Customer onboarding

What is customer onboarding?

Customer onboarding is the process of helping customers start using a new product or a service successfully, which can be digital, physical, or both. This is the welcome process that shapes up a customer’s interaction with a brand, laying foundation for a long-term relationship. An example for customer onboarding would be a fintech application with the following customer workflow. 

User signup -> profile setup -> identity verification -> terms & conditions agreement -> product tour -> personalized product recommendations  

For example, the retail brand Sephora onboards customers and shares product recommendations, quizzes on skin types and concerns, and give a peek into loyalty programs.  Customer onboarding applies to most industries: finance & fintech, SaaS, eCommerce, retail, banking, healthtech, real estate, and more. 

Steps in customer onboarding

There are typically 4 to 5 steps in customer onboarding including registration, introduction, data collection, training, and feedback. The steps may vary depending on the product & functions. Components of customer onboarding explained in detail below:  

Initial sign-up & registration: This includes the customer signing up with his email, phone number, or SSO, providing basic contact details & name to the company. 

Introduction: Once customer signs up, he sees a personalized welcome to the product addressed with his name & explaining what they are in for – the product benefit & its special features.  

Profile setup & data collection: Next, the customer provides more information to tailor the content and options for them. This includes their requirements, other profile information (age, education, job, etc.) 

Training & support: Customers get options to see the product tour recorded videos, FAQs, and other tutorials.  

Feedback: Requesting customers to rate the app or share feedback about the product and customer onboarding experience. 

Follow-ups: Sending notifications and follow-up messages to users to bring them back to the product and continue from where they left off. 

Milestones: A successful onboarding requires a celebratory message to show customers they are a part of the product now.  

Why effective customer onboarding is required?

Companies should pay attention on effective customer onboarding because it directly impacts customer retention, lifetime value, and business growth. Other benefits of AI-assisted customer onboarding include high customer engagement, enhanced security and fraud prevention, and fewer manual workflows. Here are the reasons why it’s important. 

Faster adoption: With minimal or zero interaction with people, customers get to know about the product, offering clear guidance on product value and minimizing churn. 

Customer experience: Current day customers expect more personalized experience from brands and products to feel connected to it. Effective customer onboarding can be the first step towards this personalized connection. 

Reduces customer retention: 96% of customers leave due to poor customer service and experience; a good customer onboarding can reduce this impact, offering customers what they want in one place. 

Opens door for upselling & cross-selling: Customers get to interact with the product, exploring other options and ranges available, which helps the company to sell more, allowing customers to look for what they want without being salesy. 

Can collect insights and data into preferences: Not only the users explore the product on their own, but they also share their preferences and wants through quizzes and other gamified communication. 

AI to enhance the customer onboarding For fast and smooth customer onboarding, AI-based technologies are critical. Here is how AI plays a role in customer onboarding. 

Automated assistance and personalized chat-bots: Remember the owl from Duolingo? the H&M chatbot offering product suggestions? Maya, insurance AI chatbot from Lemonade? These are some amazing AI-powered chatbots that ease the customer onboarding, guiding customers throughout. Pros of having a chatbot for customer onboarding? Available 24/7. Keeps customers engaged. And collects data in seconds.  

Automated document processing: For industries like banking and insurance, getting uploaded documents verified takes a few business days. Automated document validation brings it down to minutes, parsing & verifying content, minimizing human effort. 

Behavior analysis: Tracking customer engagement, AI could share tailored content & option to users to maximize the time spent and spending. 

Fraud detection: Many companies could benefit from AI fraud detection, looking for suspicious behaviors to prevent fraudsters from onboarding. AI-based fraud detection is fast, accurate, and when combined with manual workflows, becomes super effective in preventing fraud and folly. 

AI’s role in KYC verification and onboarding

AI also helps speeding up Know-your-customer process in banking, finance, and insurance industries. Following is some AI use cases exclusive for KYC validation process. 

Biometric verification: whether it’s facial verification or any other biometric data collection, AI could be used to verify if the person’s identity is genuine.  

Identity verification: AI-based systems can not only read and analyze identity documents, applications like OCR can also extract and fill content from one document into another, no need for typing anymore. 

Risk assessment: Upon collecting and analyzing customers’ past behaviors, spending patterns, and other economic factors, AI could assess risk and flag any suspicious activity. It could also help the company stay in line with AML, CFT, and other regulatory requirements. 

To sum up, customer onboarding shouldn’t be like another task for customers; rather become more inviting and engaging. Hence, companies must incorporate AI-based tools and applications to allow smooth and easy onboarding, without spending effort or labor on it.