By now, you would have read at least ten articles that talk about customer onboarding and its importance. And some of it would be inclusive of what KPIs to track as an onboarding manager or as a customer success manager, etc.
There would be some articles around the right customer onboarding software as well, and of course, during your research, you would have come across many product review sites that will help you make a sane decision.
In this blog, we won’t be talking about any of it. Instead, we will be looking at how to measure the success of your customer onboarding process.
When we talk about measuring anything, especially in business environments, it always means it is important to track these metrics as they are very crucial for the business.
Let’s take a look at why you should measure your customer onboarding ROI.
Knowing how critical your customer onboarding process is, it is also important to evaluate the effectiveness of your customer onboarding process. This will help you understand the strengths and weaknesses of your onboarding process and which stage of onboarding needs investment or improvement.
Measuring your customer onboarding ROI will help you track what is working in your favor and what needs work. This, in turn, will help you allocate your resources smartly.
If you see that your ROI is in the negative, you can allocate your resources to managing and optimizing your onboarding process in a better way.
With the right customer onboarding process, you set the right expectations with your customers, which leads them to be loyal to your product. Hence, measuring your customer onboarding ROI will help you track what is working for your customers and what needs attention to reduce customer churn.
Constant measuring and tracking of customer onboarding ROI can help you identify the most cost-consuming stage of the process and help you optimize it accordingly.
This will help you reduce costs associated with resource management, business outcomes, implementation fees, etc.
Measuring the ROI of customer onboarding can help you build a solid foundation for data-driven decision-making and optimization. This also helps in regular improvement in your processes based on positive and negative outcomes.
Now that we have established the importance of measuring the return on investment on customer onboarding let us take a look at some of the important metrics to track. We will also be covering how to measure the metrics of customer onboarding ROI.
You would have definitely used the formula for ROI when it comes to business, i.e.,
ROI= Net Profit/Cost of Investment * 100.
So, we’ll not talk about the net profit part, but let us take a look at what could be categorized as Cost of Investment when it comes to enterprise SaaS companies.
To ensure that you are getting a positive return on investment with your customer onboarding, it is important to track the right metrics for the same.
We have made a list of important customer onboarding metrics that you should be tracking to calculate the ROI on customer onboarding.
Time to first value means the time taken for your customer to realize your product’s value in their workflow. It is the first AHA moment of your customer during onboarding.
The sooner your customers realize the value of your product, the longer they will be sticking around.
It is important to measure this time and the investment done by you in the time for the first value.
When we say that onboarding matters, it is because onboarding sets the stage for your customer’s relationship with your product in the long run.
Ideally, every B2B SaaS company aims to complete the onboarding process as quickly as possible, but what they forget to take into account is that the customer onboarding process needs to be value-driven as opposed to product-driven.
Therefore, tracking the time taken to complete a value-driven onboarding process is an important customer onboarding metric.
The amount of investment done in customer support also needs to be tracked while measuring the ROI on customer onboarding.
Calculating the cost of customer support is a two-step process. You will need to calculate the following.
Once you have the cost of each action involved in customer support, you have to total the costs and get the final cost of customer support.
SaaS customer churn is a nightmare for all enterprise SaaS companies. Therefore, it is one of the most closely tracked metrics when it comes to calculating the ROI of customer onboarding.
We have established the correlation of how customer onboarding impacts customer churn. Hence, calculating the customer churn rate will also help you understand if your customer onboarding efforts are in the right direction or need help.
You can calculate the customer churn rate using the following formula.
Net promoter score and CLV (Customer Lifetime Value) are two of the most important metrics of customer success.
Most SaaS companies rely on their existing customers when it comes to profit, hence the NPS and CLV form the basis of measuring if your onboarding efforts are in the right direction.
Calculating NPS is pretty easy as you can share a survey form with your customers to know if they have liked your product.
The formula for calculating CLV is as follows.
Measuring the ROI of your customer onboarding is equally important as strategizing for the process. Even more so. With the right metrics, your team will be able to prioritize what needs attention vs what is already in the right direction.
The first step in getting a positive ROI on customer onboarding is investing in the right customer onboarding software. With the right software, the cross-functional teams will be able to deliver value at scale as the tool acts as a single source of truth for customer onboarding.
To know if your onboarding efforts are in the right direction, we suggest that you go for a free onboarding consultation. with Mr Chirabrata Das (Director of CS at CogniSaaS) by clicking the link below.