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Customer onboarding: Could new practices produce programme success?

5th Oct 2009
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Customer onboarding programmes have delivered mixed results in the past. But developments in IT, and improved practices, could change this.

Whilst a relatively popular programme amongst the likes of banks, phone and cable companies, customer onboarding has gained a reputation as a problematic project in some quarters.

The process of introducing new customers to your business in an organised and effective manner, it generally commences at the time of order placement, perhaps continuing for up to three months depending on the complexity of the product or service.

Its appeal is understandable, with anecdotal evidence indicating that customers who are effectively onboarding having higher retention rates, lower cost to serve and higher cross-sell rates than customers who are not. But with organisations reporting mixed results, customer onboarding programmes have had limited popularity. So what has been holding it back from wider popularity?

One man who knows is Craig Le Clair, a principal analyst at Forrester Research who is a leading expert on information management and enterprise content management (ECM), and who recently authored the paper ‘Best Practices: Customer Onboarding - A Visible Target During Economic Uncertainty’.

Le Clair has identified several challenges that have been commonly reported by businesses deploying customer onboarding programmes. One of these has been the explosion in inbound content types that organisations deal with from customers, across multiple channels. Each channel has different supporting technology and business process, across which coordination can prove difficult.

Product idiosyncrasies

Multiple channels is one level of complexity but even denser complexity exists in the cross departmental information silos, and cross legacy platform silos that reside within organisations. The diversity of products, technology and line of business models, for instance, has traditionally presented many issues.

“If you take brokerage as an example, there might be an added brokerage product and a securities oriented brokerage product and there might be a mutual fund type product and so on. Each of those has a different legacy system that is keeping the books and records for that product,” says Le Clair. “And so those legacy systems have very specific needs around the data that is entered to them. It is a challenge to organise a new process that moves away from the product idiosyncrasies of those platforms to one that is not product-centric but has a client-centric approach.”

And a further hurdle has existed in terms of the need to collect the appropriate customer information while still maintaining the customer experience – something that many organisations have failed to clear. Most people can relate stories of how they have been inundated with offers shortly after joining a new bank, as every product line manager in the organisation has rushed to bombard the best new customers with offers.

“There has been a fundamental problem in the way it has been approached,” continues Le Clair. “It was largely used to take costs out of the system but the more forward-thinking organisations are realising that customer experience around onboarding is something that will be a predictor of the length of that customer relationship. You can create a negative impression early on that will directly affect your ability to sell more and retain the customer.”

In light of these problems, Le Clair has drawn up a series of best practices to help businesses drive success from their onboarding efforts. From his experience of studying onboarding programmes, the most successful ones have often been guided by a business process management centre of excellence or one of the performance management committees, such as six sigma. The key to this is the cross-departmental and cross-produce review process, which has provided a good model.

A day in the sun

Other best practices include ensuring that onboarding is a client-centric process – collecting information at the customer level first, independent of a specific product, and creating a client profile for new customers. This information can be used to populate the product-specific form. “Customer interaction data is very important and you want to integrate that experience and the metadata from that experience with other programmes and campaigns,” says Le Clair.

Enterprise content management (ECM) is also recommended to improve transaction management – ECM capabilities are rapidly improving and can work with traditional imaging technologies to take paper out of the process and streamline the cross-functional onboarding process. A move to distributed capture is similarly advised, as document capture is central to the best customer onboarding programmes, as is the use of e-signatures to streamline the process, save costs and improve transaction security by getting paper out of the process.

“The technologies for supporting onboarding makes it more feasible now to attack the challenges in more of a cross-product and cross-channel way than before,” says Le Clair. “The use of distributed office assets like multi-function peripheral devices for scanning, means that a lot of the onboarding documents can be captured in the branches of financial services rather than in the production environment. And then there’s the workflow tools and the electronic signature acceptance – they’re all coming together.”

Perhaps in light of these developments, customer onboarding programmes have recently witnessed something of a resurgence in attention. Le Clair agrees that it is receiving lip service once more, but believes it is the result of a combination of factors.

“There is an increase in interest in the area – largely because they haven’t got it right yet!” he says. “The other factor is that in this economic environment companies may not have given up on attracting new customers but they are certainly very focused on retaining the ones they have.”

With maturing technologies and a growing awareness of the importance of customer retention, customer onboarding may yet have its day in the sun and gain wider acceptance outside of the financial and telecommunications fields. And by following the best practices that have emerged from years of experience, organisations may be able to avoid the mistakes of the past.

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