From Cost Center to Cash Cow: Rethinking Customer Onboarding

  • 17 April 2024
  • 1 reply
From Cost Center to Cash Cow: Rethinking Customer Onboarding
Userlevel 7

Customer onboarding, is the most crucial phase in the interaction between customers and a brand, because it holds immense significance for overall success.

Fortunately it’s essential. Overlook your onboarding experience and your retention will suffer.

Unfortunately it’s viewed as a cost center.

Why is that the reality? Here are the top two reasons (I’d love to hear your thoughts too)

  1. Resource Allocation: Onboarding requires people, tools, and time.
  2. Customization + Integrations: Depending on the complexity of your product or service, onboarding may require customization or integration efforts to meet the specific needs of each customer, adding to the overall cost.

How can we change that narrative? Here are some ideas I have, but please share your thoughts below!

  1. Emphasize the Long-Term Benefits: Measure things like customer retention, CSAT, and lifetime value.
  2. Quantify the ROI: Gather data around churn rates, upsells, and customer referrals.
  3. Align with Business Goals: A well-executed onboarding experience can help with brand loyalty and market differentiation which can impact the bottom line.

I’d love to hear how you’ve been able to help your executive team understand how onboarding can be a cash cow!

Drop your questions and comments below! 👇👇👇

1 reply

Userlevel 7

For those who weren’t able to make it or are remote here are the 3 main take-aways from our most recent #SodaSeries!

  1. Understanding CLT (Customer Lifetime Value) and CAC (Customer Acquisition Cost) is vital to making the change from Cost Center to Cash Cow.
  2. According to the Implementation/Setup Fee Study CAC Recovery, “companies with implementation fees typically see roughly 10 to 20% better net retention across different ARPUs than their non-implementation fee cousins.”
  3. “How do you know how much to charge?” Simply track how much time is spent on getting an average customer onboarded. Then multiply that by the hourly rate of each team member who was involved.

    For example if the onboarder spent 15 hours and makes $50/hr and an integration specialist spent 5 hours and makes $75/hr then that would be (15 x $50) + (5 x $75) = $750 + $325 = $1125 to break even on the implementation. 

Hopefully this gets your creative juices flowing for when you’re ready to make the case for charging for implementations! 

PS If you have team members in Lehi, Utah or surrounding areas, please encourage them to attend these Soda Series so they can share their knowledge with you and the rest of the team!