By Donna Weber, author of Onboarding Matters: How Successful Companies Transform New Customers Into Loyal Champions
Do you charge for customer onboarding? If not, you better reconsider. If you do, make sure you are delivering the “complete offer.” When you don’t charge for customer onboarding everyone suffers. Customers don’t show up for meetings. Your teams don’t have the resources they need to deliver a great experience and drive customers to value. That’s why it’s time to charge for customer onboarding and implementation services. Customers who pay for onboarding are more accountable and partner with the onboarding teams from day one. I recommend you bundle all the best practices, tools, and services customers want and need into premium onboarding packages or “happy meals.” “Happy meals” are the path to guaranteeing both your and your customer’s success.
There’s no such thing as a free lunch
Before Customer Success became commonplace, companies usually ran service organizations as profit-and-loss businesses with high margins. Now that the focus is on the ultimate indicator of net revenue retention (NRR), many companies offer customer onboarding and enablement at no cost.
The 2020 Customer Onboarding Report shows that 70% of companies do not charge for customer onboarding, see below. As a result, all these companies and their customers miss the benefits of charging for onboarding. A complimentary offering, as much as it helps your customers, does not mean it’s free to build, deliver, and maintain. Even in customer onboarding, there’s no such thing as a “free-lunch.”
The challenge with giving away valuable onboarding services is that your team is regarded as a cost center from a business perspective, even when your efforts increase the success of customers down the road.
Your company suffers in these ways when onboarding services are given away for free:
- It’s a battle to get customers to show up for onboarding, implementation, and enablement meetings
- You are stuck firefighting while glaring at the growing backlog
- You are unable to deliver the best-in-class services customers need to reach their outcomes
- You get by on limited resources, even when other teams are hiring
- Ultimately, you and your team are at risk of being cut
There’s a cost on the customer side as well. Of course, customers say they want to pay as little as possible for your product and your services. However, when they don’t pay, they don’t show up for scheduled meetings, they don’t move forward on their parts of implementation plans, user adoption is low, and they don’t get much value from your product.
Customers pay for great experiences
Despite the assumption that customers don’t want to pay for onboarding, research by PWC finds that a good customer experience means your customers will spend more. In fact, 86% of buyers are willing to pay more for a great customer experience. The more expensive the item, the more they are willing to pay. It seems customers are more committed to reaching the agreed-upon milestones and deliverables when they pay for your services. They are also more likely to work with you, not against you, on the journey.
When customers hand over their valuable funds, they have more skin in the game. Companies that charge for onboarding consistently share with me their customers are more accountable, and that those customers appreciate being held accountable. Customers show up for meetings, partner during the implementation, and complete their required tasks. One company I work with even finds customers use the product more when they pay for onboarding.
Gainsight summed it up well in a webinar when they shared, “In SaaS, where the product is developed and distributed as a service, services are developed and packaged as a product.” You turn onboarding services into desirable products that customers want to purchase, and then you charge for them. Plus, the renewable income helps your company’s executives and finance team value the hard work your onboarding and implementation teams are up to which will help you out too.
Serve “happy meals”
Rather than hoping customers buy the services they need to be successful, package everything they need to reach their goals quickly and easily. Create “happy meals.” The Technology Services Industry Association (TSIA) calls this the ‘complete offer,’ because selling software to customers is no longer enough for customers to be successful. As a result, TSIA encourages companies to include the services customers need, not as an add-on, but as part of the package.
One company I know got out of the “free lunch” business. They defined and now deliver a methodology of best practices and proactive offerings that renew every year. They compare their new offerings to “value meals” with the right services included to drive adoption. Onboarding and implementation services are included in the first year, and then performance tuning and health checks are provided in the following years. Customer Success services and training are included throughout the customer journey and at different levels depending on the package tier purchased.
Charging for customer onboarding services has an important impact on both you and your customers. Look at the benefits:
- Customers are accountable, engaged, and more satisfied
- Renewal rates are higher
- You differentiate your offerings from your competition
- You scale your customer onboarding organization more easily
- You reduce backlogs
- You hire the resources your team needs to meet the growing demands of customers
- Sales reps understand the value of customer onboarding and are excited to partner with you and your team
As you know, onboarding isn’t necessarily one-and-done as soon as your product goes live. That’s why I recommend you turn onboarding packages into subscriptions that renew every year and continue to engage new and existing users. See suggestions below.
“Happy meals” make everyone happier
While the benefits of charging for customer onboarding may seem to be too good to be true, everyone is happier when customers pay for great experiences. Customers gain more value from your solution. Your organization brings in more revenue and your company appreciates the customer onboarding team and the impact on customers and the company. Plus, when you deliver “happy meals” your onboarding team stays sane and satisfied because they have what they need to be successful.
DONNA WEBER is the world’s leading expert in customer onboarding. For more than two decades, she’s helped high-growth startups and established enterprises create customers for life. Her award-winning book is Onboarding Matters: How Successful Companies Transform New Customers Into Loyal Champions. Learn more at donnaweber.com.