What is onboarding?
Onboarding, or customer onboarding, is the process of turning new customers (i.e. businesses that have purchased only once from you) into customers who order from you regularly (i.e. not just a one off purchase, but come back to buy from you frequently).
Why is it important?
Most revenue is generated by existing customers
The key to successfully growing a profitable Wholesale, Distributor or Manufacturing business is not just to attract new customers and get them to place their (first) order with you, but to then successfully onboard them into becoming a regular, repeat customer. For example, as a Wholesaler selling coffee beans to coffee shops, the sale of x1 kilo bag of coffee beans likely won’t be profitable. In fact, they may be selling it at cost, or even at a loss.
Keeping customers for longer lowers acquisition costs and increases revenue
New customers have found your product and have made a purchase, but to ensure a long-term, profitable B2B relationship, you must successfully onboard them so they don't leave you for a competitor. In other words, customers who buy from you regularly are much less likely to churn. A successful onboarding process will enable your business to increase customer lifetime value (LTV) too.
Loyal/Champion customers become your advocates
Encouraging customers to repeat purchase provides more opportunities for you to turn them into happy customers - and happy customers are your advocates (also referred to as "Champions" in your Prospect CRM RFM Analysis). Asking these customers for reviews and referrals is key in attracting and onboarding more customers like them (customers who fit your ICP).
When is a customer "onboarded"?
We analysed a typical Prospect CRM customer’s business and the way in which their customers order from them. We know that the average time between the first and second order 30 days, with a relatively wide standard deviation of up to 52 days. This declines fairly rapidly over the first five orders, with the average falling quickly and the standard deviation reducing too. This shows that this business’ customers don’t become a “settled, regular customer” until they’ve placed at least four to five orders.
Once a customer has placed four to five orders, it becomes much more likely that they will place another order soon (within 14 days in this example) and then settle into a weekly or bi-weekly purchasing pattern. However, up to this point, they may not order again for a month or even two, or indeed never, unless those first four orders are secured as a minimum.
How can I get my customers onboarded?
Missing Orders Report
With Prospect’s A.I. Growth Engine, you're presented with a real-time list of customers you're missing orders from. Sales teams are armed with critical information, like expected order values, enabling them to quickly win business and retain customers for longer!