully locate weak points in the process but identified solutions for process improvement.
As Senior Manager, Continuous Improvement, for Mercury, Jody Garrett, described it:
“Arkturus gave us clear visibility of our customer on-boarding process that showed us what was actually happening. Using Arkturus, we discovered bottlenecks and rework we didn’t even know existed. As a result, we’re onboarding over 10% faster than we were.”
While speed isn’t everything, being able to achieve that increase reflected a far greater number of happily onboarded customers in a shorter space of time – which, if McKinsey’s research is to be believed, will have a direct and positive, impact on revenue.
Digital twin of end-to-end customer onboarding
It was an interesting project as we were able to use our process mining tool to accurately create a digital twin of the end-to-end customer onboarding process. We then assisted the Mercury team in identifying areas where bottlenecks and reworks were occurring and used our process intelligence solution to identify and test best-practice options to resolve the issues.
It was a process that took days, as opposed to the months something like this would traditionally take. It resulted in Mercury being able to use Arkturus tools to create KPIs across its customer onboarding process to create an environment for continuous improvement for customer onboarding. While that is hardly new, the fact they could do it themselves without any coding is relatively revolutionary and reduced the overall budget – maximising returns from the exercise.
Mercury Energy case study
We look forward to updating the Mercury case study in a few years to see what further progress has been made based on the initial benchmarks. In the meantime, Mercury is now well placed to be able to identify issues in customer onboarding should they develop – using real-time, factually accurate, data.
This approach isn’t limited to retail customers; it can be used for any customer or client onboarding or employee onboarding when it comes to that. The concept and tools are the same. In fact, completing this project has encouraged us to take a close-up look at our customer onboarding process – hopefully, this blog will encourage you to do so as well.