‘Customer-Centric’ Framework for New Client Onboarding in B2B SaaS
The B2B SaaS industry struggles from not being able to set the right 'customer-centric' framework for their new client onboarding process. Numerous industry reports on client churn stats have shown that the seeds of a client renewal or saas churn are actually sown during the client onboarding stage in most cases (excluding the cases when churn happens because of external/client org issues).
So the next question is, where do things go wrong during this "new client onboarding process"—do we understand the root causes? And is there a pattern to the underlying process issues across companies?
Let’s start with the basics first.
Client onboarding is a simple process of getting your customers acquainted with your product. In retrospect, it is not just about teaching your customers how to use your product. In fact, client onboarding, especially in SaaS, is all about aligning your customer’s goals with your product.
When onboarding a new client, it becomes imperative that your onboarding team makes sure that the customer realizes the value of your product. If a customer fails to do so, the chances are high that your new customer onboarding has failed and they will be churning soon.
Based on my experience and conversations with several other SaaS industry leaders and a focused market survey we had conducted recently on this topic, I was able to put a pin on this issue.
It seems that while Sales, Marketing, Product, and Account Management (with a new incarnation of 'Customer Success') have evolved (to a good extent) from the legacy ‘upfront license+AMC’ model to the SaaS model, the current client onboarding process and the rest of the post-sales processes in many B2B SaaS companies are still done the same way as it was done even a decade earlier.
And this is not really "customer-centric."
It is, of course, well known that while SaaS software vendors got away with this during the legacy model, it is not sustainable in the SaaS model to not have a "customer-centric" onboarding and post-sales process.
One broad pattern seen across companies is that the new client onboarding happens in silos with different pieces of the ‘client onboarding action plan’ passed mostly sequentially across cross-functional teams (Sales, CS, Product, Tech, and QA teams involved in the customer onboarding) via proposal docs, meetings, email chains, chat channels, onboarding meeting notes, various excel, CRM, some product centric tools, and interestingly, some key information about customer onboarding next steps stays in Sales/CSMs’ heads as there is no structured way to document in a central platform currently!
The challenge starts when some surprises show up further down the customer journey, when some teams miss addressing a new use case or test scenario (which gets reported as a bug in production later on) or a new feature delivery is delayed (which blocks the client from getting full value as promised by Sales/CS!).
This happens because different functional teams are simply not aware of each client’s each use case (it's hard to keep track in silos when there are hundreds of clients, and each client has a bunch of use cases across multiple products, so it’s a multi-dimensional problem!) Or the teams couldn’t prioritize something appropriately (with so many items/client requests, etc.) as there is no single source of truth!
Now that the issues of new client onboarding processes in enterprise SaaS have been established, it is easier to create a framework for New Client Onboarding that is customer-centric in nature.
Addressing these onboarding challenges effectively would require a ‘centralized customer centric’ framework to:
This new approach would help establish a strong ‘data-driven’ foundation for what follows next in the client journey – product usage, value realization by the client, churn/renewal, and expansion.
This approach also complements existing ‘Customer Success Management’ tools available in the market by giving visibility of ‘Account Health’ during the onboarding stage itself for the SaaS provider and faster ‘time to value’ for their client.
For example, the existing ‘Customer Success Management’ tools focus on monitoring product usage as a leading indicator of churn, and while it is certainly valuable to see a product usage dashboard to determine if the client is getting value from the engagement – but usage is not always a leading indicator when something else went wrong way earlier in the customer journey!
In fact, the real leading indicator of customer churn can be seen in the ‘client onboarding status’ report, which is the output of the above-mentioned onboarding framework.
The "customer-centric" framework for new client onboarding can be used to answer the most important question – How to measure the ‘value realized’ by the client?
The right way to measure the ‘value realized’ would be to review the delta of this ‘client onboarding status’ report (covering all the use cases promised during the pre-sales/onboarding stage) and the ‘product usage status’ report (covering the use cases actually delivered to the client).
This review should be done on an ongoing basis both internally (e.g. in monthly Key Account reviews) and externally (in QBRs and monthly reviews with key clients) to close any gaps from both sides.
This would make renewal an obvious (and data-driven) choice for the ‘Key Decision Maker’ in the client organisation, rather than them wondering "I am not sure what value did we get from this tool in last year compared to what was agreed 12 months back?
And even though I personally ‘think’ we got some value, how can I show clear evidence of this (without building another PPT deck!) to my management for approval? "
To conclude, this new client onboarding framework would not only solve the customer onboarding and churn challenges, but also, in the future, this sort of approach would become a ‘competitive advantage’ for a B2B SaaS company as it empowers the entire post-sales operations to be true ‘customer centric’ and ‘data-driven’.
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