How data onboarding may be affecting your churn rate

Published on

July 1st, 2022

Author

Sarah Wright

Category

How To

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Tackle customer churn from the start

This article was crafted by us and sponsored by our friends at Flatfile.

Churn happens. It just does.

Chances are you already have your eye on it, or at least you know you should. In the words of Lenny Rachitsky (ex-Product Lead at Airbnb), your churn rate is a powerful metric because “it tells you how many new users you need to bring in each month in order to grow. Losing 2% of users each month? Grow by 2% and you’re 📈.”

Churn is an ongoing issue because it’s easily provoked. Take these two stats:

According to GetFeedback, 33% of US consumers will consider switching to another company after just one bad experience.
Gravy found that customer churn can be reduced by 67% if companies are able to solve customer issues during the first customer support interaction.

Which brings us to the importance of onboarding to customer retention, where Lenny says you should be focusing most of your time. While retention efforts span the funnel, many marketers, salespeople, and founders overlook a key opportunity to address the customer experience — in onboarding.

Donna Weber, author of Onboarding Matters writes:

“Bringing customers onboard is the most important part of the customer journey. Yet, despite this being so critical, poor onboarding is the main cause of churn. It’s estimated that more than half of customer churn is related to poor customer onboarding and poor customer service.”

During a recent Flatfile-sponsored webinar, “The Secrets of Customer Churn,” Weber and other experts chatted through a handful of lessons that makers should consider in optimizing their onboarding experience for retention. We’ll give you the tl;dr:

1. The hand-off should feel as smooth as an Olympic baton relay. As customers transition from Sales to Implementation, BOTH sides often go through shifts in teams, discussions, and priorities. If the transition isn’t smooth, this is where your customers immediately start to lose trust. “There shouldn’t be a feeling of being passed off on the customer’s side… you’ve established a relationship and now you’re showing customers the path to success.”

Keep in mind too that you can often get ahead of the hand-off — customer and account management teams can listen in on sales calls or review support tickets, for example, to gain context and prepare to receive the baton.

2. The path to success should be transparent and clear to both your internal teams and the customer. Share that path and ensure the customer is clear on what their role entails. Learning a new tool is work and the customer’s commitment is necessary for effective onboarding. Holding customers accountable for learning your software early on (and then giving them all the help and resources they need to do so) helps them be more successful in the long run, and keeps them around for longer.

3. Smart companies go the distance by making the data onboarding part of the experience fast and seamless — which is the opposite of how most people see data onboarding, according to a recent survey by Flatfile. We dug into this one more so you know how to solve it.

The problem with data onboarding

Customer data onboarding is the data-specific piece of the overall onboarding experience, the process of importing a customer’s data to a new software product. That data might be coming from other software, spreadsheets and CSV files, activity logs, and more, making this process especially challenging, time consuming, and difficult to plan for.

In Flatfile’s annual “State of Data Onboarding” report, which surveys stakeholders closest to the data onboarding process, 78% of survey respondents said they run into data onboarding issues, with 34% saying it happens often. The issues turn up most often as a result of difficulties from data formatting (76%) and validation (69%), but can also include limitations as a result of large volumes of data (27%) and problems migrating under heavy workloads (24%).

So how do you make data onboarding better for your customers? Today, the vast majority of respondents are uploading data manually, using a homegrown data importer. Nearly three-quarters of survey respondents agreed that this doesn’t feel like the best option.

If your engineering team has the resources to build an advanced data import tool…wow, you must be sprinting very fast. Chances are that’s not the case, but even if it is, the question you should be asking is if that is actually a good use of your team’s time?

Those building their own data import tools need to be concerned about the following:

Seamless and fast tools: Customers want it to be easy — they won’t understand data requirements and don’t want to waste time formatting spreadsheets to meet specs.
Simple directions: From simple instructions to in-depth tutorials, the documentation to help customers use your internal data import tool is as important as the tool itself, with your primary goal being that customers will pay attention and grasp your instructions on their first try.
Self-service: Customers want to import their data without having to reach out to your support team and wait to hear back.
Automation: 26% of survey respondents said they wanted more automation, reducing human error and their workload during the onboarding process.

There are also a lot of nuanced features to consider - your importer needs parsing, structuring, validation, transformation, and data mapping capabilities at minimum. It’s a lot to ask.

That’s why, for most, the preferred option is to use a purpose-built data importer solution like Flatfile so your team can stay focused on its mission critical tasks. These days, buying a software tool from a company with domain expertise is common practice for companies (most companies selling things default to using a payment processor like Stripe, for example, to accept payments, rather than building a payment processor in-house). From large enterprises like CBRE to tech companies like Square, most would rather empower their teams with a proven data importer like Flatfile’s than distract with a complicated side project [that’s seemingly never actually done] for their already busy engineers.

Data onboarding tools like Flatfile are built to intuitively organize and implement your customer’s jumbled data import. They remove the most common and frustrating errors and roadblocks customers experience when trying to self-serve — like vague ERROR - ! wrong encoding ! messages, incorrect column matching issues, and a spinner that never completes due to maxed-out browser memory limits.

With any software tool, the Build vs Buy decision is one you want to dissect thoroughly. But many businesses find that the benefits of using a proven third-party solution far outweigh any benefits of building. The amount of engineering, product, and marketing resources that are required for building an in-house tool that can do all of this is a prohibitive cost that is not usually worth the effort, no matter how easy it seems during planning.

The most important thing is that you recognize now that onboarding is an important part of your customer retention strategy, including everything from customer handoff to the data onboarding experience. There are tools available to help you do this efficiently and without undue cost and complication, and the more successfully you onboard, the less churn you’re likely to see.

All this time you were worried about your leaky bucket, but while you were only paying attention to the hole at the bottom, you missed the water splashing out of the top.

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