5 ways churn is killing your company—and how good onboarding can fix it
You don’t have to accept these effects as inevitable. In fact, you shouldn’t. Onboarding has the power to transform the customer experience and stop the ripple effects of churn.
Here are five major ways churn is impacting your customers, your company, and your profits—and how you can use onboarding to turn the tide.
1) You’re wasting money in every department
Flashy, attractive marketing and slick sales decks can make SaaS products seem like magical solutions to complex business problems. But once customers sign on and try to implement the processes that sounded so easy, they quickly discover that the reality doesn’t match the promise.
When they give up and cancel, you lose:
The money you spent on customer acquisition Profits from subscriptions and potential upgrades The time, effort, and budget invested in (failed) customer success
What’s the fix? Support from a good onboarding process. Skipping this step might seem easier because of the financial and resource costs involved, but putting resources into onboarding is the only way to give your customers the best chance of success.
It starts with adjusting marketing and sales messages so that customers know exactly what they’ll get when they sign up for your product. Then the CS team can focus on making customers successful instead of resetting expectations. Small adjustments in these early onboarding steps can make a big difference in your churn rate.
2) Your company is getting a bad reputation
Customers who churn aren’t likely to sing the praises of your product. But they will complain about it—to their friends, co-workers, and industry colleagues. They’ll complain about it in reviews and on social media. When others are looking for a tool to solve the problem you aim to solve, churned customers will cite your product’s shortcomings and recommend your competitors as an alternative.
All this complaining gives your company a reputation of being hard to work with, which doesn’t bode well for future sales. Failing to focus on the customer experience means losing out on revenue from referrals and networking opportunities. Since the internet gives customer complaints serious staying power, these losses can become significant over time.
What’s the fix? A cross-departmental focus on customer success. When everyone agrees to be honest and transparent about what your tool does and doesn’t do, customers are more comfortable giving feedback. This creates an environment where onboarding becomes a mutual learning process that sets customers up for growth and gives you opportunities to improve your product and processes.
Taking this approach doesn’t just onboard users; it creates fans. Even customers who cancel because your product isn’t the right fit will remember the effort you put into helping them—and they’ll be more likely to send referrals your way.
3) Internal conflict is erupting
Resentment can build when the CS team sees churn they can’t explain. A lack of communication between departments leads to teams blaming each other instead of working together to solve the problem. As internal friction grows, the customer experience suffers.
What’s the fix? Fill in the gaps. Departments need to sit together and discuss customer feedback to learn where the customer experience is falling short. What are your customers’ biggest problems? What questions aren’t being answered? Start addressing these issues early in the onboarding process to build trust and create a foundational relationship with customers. Fixing these problems makes everyone’s job easier, and teams will feel reenergized instead of resentful as they see more customers onboarding, succeeding, and growing.
4) The CS team is wasting a lot of time (and you’re losing money)
There’s no better way to demoralize a CS team than to hand them a bunch of “customers” who wind up churning. A customer who churns is a customer who never has a chance to succeed and grow with you. When they leave, CS representatives watch all of the work they did with that customer go out the door, too.
Churned customers also take with them all the potential profit you would have gained from their purchase of upgrades, extra seats, or new features. They lose out on the benefits your product could provide, and you lose out on the opportunity to increase your ACV.
This often results from onboarding that’s slow, confusing, or missing important steps. Customers drop off in the middle of the process, forget why they signed up for your product in the first place—and declare you the first to go the next time they evaluate expenses.
What’s the fix? Provide moments of value realization throughout the onboarding process. Your customers should be able to progress through a series of logical steps that build momentum and encourage them to continue. Every little win is an opportunity to demonstrate the value of your product and stay top of mind. Design your onboarding process to create every possible opportunity for customers to grow and for your product to become an integral part of their processes. When they grow, you grow—and your CS team feels like their jobs are worth doing.
5) You’re losing out on growing customer LTV
Customer touchpoints are anchors, and customers will remember the most recent touchpoint the next time they interact with you. Negative associations create hesitation, and hesitation can quickly transition to churn.
This can have a significant impact on your bottom line. Every moment is a potential moment for customers to add more features or upgrade: there’s a very real potential to grow LTV every year. But growth will never happen if your customers’ experience at one or more touchpoints leaves them feeling confused, frustrated, or disappointed.
What’s the fix? Invest in the journey beyond the sale. Customers need to see their lives and businesses getting better as a result of using your product. That means every touchpoint needs to be positive. What can you do to help them succeed 30 days, 60 days, and 90 days after a sale? How can you support them beyond that to ensure they’re happy and successful?
Onboarding is the guide in your customers’ ongoing journey to “better.” You don’t have to solve every problem right away, but you do need to leave a good impression by treating customers well and doing everything you can to help them in that moment.
Onboarding pays off
Onboarding addresses your customers’ biggest problems to set them up for success early in their relationship with your company. As your teams communicate and collaborate to improve the process, you’ll see positive ripple effects: more successful customers, bigger contracts, happier employees, and a reputation for amazing customer experience.
It’s much harder—and more expensive—to make up churn than it is to create good onboarding. Rather than looking at it as a reactionary cost center, consider your onboarding process an investment. When done well, it will more than pay for itself.