What Is Customer Onboarding? Tips And Best Practices

In a world that becomes more and more virtual due to automation in the e-commerce space, nailing the customer onboarding process (or user onboarding process) is key. 

It’s the first interaction your potential customer will have with your product or service and it will determine their first impression.

If the onboarding process is smooth, and your customers understand how it works, they will be more likely to stay with your brand and pay a higher price.

If you’re still not yet convinced yet, let me bring some scientific facts about one of our own biases as humans—the Primacy Effect. In a nutshell, we tend to better remember the first part of an experience, which is exactly where customer onboarding processes happen.

So, without further ado, in this article I’ll be covering:

First up…

What is customer onboarding?

So let’s define what customer onboarding or user onboarding is. 

Customer onboarding can mean many different things, but it is usually a process that starts right after your customer signed up or purchased your product/service.

In this process, your company gives your customers a guided tour of what’s possible to do with the product or service they know, as well as those functionalities they don’t.

In other words, you’re done with the sale, and now customer retention and upsell begins.

Attracting new customers can be 5 to 25 times more expensive than retaining them, depending on the industry, so it’s worth learning how to design the customer onboarding process to avoid added acquisition costs. 

It’s also important to mention that, sometimes, an onboarding process can happen a long time after the first sign-up. Your customer might have purchased a new type of service or product and need to be onboarded to it, or you release new features and want your customers to go through a new tutorial to learn about them and any new integrations you offer.

Therefore, this article won’t tell you exactly how to build an onboarding process step-by-step, because there are many permutations to it, but it will tell you what you need to think about in general to nail your customer onboarding process.  

Why is nailing customer onboarding processes so important for your customer success?

Let’s look at why nailing the customer onboarding process can be so important for your company: 

You can help your customers learn how to use your product or service faster

‘Learnability’ is the quality of certain user interfaces and products that empower users to learn how to use them and make the most out of their features.

We all have limited time and too many digital and physical distractions in our world, so a good onboarding process can shorten users’ learning time and keep them with your product.

According to AppFlyer’s recent study, almost 1 in 2 mobile apps downloaded are uninstalled within 30 days! A good onboarding process will prevent this situation. 

You can reduce potential customer churn

As a follow-up on the first point, when users get the hang of your product, it will make them feel familiar with it and they will feel “in control” while using it. A side effect is can be explained by science—the Familiarity Heuristic. It happens when people favor the familiar place, people, and things over unfamiliar ones. So, bear this in mind.

Nailing an onboarding process will make customers more familiar with your product quicker and, once they’re familiar, they’re less likely to switch. It’ll impact your churn rate. 

You can personalize the customer experience and increase revenue and customer loyalty

A good customer onboarding experience is an essential piece in your company’s ability to personalize the customer experience to multiple customer segments, and even to customize it for individuals. Asking your customers some simple questions at the beginning of the customer onboarding process can even help to personalize the onboarding process itself. Personalization helps with customer retention and upsell.

According to McKinsy, companies that use personalization can expect to generate revenue that’s 40% higher than the average in the market. In addition, 71% of the customers expect companies to deliver personalized experiences. That’s why it’s important to keep personalization in mind when designing your customer onboarding process. 

What to think about when designing customer onboarding processes for new and existing customers 

There are multiple types of flows and use cases that can be considered customer onboarding.

It could be a profile-creation flow that happens right after a new customer signs up to your product. In the banking world, it could be a verification process needed for opening a new type of account.

It could also be a simple three-step tutorial in the Saas industry you release into your CRM tool to let your customers know what’s new after the latest feature upgrades. 

Since there is such a big variance between these flows, there’s no “one-size-fits-all” type of solution. Customer success looks very different in Saas companies, banks, or the education space. 

Therefore, the purpose of this part of the article is not to be a complete how-to guide, but to point out the things you need to think about as a user experience designer or a customer success professional working on any of these customer onboarding processes.

Let’s explore some important areas to consider while working on customer onboarding flows. What they all have in common is a way to optimize the customer journey with a lot fewer pain points, especially for new users.

Related: Customer Success Software For CX Teams

Personalization and data collection in your customer onboarding process

You are very likely to have multiple personas using your product. So, if you want to design a great user experience for your product or service, it pays to bear in mind that not all your customers are going to want the same things. 

This is why personalization is so important, and a good customer onboarding process can get you there much faster. By asking a few simple questions at the beginning of the onboarding process, you can very easily collect the necessary information to personalize the experience for each persona. 

For example, a question such as “How would you rate your level in language X – 1. Absolute beginner 2. Intermediate 3. Advanced” in a website that offers language tutorials can get your customers where they want faster by offering relevant content.

This way, the “beginner” persona can start their first touchpoint with you after their first login by learning the ABC in a new language.

But, what you need to remember here is that, nowadays, people are becoming very sensitive to any piece of data you collect about them, especially with legal frameworks such as the GDPR in the EU. Therefore, you should only collect what’s necessary for you to personalize the experience. 

In addition, you should use your microcopy to explain why you need the data, how you’re going to protect it and be compliant with the regulation, and how it’s going to make the experience more relevant to your users. 

Let’s look at a good example. 

Duolingo asks you if you are new to Korean or if you already know some, so it can take you to a placement test. 

That’s the kind of data customers want to share to get to where they want faster. 

duolingo beginner level screenshot
Duolingo’s beginner-level question is a great example of capturing necessary information to personalize and improve onboarding for every customer.

Over time, if you use user research, you’ll find out what matters the most to your users and you’ll be able to act accordingly, collect the most relevant data, and use it to personalize the experience even further. 

How long or short should the customer onboarding process be

Whether you’re offering an in-app tutorial of the latest product features, collecting data for further personalization, creating a new profile, or just welcoming new customers, your onboarding process needs to be at the right length. 

Customers who are less tech-savvy might need more hand-holding in the beginning and will want a longer process, while customers who have seen many onboarding flows would want it to be shorter.

Aim for a good middle ground, between 3-5 steps. Most adults can store between 5 and 9 items in their short-term memory, so 3-5 steps will guarantee better memory retention.

The other thing to remember is that the visibility of system status (think progress bars) is an important part of the usability of any system, so don’t forget to include a progress bar or a step indicator. 

If your process is complicated and contains many steps, such as a Know Your Customer (KYC) verification process in a bank, you’ll need it even more in order to make sure your customers aren’t dropping off in the middle. 

creating new profile screenshot
3-5 steps is a good middle-ground for an onboarding process, and including a progress bar will help with completion.
Image by Jenny Tran.

The image above shows a good example of how a step indicator at the top gives a good indication of where a customer is in the process of creating a new profile. 

Sometimes a nudge approach is better than a linear customer onboarding process

In case you’re onboarding new customers and you want them to complete their profile on your website, not all their data is going to be necessary right away for them to use your product. 

Instead of taking them through long onboarding flows that will require them to fill out long forms, you can take a nudge approach by showing them what still needs to be completed to get to 100%.

By nudge approach we mean “get them to act” but not necessarily ask them to do it right away without being able to take another action. 

In the image below, we can see a good example of how it’s done on the Interaction Design Foundation’s website. 

interaction design foundation screenshot
A nudge approach that encourages users to complete their profile at their own pace and shows progress. Image taken from the Interaction Design Foundation’s website.

The key thing to remember here is that it’s important to think about what the customer needs to absolutely see and do right away, and what can be revisited and completed later down the road. 

You can use this approach for profile creation, tutorial completion (e.g. “complete 1 more tutorial to finish 100% of the welcome series”, etc.) as well as other parts of the onboarding process. 

Let your customers take it one step at a time and celebrate milestones

You sell your product or service to new customers every day and, understandably, you’re eager to welcome them on board and show them the full potential of the little world you created for them. After all, who doesn’t want to be a good host? 

This is ten times more important during activation, the first time you start showing your users the functionalities and the value of your product.

However, remember that you don’t want to overwhelm your new customers by showing them too many things right away. It’s scientifically proven that too many choices can lead to information overload and decision paralysis

Bear this in mind, and remember to design your onboarding process one step at a time. For instance, one screen for every feature you want to introduce in your walkthrough, or one step for every part of a new profile you want your customers to create. The image below shows a good Saas-related example from Slack.

slack multiple step approach screenshot
Slack’s multiple-step approach for an in-app tutorial that breaks down its main features to become familiar with.

To motivate your customers to go through the process and actually finish it, remember to celebrate those little milestones. For instance, a message such as “Congratulations! You’ve just completed your job seeker profile and you’re all set to find your next career move” can go a long way. 

The image below shows a good example of how Upwork did it after completing a profile. 

upwork completing profile screenshot
A little positive reinforcement goes a long way. Taken from Upwork’s website.

Think about ways to incorporate a “Try before you buy” approach into the process

Usually, the customer onboarding process starts once your customers have already made a decision to use your product or service. 

However, by taking a “try before you buy” approach, you can simulate the experience for them so that a simulated process can help to potentially onboard them to a product even before the “official” acquisition takes place. 

This approach will contribute both to your knowledge base by collecting more customer feedback, and to your new users’ knowledge base about your product.

We can see this approach used in financial apps that offer practice accounts that let you experience investing in the stock market and see if it’s for you. 

Below, you can see an example of the Royal Bank of Canada offering this service. 

rbc practice account screenshot
RBC’s practice trading account allows customers to test-drive the product before purchasing. Taken from RBC’s website.

Set metrics to measure the success of your customer onboarding processes

This is a very important item to include in your onboarding checklist, and I would recommend that you start thinking about it even during the kickoff meeting. 


Many teams are involved in designing customer onboarding processes and they all want to show the business results in the form of a successful customer onboarding process. 

Therefore, it’s important to think about these metrics early on, and see how they feed into the business model and the business strategy of your company. 

Think about it. Different teams have different definitions of “success”. What the sales team considers success (high conversion rates) differs dramatically from the customer support team’s definition (lower call volume) or the customer success team. Sometimes, even different team members within the same team will have a different definition. 

Metrics should be part of your workflow to align everyone with what a definition of a successful customer journey looks like. 

Good metrics could help you measure specific goals you might have. For instance, new clients’ successful walkthrough completion. Wouldn’t it be nice to show management that you designed a great onboarding flow and that you have evidence in the form of CX metrics to show that? 

Examples of such metrics can include: 

  1. Time to complete onboarding
  2. Customer engagement
  3. Time to first-time value.

Later down the road, you can even take it a step further and build an attribution model to show how a new client completing a successful customer onboarding process is more likely to convert to new products over time, and how that contributes to the customer lifetime value.

It’s a bit more advanced, but this way you can show the contribution of successful processes to the overall conversion rate and retention rate (and potentially, to a lower churn rate). 

After all, numbers are one of the best ways to show happy customers, so don’t forget to include related metrics in your onboarding checklist.

Wrapping up

As you can tell by now, nailing an onboarding process isn’t a simple task. 

Many people think about the tactics when they think about customer onboarding processes with things such as a “welcome email” or a message intercept coming to mind. 

However, nailing a customer onboarding process requires any experienced designer to think holistically beyond the tactics. It requires designers to see all the moving parts that not only help make this process smooth but also leverage it to create a better overall user experience for your product, and even leverage it for new customer acquisition.

You really need a thorough customer onboarding strategy to succeed in this business and retain your best customers. Remember to think about how you can personalize the process to different personas by collecting the right information, think how long or short the process should be, how to break it down into small steps, and celebrate milestones.

But keep an eye on the big picture. Do you want to take a nudge approach or a linear approach? Could you let your customers simulate part of a future experience and decide if they want to continue? It can actually shorten the onboarding process.

Also, don’t forget to include some metrics to show what a successful customer onboarding looks like. In the business world, we want to show how new actions we’ve taken contribute to the business model.  

Lots to think about, but it’s worth it. By nailing the customer onboarding process, your customers will be much less likely to switch brands. Also, once they feel in control of the little world you created for them with your product or service, they will be much more likely to engage with it even more and spread the word about it. 

Related Read: Optimizing The Website Customer Journey

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