Our bi-monthly webinar in April was on the topic of onboarding. It’s one we should probably repeat at least twice a year because it’s SO important.

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Getting onboarding right for your customers is like getting the foundation of your new house right. It’s necessary for long-term satisfaction. In the case of our customers, a great onboarding experience accomplishes so many things:

1. Establishes trust in the “post-Sales” organization and processes
2. Improves the ease of transition to production
3. Lowers the cost of Customer Success and Support
4. Greatly increases the likelihood of long-term success (renewals and upsells)
   

The first 90 days are critical as the customer transitions from their Sales person (who they learned to trust) to the post-Sales organization. 

The onboarding process will vary wildly from company to company both in terms of time and complexity. Some companies can onboard customers in a matter of hours and for many others it takes weeks or months.

We discussed the pros and cons of have CSMs do onboarding vs having a separate onboarding team. Most B2B software companies end up with a separate team because the skills required to do onboarding are different from the typical skills of a CSM. While CSMs could often learn to do onboarding, the question is whether you want them to. It’s hard to do two different jobs and it’s also harder to manager people who are doing two different jobs. They will be torn by the simple question of what’s more important – Net Revenue Retention or Time-to-Value? It’s good to have one primary metric for each organization and that can only happen if there’s a separate onboarding team. The downside of having a separate team is that it requires one more handoff and doing handoffs well is critical. Rule-of-thumb – if your onboarding process takes fewer than two weeks, have your CSMs do it.

Another topic to consider is when onboarding begins. Yes, it’s obvious that it begins shortly after the sales is completed. But the best companies start laying the onboarding foundation before the sales contract is signed. Setting expectations is critical to long-term success. If your onboarding and Customer Success processes are truly world class, your Sales team will want to talk about them because they will be differentiators. In fact, if these are not part of the Sales pitch it’s an indicator that you are not doing them well enough or not explaining how great they are to the Sales team. Sales people always want to talk about things that help them sell.

When thinking about the onboarding of your product and your customers, be honest about how complex it is. What skills are really required to do it well? Does it require a trained Project Manager in addition to a Technical Architect? What expectations are you setting with customers? Should you ask customers to sign off on the project plan AND on the completion? On that last note, make sure YOU know what it means for the onboarding process to be complete so you can communicate it clearly to the customer. They will be reluctant to agree that it’s over if you don’t do this. They will get used to, and trust, their onboarding team and won’t want to go through another handoff. This is why sometimes the best solution is to actually have them sign-off when the project is complete.

“If you can’t measure it, you can’t improve it.” These are the words of Peter Drucker and they are just as true today as they were 50 years ago when he first said them. Your onboarding projects are no exception. You need to measure at least three elements of every project:

1. Timeliness – did you finish on the schedule you promised?
2. Quality – was it done well?
3. Time-to-value – a key milestone measuring how long it takes for the customer to start getting some meaningful value even before the project is completed.
   

At some point, a regression analysis of your onboarding results against your retention rate for each customer will be very meaningful. I guarantee you that you’ll find a correlation between the quality and timeliness of onboarding and your retention rates.

I would recommend that you create a bonus structure for your onboarding teams rewarding them for whatever measurements you decide on. I’ve found that the easiest way to assess the quality is through a survey of the customer. For the leader of your onboarding team, I would also incent them to continually reduce the time it takes to complete the average project. Every single day matters and this kind of relentless focus will force them to put pressure on both Product, to make it easier to install, integrate, and configure as well as on Sales, to be vigilant in setting expectations that can be met. If you don’t do the latter, the customer’s perception of the quality of each project will be reduced. And, in the end, the only thing that really matters is the customer’s perception.

Lastly, there is a maturation curve for onboarding just as there is for every other process in your company. If you are early stage (fewer than 50 customers) you’ll probably have one or two people doing everything post-Sales including onboarding and Customer Success. That’s fine. But as you grow, you will want to consider two important things:

1. A separate onboarding team – as discussed above
2. Charging for onboarding
   

Regarding charging for onboarding, you will need to do this at some point. The only alternative is to build it into the cost of your software. That’s typically not the right solution because it will make accounting more difficult (recurring vs non-recurring revenue) and you will likely have to price some onboarding projects differently based on complexity. You will find customers more willing to pay for onboarding than you think. They realize that the cost is driven by the number of hours required and that makes it more sellable and palatable. Because Professional Services (that’s what onboarding is) are non-recurring costs, the money often comes from a separate bucket which makes it easier to swallow. Ultimately, you will need to charge for onboarding to enable you to do it really well. If you don’t charge for it, the temptation will be to cut every possible corner to reduce costs and that won’t play out well. Charging for it allows you to at least break even on the cost of the people involved at which point you can grow the team without burning any cash.

The first 90 days are critical. Get it right and reap the benefits.

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Other resources:

Organizing for Customer Success - https://www.smartkarrot.com/resources/blog/customer-success-org-structure/

Who owns Renewals and Upsells - https://www.gainsight.com/blog/who-should-own-renewals-and-upsells-sales-or-customer-success/

THE book on Customer Success - https://www.amazon.com/Customer-Success-Innovative-Companies-Recurring/dp/1119167965/ref=sr_1_4?crid=3HLSTG89JB2TJ&keywords=customer+success+book&qid=1638822055&sprefix=customr+succ%2Caps%2C301&sr=8-4