The first 90 days of a customer relationship are crucial for ensuring long-term retention and maximizing the lifetime value of that customer. Just as a new leader in politics, sports, or business has a limited window to make a positive impression, so does a company with its new customers.
The 90-Day Onboarding Window
Research into subscription-based businesses has shown that effectively onboarding a customer within the first 90 days can lead to a significant increase in their lifetime value, sometimes up to 300 percent. This underscores the importance of getting customers up and running with your product or service as quickly and smoothly as possible.
A compelling example of the impact of effective onboarding is seen in the case of Constant Contact, a marketing software provider. In the past, Constant Contact struggled with retaining new customers during the initial 90-day period. Their old onboarding process focused on the “who, what, when” approach. Who a customer wanted to send their campaign to; What a customer wanted to send; and When the campaign was to be sent. Essentially, customers were asked to upload their email database immediately after signing up for the service. This often proved challenging for new users, leading to frustration and a high churn rate.
Reprioritizing the ‘What, Who, When’ Approach
To address this issue, Constant Contact revamped its onboarding process, shifting the focus to the “what” stage first. Instead of immediately asking customers to upload their email list, they encouraged users to create their first email campaign right after signing up. By providing access to a library of stock images and making it easy for customers to see their campaign come to life, Constant Contact created an emotional connection with users early on.
Only after customers had successfully created their first campaign and experienced the benefits of the platform did Constant Contact introduce the “who” aspect of uploading their email list. This strategic reordering of the onboarding flow significantly reduced customer churn and improved retention rates.
This example illustrates the importance of reducing friction and prioritizing customer experience during the critical onboarding period. By focusing on delivering value and creating positive experiences for customers in the first 90 days, companies can lay the foundation for long-term success and maximize customer lifetime value.
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