No surprises here: We all know that a smooth onboarding experience is critical for both employees and customers. So when you’re looking to build engagement and long-term loyalty, examining onboarding is a smart place to start. Another thing we all know: Smart goals aren’t always easy.

Understanding customer onboarding challenges

The customer experience (CX) is an extended journey consisting of several progressive touchpoints, taking the “travelers” through phases that lead to buying a product or service, hopefully repeatedly. Onboarding is one of these phases, without which the CX lifecycle has no momentum and ends before it begins.

So, it’s in marketers’ interests to anticipate and address customer onboarding challenges with modern, well-thought-out strategies. However, before we get to grips with onboarding threats and stumbling blocks, we must understand what onboarding is and the dynamics that shape it.

What is customer onboarding?

There are many different viewpoints about exactly where onboarding begins and ends.

For example, many companies in competitive markets believe the onboarding ends when the customer makes a first committed purchase or pays for a subscription. Others are not all that forgiving, unconvinced that purchase #1 qualifies the lead as a fully-fledged customer. They want to see an after-sales period through (with no returns) or even a second buy.

No matter where you set the “end of onboarding” mark, all the touchpoints preceding that juncture contribute to its success or failure if the buy never occurs. The goal is to make customers feel comfortable using the product so they continue to use it and become brand ambassadors.

The importance of customer onboarding

Another way to look at customer onboarding challenges is by overviewing the brand engagement stages that define a customer experience:

• Gaining the customer’s Attention.
• Merging (a) above into Interest
• Intensifying interest until it becomes Conviction or Desire.
• Culminating in a sale or Action (the end of onboarding).

Each of the four steps involves a touchpoint configuration, which, in combination, creates the onboarding process (commonly referred to as AIDA). All are brand-selling drivers, but not without onboarding inhibitors (obstacles) that pose significant market challenges.

Customer onboarding challenges

Unless you can develop a seamless and smooth onboarding journey for your customers, the end game (purchases) and the notion of brand ambassadorship will never materialize. To see the three big ones, read on. Here are the customer onboarding challenges we’ll cover

1. Getting to know your customer
2. Segmenting your marketplace
3. Selling the way your segments want to buy

Challenge #1: Getting to know your customer

Consider addressing a wide-open marketplace containing millions of potential customers. Success depends on attracting attention, competing with the most compelling “attention-getters” left, right, and center, most relying on digital connections and internet navigation. People everywhere scan social media, search Google with new questions daily, hop from website to website (or app to app), and navigate brick-and-mortar stores to satisfy needs.

As much as it looks random, systematic forces run through the frenetic activity.

For example:

• Tens of millions of young adults follow the trends and suggestions of Taylor Swift and other celebrities.
• Immigrants, their friends, and family love eating at the same heritage restaurants to participate in and maintain generational cultural ties (e.g., Chinese, Italian, Greek, or other cuisines).
• Entire neighborhoods develop around religious leaders (pastors, rabbis, etc.) attracting residents to buy homes near their selected churches or synagogues. Similar real estate drivers attach to home buyers who want proximity to religion-themed academies, regional shopping malls, and boating lifestyles – only a few examples.
• Lawyers have distinctive dress codes, as do Hells Angels, millennial yuppies, and a thousand other occupational-, membership-, or aspiration-centric groups.

In short, demographics (age, race, education, etc.), aspirational or emotional patterns, big-name influencers, and more guide our behavior. This is fantastic for savvy marketers. Why? Segmentation converges significant numbers of people into behaving similarly, motivated by the same dynamics. Get it right with a few on a sample test basis, and you can scale it up to massive sales.

So, if you want a fair shot at drawing attention to your brand (the A in AIDA), your target customers must see it as enhancing their lifestyle. It all comes together with a crucial message, “You must know your customer.”

Challenge #2: Segmenting your marketplace

Knowing your customer is easier said than done. It involves dividing your target market into subsets that:

• Share demographics, needs, priorities, common interests, pre-dispositions, behavioral influences, and psychographic makeup.
• Represent enough buying power to make the segmentation exercise worthwhile.

For example:

• A cosmetic brand may have product versions for young and older women with different education, marital, influencer, and emotional profiles.
• Burger King appeals to San Diego and Mexico City consumers under the same core brand but with significantly different menus,
• General Motors’ Corvette and GMC options appeal to segments that are poles apart product- and promotion-wise, with entirely different value propositions.

So, how do you segment in modern times? The answer lies in data analytics and AI-powered software that can dissect massive data volumes, highlighting trends, emotions, and thought patterns applicable to targeted audiences. It gets the job done in a fraction of human time by digging into and scanning SM reviews, customer feedback, surveys, KPIs related to promotions, and more.

The algorithms can evaluate data banks of quantitative and qualitative information that tell you how your customers want to buy, which can be substantially different from how you prefer to sell. They even have rating scales that interpret the results seamlessly, making them easy for marketers to understand.

I advise deploying the services of a professional data scientist to ensure that you don’t fall into the trap of “garbage in, garbage out.” Your data must be relevant, representative of viable segments, not outdated, and accurate. Analytic software innovations available in 2024 assist these objectives.

How? They automatically detect incomplete data fields, repeated items, and out-of-place pieces that, if ignored, can distort results. In short, data analytics is a business strategy (in itself) that will create an extraordinary competitive edge for your business by onboarding customers more successfully (if done right).

Challenge #3: Selling to segments the way they want to buy

Rising to onboarding challenges #1 and #2 above makes this one much easier to achieve. Still, as strange as it sounds, stakeholders frequently revert to old habits that fit their style of marketing better, ignoring what the data is showing them. You can’t afford to do that; stay with the onboarding system recommended here and trust it.

The next onboarding task is to land leads on your mainstream platforms. Customer behavior analysis is a crucial part of your strategy. Consider the following statistics about driving influences on customers searching for resolutions to their pain points:

• • 81% of retail shoppers rely on online research to guide their shopping.
  • In 2023, US retailers spent over $50 billion on digitally-driven social media ads – double the value recorded in 2022.
  • Consumers massively supported e-commerce channels, spending $36 billion in 2023, a jump of 20% from 2022.
  • Mobile devices enrich your customers’ shopping experience from A to Z. For example:
    • 77% of consumers depend on them to research and guide them to viable outlets (brick-and-mortar and online).
    • 59% of shoppers use their omnichannel-connected devices when shopping in malls and in-store locations, comparing costs and researching deals for discounts and coupons while on the go.
    • 73% of retail consumers shop across multiple channels, meaning uni-channel marketers are rapidly losing traction (Harvard Business Review).
    • Lost revenue connected to omnichannel failure is around 10% – a severe hit on ROI (VendHQ).
    • The average engagement rate of campaigns using three or more channels at 18.96% across all channels was more than three times that of single-channel initiatives (​​Source: Retail Dive)

The takeaway is you must use the audience’s search terms (i.e., keywords your data research shows as relevant) to rank highly on customer searches. Aligned with this, you want to:

• Pop up with pay-per-click (PPC) ads on customer searches using keywords so they can connect your brand to their pain points.
• Send out targeted emails with catchy subject lines.
• Place QR codes in strategic offshore locations.
• Do everything you can to connect customers to your value proposition communicated on your website, app, and SM pages. Unless they land there, your onboarding program is dead in the water.

Get your content and messaging right

The stream of leads visiting your website and SM platforms may be between attention and interest, so your headline must cross them firmly into the latter and move on from there. The closer you can get to personalizing your communications, the better.

Why?

One of the most daunting customer onboarding challenges is delivering what modern buyers expect, along with the ability to get answers to most questions during one visit to your platform. Long delays between asking and getting a reply are a massive turnoff.

How do I know this? Consider the following customer metrics derived from reputable statistical resources

• 48% choose live chat as their preferred contact point.
• 55% rated messaging apps as second to none for brand impact.
• 72% bounce if they don’t get a satisfactory response within 5 minutes of making contact.
• 69% agree that AI-automated chatbots stand head and shoulders above the rest for quick answers when required.
• 70% (of millennials) favor a company that uses chat versus email.

So, what does this tell you? Traditional sales funnels (i.e., lead-capture forms, emails, and other one-way communication methods) will not give you a competitive advantage. Why? Conversational marketing’s two-way, real-time, virtual theme—a contemporary approach—fits the described characteristics perfectly.

How can you do this? Using automation and AI to generate intelligent replies and, from there, create conviction and a final sale. Other methods customers love for filling gaps are YouTube videos and podcasts.

How to measure onboarding success

Key performance indicators (KPIs) provide deep insights into whether or not you’re conquering onboarding challenges. I recommend measuring the following annually or six monthly to review reaction to your onboarding strategies:

• Customer churn.
• Recruitment growth to loyalty programs.
• Revenue and ROI changes.
• Lead generation movements.
• Conversion rates.
• Website bounce rates.
• Engagement with chatbots.
• Qualitative feedback from surveys, including NPS, CSAT, and social media reviews.

Conclusion

This article presents the three primary obstacles to a smooth customer onboarding experience and how to address them for improved customer loyalty and retention. It connects to the modern customer demands for brand differentiation via personalization that results in ROI upliftment and competitiveness.

Sogolytics is at the cutting edge of resolving all your onboarding issues, including customer acquisition challenges, remote onboarding challenges, and employee onboarding challenges in the workplace.

Looking for support in minimizing customer churn and boosting retention? Learn how Sogolytics can help!

Frequently Asked Questions

Q1: What is the biggest challenge in onboarding?
A: Knowing your customer.

Q2: How can organizations overcome customer onboarding challenges?
A: Follow the recommended three-step program outlined in this article.

Q3: What is a poor onboarding process?
A: One built around selling to customers the way the company prefers to versus how customers want to buy.

Q4: What are the specific challenges of remote onboarding?
A: (1) Getting to know your customer, (2) Segmenting your market, and (3) Selling to your market segments the way they want to buy.

Q5: How does customer onboarding differ from employee onboarding?
A. Employee onboarding exists in-office or remotely. Customer onboarding is a marketplace overview.