Tag Archives: OEM

Go-to-Market (GTM) Strategies – Customer Onboarding

Posted on by

#customeronboarding #gtm 

In this blog post, we will discuss the importance of customer onboarding.

We will especially talk about how it can negatively impact customer experience to the extent of losing a customer.

A recent story comes to mind when I was filling a Free Application for Federal Student Aid (FAFSA) form for my daughter’s recent college acceptance. The government form was so complex and I ran into issues at every stage including creating user id, setting up 2 factor authentication, getting Internal Revenue Service (IRS) returns and everything else. The process also involves waiting 2-3 days for them to confirm my details with IRS. It has been 5 days and I am yet to receive the confirmation that my account has been approved for next steps by FAFSA at the time of this blog post.

The above process certainly frustrated me. I felt like running away, if there were any other options available. Sadly, there are not any options for FAFSA.

But in reality consumers have many options for everything in their daily life. Does a company really want to lose customers because of their onboarding process ? 

Losing customers at onboarding is like customers walking away before entering your store. You lose a lot more as you don’t get to learn about them – their behaviors, their habits, their buying power, their preferences.

There are many reasons why customer onboarding may not be the best. This includes things like:

  1. Complex processes – when several backend organization involved, onboarding often gets slower
  2. Lengthy wait time – delays in account activation can prevent access to underlying services
  3. Lack of training – Not having proper training or documentation can create confusion
  4. Inadequate support – Customers can feel neglected due to this during onboarding
  5. Regulatory – Asking for Physically identifiable information (PII) can deter customers

These are just a few reasons, why onboarding becomes slower and painful.

Here are some characteristics of a great onboarding process:

  1. User centric – A great onboarding process is highly user centric teaching them what they need to know to get started
  2. Action-oriented – The best onboarding processes focus on minimizing the actions to enable users to complete onboarding tasks quickly
  3. Informed – A great experience during onboarding should focus on providing immediate value of the underlying product/service at the earliest
  4. Constantly evolving – It is critical to monitor and keep tweaking the onboarding processes to continuously enhance it
  5. Holistic – A great onboarding process does not just get the clients onboarded but also prepares them for experiences beyond

Think of a measuring customer onboarding time and track it for improvement. It can be used as a competitive differentiation. Do a before/after video and use it for marketing. Use analytics to go deeper where customers spend more time than needed. Identify and fix those gaps.


Lastly, go through the onboarding process yourself on behalf of the customer. If you are not happy, your customer will not be happy either. Tweak the process until you are fully satisfied.

See an example of how one company simulates this process for their sellers here : https://help.gumroad.com/article/62-testing-a-purchase . Here is the reason why they created that feature – “to see what your customers will experience when they buy from you. This is great for understanding your customers’ experience and will help you hone in on areas that perhaps need a little tweaking.”

Businesses are moving in the direction to provide better customer onboarding experience. It is high time, we do that with our products/services as well, or else we will be left behind.

If you are not currently subscribed and want to receive GTM tips, please sign up here : https://productmanagementclub.com/newsletter/ 

To OEM or not, that is the question

Posted on by

Rick was the CEO of a startup. His company had a very promising product. He was selling to enterprises (B2B product) for which he needed every helping hand he could get. In November of 2015, he got an opportunity to be an OEM (Original Equipment Manufacturer) for a much larger company (Company A). He was very excited at the prospect. After all, this prospect would bring him additional 40,000 sales people from the new company, and had all the global customers he would not have been able to reach on his own.

 

But this also meant ensuing troubles that cost him a lot of time/money/resources. Was it worth it, you may ask ? Troubles started right on Day 1:

  1. Building a business case : It took  him several meetings and a few months of scheduling/re-scheduling to accommodate calendars of the people (Product Managers, Directors) at company A. Once they approved of the product, a business case needed to be built for General Manager and other executives of company A. Not only he had to submit the technical/marketing collateral to build such a case but had to support the entire team by answering questions around business, market, customers, legal, technical support, competition whenever he was asked for it. A lot of work as a pre-requisite to the actual OEM !
  2. Margins, Profits, and SKUs: He had to compromise at a 70-30 share. Of any deal Company A would keep 70% and he would get only 30% of the deal. Still, a good deal, he thought. But when he worked out the numbers, he would not make much unless they did around 8 deals (with some combination of small, medium and large-sized deals) per year together. Company A had a 2-month long SKU creation process. That means, he had to wait for 2-months just for his product was available in the ordering catalog of company A. Not a big deal he thought, as he was planning to use this time to get some deals.
  3. Selling, selling and selling: Over the next few months, many prospects came. Whenever they came, Rick’s team was asked to chip in for every meeting explaining the product, traveling to customers’ site for joint presentations, filling in RFPs/RFQs, submit new collateral as needed, develop additional use cases and related collateral. The demands from company A were endless. The prospects stood tall and were progressing step-by-step in the sales funnel, but none of them converted for months.
  4. And a win after all! : Finally after 18 months of the processes and selling spiral, he got a win. The winning deal had his product with another company’s product, product revenues split 50-50 between them and Rick ended with a mere $1.2 million for the deal.

By this time he had 70% of his team working for this company, he had lost focus on other customers, his sales people had churned out, he had almost run out of money, most of his development and support staff was supporting the only customer that came from Company A. It was also harder to pull out of this deal due to the legal complexities.

Would Rick have done better on his own, without going in as OEM ?

What are your thoughts ?