Customer Loss during Onboarding

By Sean McDade

Onboarding is the most common customer experience breakpoint in banking.

A recent PeopleMetrics analysis of retail banks and credit unions looked at aggregated customer feedback data to uncover the keys to improving the banking customer experience.

One of the most actionable takeaways from this analysis is that the most common customer experience breakpoints occur during early parts of the customer journey. Of customers who reported an issue, 17% of them were in their first year as a customer.


Not surprisingly, this high-problem experience is paired with high attrition. Customers are nearly three times more likely to churn during the first 90 days of opening an account. Your newest customers are the most unhappy and the most at risk.

What is customer onboarding?

The answer to slowing new customer churn is in creating a better onboarding experience. According to PWC, banking customer onboarding “starts when a prospect engages with your financial institution at a branch, through a call center, or online.” They add, “Onboarding is also not a one-time event; it happens each time a customer gets an additional product or service.”


How to improve onboarding and create better banking customer experiences.

This is by no means a comprehensive list of how to improve the onboarding experience for your customers, but it will give you a starting point on how to approach this work.

1. Take a walk in your customer’s shoes.

A friend of mine, who works with a major national bank, told me about a recent chat with a well-meaning coworker. The coworker ranted about the team needing to better understand their customer onboarding process. They needed data and focus groups; they needed to get in the weeds to make this experience better.

My friend asked, “Have you ever gone through the onboarding process yourself?”

“No,” came the reply.


An easy first step to improving the onboarding experience is to go through the process yourself. It’s likely that over the years, you’ve added new steps, checkboxes, and emails to the once-simple process. You may find each department unintentionally added layers of complexity to the process. Going through the process yourself will help you uncover some immediate improvement opportunities.

Never underestimate the power of empathy when it comes to designing a better experience.

2. Make it easy.

The one thing that will likely be hardest for you to empathize with is the difficulty of learning a new interface. You’re probably familiar with your own information architecture, but your new customers aren’t. In fact, “ease of use” is the most common area where new customers get stuck, with 24% of them reporting problems in this area.


“Time as customer” then becomes an incredibly valuable way to segment. If you’re currently looking to understand how customers are using your online interface, and you’re looking at customer behavior in aggregate, then you’re missing a big opportunity. All customers will eventually learn how to navigate your site, even if the user experience is poor. But your newest customers can provide valuable insight on where difficulties exist.

3. Make it enjoyable.

In our 2013 banking study, we found that the biggest driver of a great customer experience was that the experience was enjoyable.


Customers described enjoyable experiences as those that leave them feeling secure, confident, cared for, appreciated, and valued. A great example of how to create this emotional bond with customers comes from Simple. As part of their referral program, both referrer and new customer receive a handmade leather wallet during the onboarding process. A nice touch to make new customers feel valued and appreciated on day one.


4. Consider how preferences change by customer segments.

Customer demographics and psychographics should also play a role in how you onboard them. For example, one thing we found in our newer study was that what customers want to learn more about changes over time.


If you’re onboarding an older customer, keep in mind that they’re going to be thinking more about wealth protection as it relates to identify and accounts. Younger customers, however, are going to be much more interested in learning about saving and controlling spending. These types of insights should play a role in how you design your onboarding process.

5. Keep learning about how to improve customer onboarding.

While your own customer data is always the best place to start, there are other great resources out there to help you tackle this problem:

Good onboarding is your first line of defense against churn.

Remember that stat from the beginning? Customers are nearly 3 times more likely to churn during in the first 90 days after opening an account. Getting onboarding right is your first line of defense against churn and your first building block in customer loyalty. As we head into the last half of 2016, make sure that onboarding is on your customer experience improvements to-do list.

Sean McDade is the CEO and founder of PeopleMetrics, a customer experience management (CEM) company focused on finding actionable insights from customer feedback. Email: [email protected]. Twitter. LinkedIn.