Show notes
In this episode, I sit down with Dale Harrison to dive deep into one of the most critical—but often overlooked—aspects of customer success: onboarding.
We all know that a great first impression can make or break a relationship, and it's no different when bringing new customers on board.
Dale shares his expert insights on how a well-crafted onboarding process doesn't just get customers up to speed but actively drives product usage, builds loyalty, and significantly reduces churn.
Whether running a SaaS company or offering a complex service, this conversation will give you actionable strategies to turn first-time users into long-term advocates.
If you want to boost retention, improve customer satisfaction, and nail that all-important first experience, you won’t miss this episode.
This episode was sponsored by LeadFeeder - https://bit.ly/3ySLl4o
From the conversation
Why onboarding sets the terms of the customer relationship
Dale Harrison is an experienced marketer whose perspective is informed by mathematics, statistics and finance. He describes the customer journey as a version of dating. Marketing and sales are the dating profile, onboarding is the early dates, and daily use of the product is living together.
A good profile earns a first date and nothing more. Once a customer is trying to work out how to use the product, Dale says, nothing marketing or sales said before or will say later can repair a bumpy experience. Onboarding decides how much trust the customer extends.
Dale believes a poor onboarding leaves a lasting scar. Later, any stumble with the product gets read as proof the company can't be trusted. A good onboarding gives the company the benefit of the doubt when something breaks.
"You've got one shot at being able to create that initial impression, and that's during that early onboarding phase."
Recording the onboarding experience as a brand new user
Dale described a client that is a SaaS company with a product-led growth model, where a free tier leads to paid tiers. The company had a very high loss rate during onboarding. After sign-up, users landed on a dashboard with no guidance on what to do first, second or third, and there was little video or text help.
Dale signed up as a new account on each of the company's three product lines and recorded himself with voice-over, saying out loud what confused him and what he could not find. He did the same with each major competitor. Some competitors were just as bad, while others did certain things well, so the team could adopt the best of what the category offered.
Dale put the cause down to product blindness inside the company. He argues that an outsider has to walk through the process, since customer success and product teams know too much to teach it well.
"Everybody was so deeply steeped in this product that they looked at it and everything seemed completely obvious and intuitive because they were just so familiar with it and had used it internally for so long."
Building onboarding sequences around customer types
Dale separates two problems that usually appear together. One is flaws in the UX design. The other is a product that is inherently complex and needs guidance even when the design is good. He recommends working out early how much of each is causing trouble. In his client's case, a critical setup option sat in a second-tier menu when it belonged in the top tier.
Customers are not all the same. Dale points to HubSpot, where some people use one subset of features intensely and never touch the other 80%, while others use a different 20%. He says the same is true of Photoshop, where many people get by with a few tasks such as removing a background.
For the client, a short set of questions lets new customers identify which type they are. Each type then gets its own sequence of what to do first, second and third, with written steps and screenshots plus video walkthroughs. That work is still underway. Dale also credits Canva and Figma with taking the most important 5% of what Photoshop does and making it easy, while Adobe's onboarding was a dump of every feature.
"What you need are five different onboarding sequences for the five different categories of customers that each have a major use case."
Why marketing cannot repair a poor onboarding experience
Mark asked what companies can do through communications to stabilize a relationship after an average onboarding. Dale's answer was very little. A bad first date is hard to recover from.
He is critical of customer marketing that keeps telling existing customers how great the product is. If they know the product is poor, he says, the messaging does nothing to change their experience and only damages trust. He calls much of it expensive gaslighting.
Dale is just as skeptical of retargeting ads and email campaigns in the thirty days before renewal. By then, a customer who has decided not to renew will not be talked out of it. The only option that might salvage some of them is giving the product away or cutting the price in half.
Measuring churn with cohorts and usage data
Dale says typical churn reporting is fundamentally broken. A report may show 100 churned accounts out of 10,000 customers, which looks small. If 50 of those 100 joined in the last thirty days, the story is very different. With a large base and 100 new customers a month, even losing all of them would look like a small churn rate.
He recommends tracking a cohort survival rate. For everyone who joined in a given week or month, it shows how long each account lasted and what the survival curve looks like. He also wants a more flexible definition of churn. With annual contracts, the same behavior happens but stays hidden until renewal.
Dale advises instrumenting the software to track engagement at the account level. That means how many available seats are logging in, how many hours they spend and how many tasks they complete. Accounts that gave up on onboarding tend to park the software, and a drop in usage can signal a move to a competitor. He also criticizes net revenue retention for masking what is happening. Revenue per account should be tracked in a separate report, he says, with base logo and revenue churn kept visible.
Early drop-off, customer half-life and choosing better customers
Over 25 years, Dale has seen the same pattern in SaaS and non-SaaS companies. Accounts drop out at a very high rate in the first 30 to 90 days, then reach an inflection point and settle into a stable long-term loss rate. He says both phases follow a Poisson distribution, so customers are lost on a half-life, like radioactive decay. If a company loses half its logos in fourteen months, it loses half of the remainder fourteen months after that.
Focusing on onboarding can rescue early accounts and move them into the long-term base. Once they are there, Dale says, the half-life is very hard to change. He does not trust exit interviews or surveys, since customers often do not tell the truth and may not know themselves why they left.
The lever he recommends instead is customer selection. He gave the example of software sold to e-commerce stores, where stores on Amazon tend to be more stable long-term than stores on Etsy, even though both cost the same to acquire. Dale writes about these topics on LinkedIn as Dale W. Harrison.
"One of the things I tell people is the number one tool for minimizing your long-term churn rate is to choose better customers upfront."