Customer success team in space managing SaaS onboarding

The Touchpoint: SaaS Onboarding Guide

If subscription revenue rules your business, then you need to invest continued effort in SaaS onboarding. How you treat clients in the first 30-days with your brand factors heavily into growth. This is your guide to  engagement touchpoints that increase customer retention and reduce churn.  

In this article:

  • What is client onboarding?
  • How SaaS onboarding is different
  • SaaS onboarding methods
  • No touch vs low touch vs high touch onboarding
  • Client onboarding metrics
  • SaaS onboarding checklist

What Is Client Onboarding?

Client onboarding is getting a client familiar with your software. It describes the client’s journey, from the introduction of your business to the use and enjoyment of your product. Client onboarding involves several elements, called touchpoints, where the client is engaging with your business in a meaningful way. There are a variety of touchpoint methods, to name a few: a sign-up form, reading a welcome email, participation in a call, downloading an ebook, writing a review, and/or using the software. 

Your goal is to ease a client into using your software to retain their business. Well-crafted onboarding procedures are executed to make the client’s experience simple and joyful. Overloading them with too much information too quickly will make them run, and will hurt your business over time.

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There is a lot of low-hanging fruit to go after. You’d be surprised how powerful a simple review is—Casey Winters

How SaaS Onboarding Is Different

Many SaaS companies have a subscription-based pricing schedule. Retention is the battle here, and keeping clients past the 90-day mark is crucial to scale and grow SaaS operations. However, due to  some software complexities, a client could have difficulty understanding your product. When a client doesn’t understand they don’t find value in your product and are more likely to disengage. 

Here are the goals of SaaS onboarding:

  • Help clients discover the benefits they will receive quickly
  • Eliminate the decision paralysis between competitors
  • Educate clients on how to use the product
  • Inspire positive engagement to fuel future sales 

SaaS onboarding showcases the major perks of the software that lead to a customers’ first success. Thoughtful onboarding procedures show your customers that you care, transforming them into brand advocates, and in the SaaS industry word-of-mouth marketing is critical.

SaaS Onboarding Methods

Successful SaaS onboarding has structured client touchpoints. Through trial and error, you perfect the process for gaining new clients and introducing your software. Get to know these methods so you can implement them in your workflow.

No Touch vs Low Touch vs High Touch Onboarding

Client onboarding is built on engagement. One of the first decisions a business should determine is how best to engage with customers. There are 3 customer engagement methods for SaaS onboarding. They range from automated tech solutions to person-person interactions:

No Touch Onboarding Method

No touch is a fully automated solution with no human interaction. It is also referred to as tech touch because all engagement with the customer happens with tech. The downside is that without personal connection clients feel the company is uninterested in their success, and see the company as cold, or removed.

Examples of No Touch Onboarding:

  • Automated Chat Box or Automated Text Messaging
  • Info Blogs
  • FAQ section

Low Touch Onboarding Method

This engagement model has minimal human contact with the client. It is a hybrid touch method between automated tech and some human interaction. Tech touch methods are set up to manage queries and segment clients into no or low touch categories. This model frees up staff to address nuanced situations with client interface, while general inquiries are resolved with low touch methods like an email or an in-app tip notification.

Examples of Low Touch Onboarding:

  • Forum
  • Email drip campaign
  • In application tips 
  • Videos
  • Downloadables
  • Contact Form 

High Touch Onboarding Method

This is a model that demands human interaction. A CSM or concierge offers customers a point-of-contact at various levels in the sales funnel and product lifecycle. It requires more participation and often relies on a person or team to maintain customer account information for outreach. Developing an intimate connection with your clients plays a huge role in retention. This proactive management model helps clients feel valued and makes sure they know where to find a solution if a problem arises. 

Examples of High Touch Onboarding:

  • Phone call
  • Virtual meeting/webinar
  • Remote access
  • Face-face interaction at a location

Pros And Cons Of Low Touch vs High Touch Onboarding

Timing is everything with customer engagement methods. Both models are effective when deployed at the right time. You tend to see companies shift from low to high touch onboarding when they are tired of investing in new clients, only to lose them; from high to low touch onboarding while scaling the business.

High Touch Method

Good for complex software

Adds Authenticity + Trust elements

Adds value to the product

Helps retain clients

Can be costly 

Harder to scale

Can be viewed as pushy

Low Touch Method

Good for simple software with tested UX and UI

Decreases trust in your brand

Scalable frees staff for unique customer events

Harder to forecast customer churn

Less expensive for a large customer base

What Is Concierge Onboarding?

Concierge onboarding is when a company dedicates a person to guide clients through onboarding. The concierge is a high touch onboarding method that helps to convert potential clients by providing them with the knowledge and resources they need to use the product. Plus they assist in walk-throughs and welfare checks after a client signs on with the company. This adds to the perceived gain a client gets from the purchase and increases customer lifetime value (CLV) for the company. 

For Example: your bridge app has some complicated features. A new customer needs to use your app to migrate information from one system to another. Your company offers a skype call or a zoom meeting with a concierge, to ease issues with the migration.

What Is A Customer Success Team?

Customer success is a client-centric engagement model. Businesses work with clients to understand their needs and proactively address issues through personable interactions. Therefore, a customer success team will establish the client-centric culture of your company with these skills:

  1. Cultivating customer relationships and delivering highly satisfactory services
  2. Building trust by addressing customer demands and offering solutions
  3. Analyzing company impact and what doesn’t work during onboarding

Customer success team members are the face of the business in SaaS onboarding. They are the first and last people a client will interact with. A good CS team will reduce churn and improve other key SaaS metrics.

Accountants setting up a customer success team banner

Longer Onboarding Process

Short onboarding processes are always preferred by customers and businesses alike. The time it takes for your new customer to understand and use your product confidently will ensure satisfaction with your brand. Although, there are situations where you will need to plan for a longer onboarding cycle. The more features to your product, the more likely you will need to account for a long client onboarding window. 

In SaaS, it is common to see long-term client onboarding projects extend past 3 months. While it is not ideal, it can work to your advantage because it is an opportunity for true personalization. Customers will require more knowledge and touchpoints with your team. Once they make the purchase it is your job to educate them with high touch onboarding methods. If your SaaS model has complexities, it is essential to present the right tools that induce a customer success milestone.

Measuring Client Onboarding Success

As with anything in business, there are key performance indicators that track the efficacy of client onboarding. Here is the cold hard data to analyze, that will inform customer retention and increase subscription revenue.

What Is Churn Rate?

Churn is the rate at which customers quit doing business with a company. For SaaS, it specifically measures the percentage of clients/accounts that canceled or chose not to renew their subscriptions. To calculate Churn, take the number of clients you lost and divide that figure by the number of clients making a purchase. You can calculate any time length but it is common to measure for monthly, quarterly, and annual reports.

Churn Rate Formula

Churn Rate = (# of Lost Customers / Total Beginning Customers) x 100

For Example: A company had 375 customers at the start of the 3rd quarter and 30 customers canceled subscriptions.

Churn Rate = (# of Lost Customers / Total Beginning Customers) x 100

Churn Rate = (30/375) x 100

Churn Rate = .08 x 100

Churn Rate = 8% for Q3

Different Types Of Churn

Not all churn is equal in SaaS. You have a higher chance of losing a client during onboarding, but that doesn’t mean churn doesn’t happen in other areas of the customer journey. 

Here are 4 types of churn in SaaS:

Onboarding Churn

This measures the clients that dip out during onboarding. They have initiated engagement but don’t get to the purchase point and disengage. Many of your leads don’t reach success touchpoints because they don’t see the benefit in your product. 

Product Churn

The measure of how many clients stop using your product. It includes actual usage of the product, like going dark on your platform, or failure to renew the subscription. Product usage churn is generally viewed in 90-day windows to test customer engagement methods.

An accountant calculating churn rate and customer retention rate

Credit Card Churn

Credit cards expire year-round. That means a certain percentage of your customer’s credit cards are going to expire every month. Credit card churn is when you lose a payment because a card expired. A portion of this type of loss is preventable with payment update reminders, but in some cases, this is linked to product usage churn. If a customer is not using your product then they aren’t going to maintain their account.   

Champion Churn

This is the loss of large recurring revenue from business clients aka champions. This churn occurs when big clients opt out of a subscription with your company in favor of your competitor. It can also be the discontinuation of marketing with an influencer or affiliate who sponsors your software.

Additional Client Onboarding Metrics

Churn gets all the hype in client onboarding. However, this metric doesn’t answer why customers dropped off. To do that, get to know these customer metrics:

Customer Retention Rate (CRR) 

This is the happy cousin to churn rate. It measures the loyalty of your customer base, and how many customers you are retaining from onboarding.

Customer Retention Rate (CRR) Formula

CRR = ((Total # Ending Clients – New Clients) / Total # Beginning Clients) x 100

For Example: A company began the 3rd quarter with 375 clients, earned 50 new clients, and ended with 400 clients. 

CRR = ((Total # Ending Clients – New Clients) / Total # Beginning Clients) x 100

CRR = ((400-50) / 375) x 100

CRR = (350 / 375) x 100

CRR = 93% retention for Q3

Keep in mind your customer retention rate will always be the inverse of your churn rate. 

Time to First Value (TTFV) 

This is a measurement of the time it takes to get to the customer’s first success moment with your product. The element of value that a customer receives is specific to the product you offer, but the less time it takes to get there the better. Perhaps they have used your native features and saved X amount of time or dollars, or they engaged with the platform a certain number of times. Don’t confuse TTFV with the time it takes to get the customer set up to use your software, which is still onboarding.

Note: Send a shout-out once they reach that customer touchpoint, as reminder of where they came from and the convenience you have provided. 

Customer Complaint Report Rate (CCRR) 

Keep tabs on your customer complaint rate. It could flag issues in your onboarding process, and dissatisfaction with your product. Calculating your CCRR is simple, it is the number of complaints you receive by your total customer base, expressed as a percentage. You want people to love your product so minimizing complaints via more outreach is always advised. 

Metrics that accompany CCRR are First Contact Resolution Rate and Escalation Rate. Customer complaints should be resolved quickly; you can’t go wrong with the 1:1:1 rule. A customer success member should respond to the complaint within 1 hour, have a solution, or escalate to a higher ranking team member within 1 day, and the issue should be solved within 1 week. This rule doesn’t always work, so utilize communication to reduce the negative impact of customer complaints.

Customer Lifetime Value (CLV)

This is an estimate of the value of an individual customer. This figure represents the purchase value a customer has, as well as the relationship you have with them. Striving for customer loyalty has a positive effect on your business. It is easier to sell to a repeat customer than earn a new one, plus this customer is a key targeting persona to drive marketing campaigns. 

To calculate CLV you need to have a framework for measuring customer value. That typically means a customer relations management system, to track engagement with your brand. Once you retain customers past the year mark, look at the value of their subscriptions. Consider all items of value like the cost of their subscription, any add-ons purchased, and or referrals made. Then multiply this value by the average lifespan of your customer base.

The Essential SaaS Onboarding Checklist

SaaS onboarding is going to look wildly different for companies at different levels. It all comes down to your product, revenue model, funding, and approach to marketing. No matter the size of your business refine your client’s journey using this SaaS onboarding checklist:

  1. Before launching, perform market research by signing up for your competitor’s product to observe their client onboarding methods. 
  2. Make sure your employees understand your software. Provide comprehensive backend training to your customer success team so they in turn provide excellent user end support to your clients. 
  3. Clearly outline customer success team responsibilities and the full scope of your onboarding project.
  4. Invest in an automated customer touchpoint system or customer relationship management software (CRM). It will track client onboarding, give updates on the customer journey, and provide you with data necessary to provide segmented marketing and improve your user experience.
  5. Design a celebration moment that applauds or rewards a customer for patiently going through each step of the onboarding process.
  6. Optimize onboarding completion time. The faster they understand your product, the faster they will start experiencing the value.
  7. Explore common challenges in software implementation. Figure out what makes your software more accessible to your clients. Never stop testing, surveying, and experimenting.
Customer success manager doing a walk through in SaaS onboarding

Sincerity Is The Seed In Client Onboarding

Your mission in SaaS onboarding is always clear—satisfy the customer. How you set up onboarding will pave the way to earning new customers, retention, and increasing profit margins. In today’s speedy and distracted world you will stand out when you show sincerity and personalize your customer journey. As always if you need help fine-tuning your backend, give us a call.

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