Customer churn is a common issue for businesses across different industries. Acquiring new customers is significantly more expensive than retaining existing ones. On top of that, 65% of a company’s business comes from existing customers. Hence, businesses need to focus on ways to reduce churn rates.
The first line of defense against high churn rates is a strong client onboarding process. Customers are more likely to churn in the early stages of the business relationship. As a result, starting off on the right foot with a new client is crucial.
This article will teach you everything there is to know about customer onboarding, including how you can improve the onboarding journey.
What is customer onboarding?
Customer onboarding is the process of welcoming new customers to your business. It includes everything from verifying the identity of your new customers to organizing training sessions and providing video tutorials.
An excellent onboarding experience provides real value to customers and makes them stick around. Therefore, businesses need to make sure their customer onboarding workflow is flawless.
The importance of customer onboarding
Properly onboarding new customers can positively impact your business in a number of ways:
Lowers churn rate
As mentioned before, customers are more likely to churn in the beginning of the business relationship. A great way to convince them that they're making the right decision is to provide them with a good onboarding process. This demonstrates value from the get-go and removes doubt and uncertainty.
Establishes clear expectations
The client onboarding process provides businesses with a great opportunity to find out exactly what the customer expects from the business relationship. In turn, the client gets a clearer picture of what the business can deliver. This ensures that the business and its customer are on the same page from the start.
Creates better relationships
Customer onboarding plays a key role in delivering an excellent customer experience. This, in turn, results in stronger customer relationships.
Happy customers are a major driver of business growth. They are more open to upsells and cross-sells and can help you acquire new customers through referrals.
Properly onboarded clients can positively impact your bottom line. Hence, you should definitely consider implementing a customer onboarding program.
Digital customer onboarding is the future
In this day and age, digital experiences are the new battleground for businesses across all industries. Digital darwinism is a wake-up call that going digital isn’t just desirable anymore - it’s necessary.
Digital customer onboarding involves the use of digital tools to optimize and automate the onboarding process.
What are the benefits of digital customer onboarding?
A traditional onboarding process consists of many time-consuming steps. On top of that, there are many other challenges associated with it such as security and privacy concerns.
Let’s take a look at identity verification. Financial institutions, auditors and accountants, real estate agents, and many others are required by law to verify the identity of their customers. This is a crucial part of the onboarding process in order to meet KYC and AML regulations and prevent fraud. To verify the customers’ identity, companies need to request a copy of their identity documents. This could be a passport, national ID, driver’s license, or social security card.
Ensures both AML and GDPR compliance
Ensuring the compliance of this process is the first big challenge associated with traditional onboarding. Sending and receiving confidential documents over insecure communication channels such email is very risky. Due to the lack of encryption and low level of security, the documents could easily fall into the wrong hands.
The second biggest challenge is storing the documents. Security and GDPR-compliance are essential when it comes to this step.
Digital customer onboarding tools represent a secure channel for sending and receiving documents and customer data. Most digital solutions use end-to-end encryption to ensure that only the sender and the intended receiver can access the data.
Furthermore, digital onboarding software also ensures that your customers’ data is stored, handled, and disposed of according to GDPR requirements.
Increases efficiency and reduces human error
Paper-based document management can be quite expensive and time-consuming. Not to mention it requires a lot of storage space.
On top of that, the entire process is manual - and humans are prone to error.
Digital solutions help you fully automate client onboarding. Cutting down time spent on paperwork and manual processes can save your company a lot of money. Moreover, you won’t have to worry about documents getting lost or mishandled anymore.
Makes the process more convenient for customers
A lengthy onboarding process can seriously hurt customer experience.
Today’s consumers expect convenience above all else. Printing, scanning, and manually signing documents have no place in today’s digital world. Clients want to manage all their document transactions online from the comfort of their home. Furthermore, documents need to be available on all devices - from smartphones to laptops.
Data privacy is also crucial for today’s customers. They want to make sure their personal data is safely stored and managed. If customers think their data is not safe with your company, they will not hesitate to switch to a competitor.
Digital customer onboarding represents a simple solution to all these concerns. It provides the customer with a simple and convenient way to verify their identity directly from their smartphone.
All they need to do is upload the documents, fill in their information, and click a button to send it back to you. It’s that simple!
How do you onboard new clients with Penneo?
Penneo KYC & AML Compliance is a digital onboarding software that allows you to verify the identity of your customers in 7 simple steps.
1. Look up your client in the system database
Type the name of the company or person that you are doing business with. The lookup function will search business registers for a match. Click on the result and get instant access to the company’s information such as VAT number and beneficial owners.
2. Conduct the risk assessment
Once done, you conduct the risk assessment in the system based on the information presented in the risk assessment pane. Our system automatically checks for matches against PEP and major sanctions lists.
3. Prepare and send the KYC verification request
The second step is to select the documents and information you need from the customer. You can easily send the request with just the touch of a button. All you have to do now is relax - our system will guide your customer through the process.
4. The customer uploads the documents
Your customer receives the request and can easily take pictures of the documents with his smartphone and upload them to the platform. They can also fill any other required information and then send it back to you via the app.
5. Approve or decline the received documents
When you receive the documents and information back from the customer, you can choose to accept or reject them. If you approve them, the client is onboarded.
6. Manage the risk assessment
You can easily access, review and update the risk assessment in the platform.
7. Securely store customer data
Your customer data is securely stored online in compliance with GDPR requirements. You can easily access and monitor the documents as needed.
As soon as your client’s identity has been verified, you can resume with the rest of the onboarding process.
Organize a virtual client kickoff meeting.
Provide client onboarding materials such as video tutorials, case studies, and practical information about your business. You can also send your customer a gift in the form of a stainless steel water bottle or a tote bag.
Organize an online onboarding workshop or webinar to guide customers through the functionalities of your product. This ensures a smoother implementation in the case of larger companies that require customized, more complex features.
Check up on your customer to make sure they are happy with your product and service.
To wrap it up, digital customer onboarding provides a high level of security and complies with AML and GDPR requirements. On top of that, it offers a good return on investment, lowers business expenses, and positively impacts customer satisfaction.