Why User or Customer Onboarding is so Important — Lincoln Murphy

Last updated on June 13th, 2023

Pardeep Kullar
Pardeep Kullar

A summary of “Why Customer Onboarding is so important” by Lincoln Murphy. Discover the true value of the onboarding process from the customer success consultant and author of ‘Customer Success: The Definitive Guide’. Find more Lincoln Murphy articles on Sixteen Ventures.


Transcribed by Upscope -‘See your user’s screen from live chat’.

Key points covered:

  • What is onboarding?
  • When should I consider a customer “onboard”?
  • When do customers get value?
  • Why do customers churn?
  • The 3 key results from good onboarding process

What is onboarding?

Within a company there’s going to be users. There are human beings that are actually going to be consuming your service or interacting with your product. We need to figure out a way to ensure that those customers and those individual users achieve some sort of value as quickly as possible.

So, Let’s talk about onboarding in general.

What does it even mean? So, we talk about onboarding as if it’s a phase. As if it’s a process that has an end point. But what is that end point?

When should I consider a customer “onboard”?

I’ve seen it where people will say a customer or user that’s been with us or in the system for 30 days, is onboard.

But that doesn’t make any sense at all. That has nothing to do with whether or not they are getting value. It has nothing to do with their success. It has simply that you have decided on an arbitrary time frame. So, it’s not about time in the system, it’s about something else.

So, right there we have to figure out what that something else is. And the way that I define “onboarded” is this:

The user or the customer, depending on what we’re measuring is either getting:

  1. Value from their use of the product or consumption of the service.
  2. For the first time outside of sales and marketing, they see the value potential in the relationship with us.

When do customers get value?

So, what we have to figure out, is the point where they first get value. Where do they first start to achieve their goals?

  1. When they first start achieving the things****that are going to make sure that they’re on the road to their desired outcome.
  2. Even if they start using, it’s going to take more time before they get value (This is especially true if it’s a more complex product)**.**There’s a point where they will start to see the real value potential in their relationship with us. Maybe it’s the “Ah-Ha” moment. They haven’t really gotten value but for the first time in the product, they see the real value potential.

Once they hit these marks, we can say, they are onboard. So, onboarding is to get them to that point. So, we figure out where they need to get to, and we reverse engineer the process to get there.

What are the things that they have to do, in order to get value? Or, in order to get to the point where they see the value potential. What are the things they need to do in our product? What are the things they need to do outside of the product, in their world? We figure out what that is, we build a process to get them there. That’s it. That’s onboarding.

Now, that’s so simple to say. Making it actually happen is a whole different story.

Why do customers churn?

I always say that the seeds of churn are planted early. And what I mean by that, is very often, customers that churn out (actively cancel), or don’t renew, will often have issues very early in the life cycle. In other words, during the onboarding process. Which means, customers that never really get up and running or don’t get value, never got to the point where they saw the real value potential in a service or product. From the very beginning really, they have one foot out the door.

And what the problem is usually, almost every single time, it’s the vendors fault. If you’re the vendor in this case, and you’re having onboarding issues, it’s your fault. You basically told the customer from the very beginning of the relationship, we don’t care about you. We don’t care if you’re successful.

If you haven’t designed a process to get them up and running, to get them onboard, very often we just dump customers into a product and hope that they figure it out. We let them fend for themselves. Rather than designing the process to get them to that point where they’re onboard. If we don’t do that, we are basically telling them that we don’t really care if they are successful. I have your money. I have your contract. We’re good to go. Leave me alone and do your thing. Right?

If we’re being honest, that’s basically what we are doing. Whether that’s the intention or not, that’s the reality. What we need to do, is design that process so that as soon as the customer signs, as soon as we’ve gone through the sales process, which is exciting. Even in a B2B world, there’s this excitement. There is this energy. Something positive. Carry that through!

A lot of companies, even today, still think that **when the sale is done, that’s it. In fact, that’s just the beginning of the relationship. **You can’t drop the ball right after we close the sale. We have to continue with it. We have to carry through. We have to keep the excitement going and carry it through until we have them onboard. So they’re getting value or see the value potential.

The 3 key results of a good onboarding process

If we just did that, those seeds of churn wouldn’t be planted early. We would be planting seeds of massive success. We would be setting our customers up to:

  • Stay longer
  • Buy More
  • Advocate for your company

We want those three things. I’ve never met a company that didn’t want those three things from customers. But I run into companies all of the time, that aren’t doing anything to ensure that they get all of those things. And that’s what’s really confusing.

So, what can you expect?..

Well, your churn is going to go down, you’ll keep your customers longer, you’re going to set them up for success, so that you can then sell more to them through up-sell cross-sell, and you can expect them to advocate for you.

These steps don’t just happen magically, you have to do other things that make sure that they actually happen. But when you set them up for that success. You set them up in a way that those things can happen if you operationalize those appropriately. What you can expect is a bigger and more valuable business for you.. Kind of important!

Looking for more expert tips?

Read our summary transcript of Mitchell Harper’s video “What about the other 96% who don’t buy?”

Or, dive into our summary of Brent Leary’s interview with Des Traynor, one of the founders of Intercom. Find out why you should be signing up for your own product every two weeks! Churn and retention are the new conversion

Pardeep Kullar
Pardeep Kullar

Pardeep overlooks growth at Upscope and loves writing about SaaS companies, customer success and customer experience.