Last Updated: December 7th, 2023

Customer Onboarding: 5 Reasons for Why It So Important?

What is Customer Onboarding?

In a time when markets are saturated with dozens of companies fighting for patronage from the same target audience, building relationships is more important than ever before. Nothing guarantees customers will return to your establishment or online shop like having some meaningful engagement with them.

Customer onboarding is a process that involves activities used to introduce customers to your business, service, or product. The process shows new customers how to get the most out of your offering.

Onboarding also involves listening to what your customers feel is essential and answering their questions. Depending on the industry, it can be 5 to 25 times more expensive, so retaining customers is the most effective marketing practice.

The following insights will demonstrate why onboarding is important to your customer relationships.

Lower the Churn Rate

The “churn rate” is a term that is used to explain the customer turnover rate. This metric pertains to the percentage of customers that will discontinue their relationship with a business in a specific time period.

Depending on the industry and offering, the churn rate can be measured by month, quarter, or year. The rate is normally measured by the year in most industries. Businesses with products priced by the month will use monthly churn rates for their measurements.

Churn rate is a metric that is of particular concern to company executives. This value gives a bird’s eye view of how the company is operating to retain customers.

Looking at churn rates versus retention rates is a way to see the glass as half empty and half full.

Being realistic means looking at your churn and retention rates to ensure that your business is attracting and keeping as many patrons as possible.

More Word of Mouth Promotion

People like to talk about the things they really enjoy, and they also love to talk about things they detest. If you provide stellar—or terrible—service, your customers will speak to others about their experience.

If their experience is typical, mediocre, or less than incredible, they are not likely to share their experience with others.

With onboarding, you give customers an experience that is better than the average. This makes it more likely that they will share this unique experience with their family and friends.

Word-of-mouth promotion is the best type of marketing. People trust the opinions and input of their loved ones. Customers who are enthusiastic about your business will become willing evangelists for your brand.

Improves Customer Relations

The quality of customer service seems to have taken a sad turn for the worst in the past decade or so. In many industries, people no longer expect service with a smile, an honest and believable greeting, or even an earnest show of appreciation.

When onboarding is used, customers are able to feel that they are appreciated and respected.

The world of commerce has become so mechanical that aside from refusing to perform service with a smile, many representatives refuse to show that they care about those who have decided to spend money with the company that employs them. Security and protection are also important to customers today.

KYC Compliance is a verification process that assures responsible onboarding and helps protect the identity of new customers.

Promotes a Good Customer Service Culture

When you have onboarding activities as a part of your training and woven into your business model, this builds the customer service culture of your business.

Suppose you do not establish a culture of good customer service. In that case, you are allowing some workers’ lowered morale to fester until it becomes a subculture among new employees.

When workers see how vital the treatment of customers is to an organization, they understand that wavering from good customer service is unacceptable.

Ensure onboarding and related activities are at the forefront of your business model, and notice that your customer service practices benefit from the change.


The onboarding process is similar to welcoming new customers to the family. Make new patrons feel wanted and appreciated right away. If your company doesn’t engage in onboarding activities, don’t be afraid to tweak your business model to include efforts to engage with clients to improve your retention.

While much of the onboarding process is automated and requires little to no human interaction to complete, this practice helps change the overall culture at your company.

All employees should be skilled at onboarding principles and know how their actions can improve the effectiveness of the process.

Set yourself apart from your competition by strengthening your customer relationships through onboarding. Understanding consumer behavior and setting policies based on it is the key to better customer retention and profits.