So, you’ve got a customer. Congratulations! But what do you do next? You might have set up a system of automated welcome emails or a product tour and left the rest up to the customer. There’s a chance new users will abandon your product because they didn’t feel compelled to explore it. To avoid that, companies must focus on perfecting the customer onboarding process. **Customer onboarding is the process of welcoming new customers and helping them get acquainted with your business. It’s vital to customer retention because it helps your customer understand how they can best engage with your company.** In this guide article, we’ll discuss why customer onboarding is so important for [building customer loyalty](https://www.engagebay.com/blog/customer-management-strategies/), what components and steps make up customer onboarding, and who all should be involved in the process. We’ll also show you a couple of wonderful examples to make sure you get the idea of customer onboarding right. ## **What is Customer Onboarding?** Customer onboarding, or client onboarding, is the process of proactively guiding new customers through your product to get them started and stay engaged. It is a series of steps and resources that make it easy for customers to incorporate a new product into their routine. You want your customers to feel like your product is the solution to the problem they’re facing. It’s fair to assume that they became a paying customer because they saw value in your service, so you have to justify that purchase. You want your customers to be familiar with the product they’ve bought and understand how they can get the most out of it. **Since customer onboarding focuses on enhancing the customer experience and fostering relationships, it can be applied to any business model, including SaaS-based businesses.** The primary goal is to improve the [lifetime value](https://www.engagebay.com/blog/customer-lifecycle-management-clm/) of your product for the customer. Provide them with information and engagement that will help them derive success from their purchases. We’ll explore all that in detail in this blog. But before that, take a look at this video; it offers some insights and advice about the customer onboarding process. ## **Why Is Customer Onboarding Important?** The most important thing, for any business, is to convince their new users that their service or product is a valuable addition to a customer’s life. Once your customers realize that, the odds of them becoming lifelong users increase exponentially. The realization — when something clicks for the customer — is what we call the ‘Aha!’ moment. It’s what makes or breaks a product. You want your customers to reach that moment but that only happens by carefully guiding them through the onboarding process. **Successful customer onboarding familiarizes the customer with your brand. It also sets expectations for your potential relationship with your clients.** The customer onboarding experience has a direct impact on your churn rate. If done well, you can increase your customer retention rate and also the overall customer lifetime value. A study revealed that most companies lose up to 75% of their new users within the first week. Furthermore, up to [60% of your free trial prospects](https://blog.intercom.com/designing-first-run-experiences-to-delight-users/) never return to make a purchase. To help customers through that initial awkwardness of trying out a new product or service, it helps that you build a user onboarding process that is action-oriented and [customer-centric](https://www.engagebay.com/blog/customer-centric-model/). An action-oriented process ensures that your customers engage more deeply with the product. _EngageBay has a library of resources to help new users_ It’s also better to learn by doing, so they are more likely to see the value of the product if they become familiar with how to use it. Here are a few more benefits of maintaining a strategic customer onboarding process flow. ### **Make More Revenue** Acquiring a new customer can cost 5X more than retaining the existing ones. Besides, it takes double the effort to attract a new user than maintaining an old one. Properly onboarded customers are more likely to stay and continue doing business with you and sustain your revenue stream. ### **Reduce Customer Service Costs** Although the heart of customer onboarding is [customer service](https://www.engagebay.com/blog/customer-service-tools/), it goes beyond delighting your customers. A successful onboarding process will ensure that your customers have a seamless transition from knowing your product to using it. They are less likely to encounter issues in the early stage of adoption. ### **Minimize the Churn Rate** Let’s say your business’s average cost of contract sign is $5,000. If just one customer leaves, you lose that much in annual recurring revenue. But that’s not all. You also lose the opportunity to up-sell or [cross-sell to that customer](https://www.engagebay.com/blog/cross-sell/). Customers who go through a positive onboarding experience are more likely to stick around, becoming a valuable asset to your company. ### **Get Free Word of Mouth Branding** Word-of-mouth marketing can either make or break your business. It is about using [happy customers](https://www.engagebay.com/blog/excellent-customer-service-tips/) to promote your business. ## **How Do You Onboard a New Customer? 6 Best Practices to Follow** Here is a checklist of seven customer onboarding best practices to consider. ### **i. Know Your Customers** You should know your [buyer persona or customer profile](https://www.engagebay.com/blog/customer-profile/) in and out. This will give you a good understanding of your customer. ### **ii. Clarify Expectations** Your customer should know what to expect before they purchase your product. ### **iii. Show Them Value** While giving them a product demo, you must have already shared the value your product can offer. However, you need to again emphasize the value it will provide for their unique cases. ### **iv. Keep Communication Flowing** After you have familiarized them with your product, make sure you remain in touch with them. ### **v. Create Customer-Centric Goals** Every customer’s needs are unique. Allow them to define their success or goals, and help them create measurable milestones. ### **vi. Measure Your Success** The final step in customer onboarding best practices: measuring success. ## **Who Should Be Involved in the Onboarding Process?** The user onboarding process for SaaS-based businesses should be an organization-wide effort. It isn’t the responsibility of just one department or team. ### **Product Management and Development** ### **Customer Success** ### **Customer Support** ### **Technical Support** ## **7 Components of Effective Customer Onboarding** ### **1. Sign-up** The sign-up step is the initial contact that a customer has with your product. ### **2. Welcome Email** Your [welcome email](https://www.engagebay.com/blog/welcome-email/) is the first contact with the customer after they have signed up for your product or service. ### **3. Product Tutorial** Once they have signed up, you need to create a guided tutorial or [onboarding tour](https://flook.co/blog/posts/onboarding-tours) to take them through the setup process, step by step. ### **4. Documentation** Documentation is the resource section where customers can try to find solutions to common issues themselves. ### **5. Follow-Ups** Ongoing communication is critical to keeping [customer engagement](https://www.engagebay.com/blog/customer-engagement-strategies/) alive. ### **6. In-App Notifications** Notifications can play a crucial role in enhancing your customer’s overall onboarding experience. ### **7. Data Import** Many [marketing automation](https://www.engagebay.com/marketing/marketing-automation) tools need to integrate with other third-party applications to expand their functionalities. ## **3 of the Best Customer Onboarding Examples** ### **1. Evernote** ### **2. Headspace** ### **3. Grammarly** ## **Wrap Up** An exceptional customer onboarding process focuses on the customer. **Customer onboarding best practices are constantly evolving. It’s a strategy that needs to be adapted and optimized consistently.** **Here’s Lauraine M’s take on EngageBay:** Many small business owners use and love EngageBay to automate their business process — here are a couple of reviews from happy customers: