Customer Churn is Bankrupting Large Enterprises – Here’s Why

Onboarding and customer service are the cornerstones of the entire customer experience. Neglect those foundations, and growth for even the largest enterprises will crumble.

In today’s market, even the largest and most established enterprises are seeing customer retention and loyalty plummet. Neglecting the fundamentals of quality customer service and thorough onboarding processes is rampant, especially among tech startups racing for growth at all costs. This decay is steadily eroding brand trust and revenue. To thrive in a competitive climate, companies must recommit to elevating the customer experience.

The Critical Importance of Consistent Experience

A consistent customer experience builds trust in a brand across every touchpoint. However, many enterprises today are riddled with inconsistencies that leave customers confused and frustrated. A bank may promise highly personalized service during sales, but after signup clients are directed to vague, impersonal onboarding resources and form email responses.

Or a SaaS startup promotes their “white glove” service model, but once customers encounter an issue the support reps seem untrained, apathetic, and unable to resolve problems. In essence, brands are judged across the entire journey – not just at the point of sale. Failing to align onboarding and ongoing service with sales and marketing erodes trust.

The Deterioration of Onboarding

Onboarding is the process of bringing customers “on board” with helpful resources after signup to ensure they fully understand and can properly utilize a product or service. This leads to higher adoption, retention and referrals. However, research shows onboarding is increasingly neglected:

  • A HubSpot study found 46% of customers see onboarding as impersonal.
  • A Boldstart study showed 93% of customers need onboarding support.
  • SuperOffice reports up to 20% of customers churn in just 45 days without onboarding.
  • A Stripe survey found only 39% of SaaS startups have a dedicated onboarding process.

Why has onboarding deteriorated? Common issues include:

  • Minimal Communication: Customers receive little post-purchase contact and instructions from companies.
  • Confusing Instructions: Onboarding info is vague, complex, buried or assumes too much existing knowledge.
  • Lack of CRM Tracking: No system to track each customer’s onboarding progress.
  • Unclear Milestone Setting: Companies don’t align with customers on what onboarding success looks like.
  • Self-Service Overload: Providing links to manuals but little real guidance. Customers feel overwhelmed and unsupported.

Well-designed onboarding guides customers through:

  • Activation: Spinning up key features, configuration assistance, initial templates/workflows
  • Adoption: Ongoing training webinars, help resources, proactive check-ins
  • Renewal: Reviewing milestones achieved, demonstrating full value gained
  • Expansion: Upsell opportunities when ready, encouraging referrals

This early hand-holding ensures customers gain competency and see the product’s value, leading to higher retention and revenue. But many enterprises neglect this today.

The Decay of Customer Service Values

Beyond botched entry, poor ongoing customer service also erodes loyalty. Speedy issue resolution, personalized engagement and accountability used to be sacrosanct. But brands today increasingly dismiss these service values despite their impact on retention and growth.

For example, many customers now languish indefinitely on hold or waiting days/weeks for email replies. Others encounter rude, untrained reps unable to address concerns. Certain brands make it needlessly difficult to return items or exit services, prioritizing revenue over customer needs.

These short-sighted practices directly degrade the customer experience. Yet they’re accelerating across whole industries, especially in hyper-growth tech startups. This decay of service principles stems largely from viewing customers as one-time sales transactions rather than long-term relationships requiring ongoing nurturing. The cost is diminished retention, negative word-of-mouth, and destroyed trust.

Case Examples

Some Canadian brands exemplify poor onboarding and service damaging the customer experience:

  • Shopify – Fast-growing ecommerce startup known for cluttered onboarding with unclear next steps after purchase and many confusing features overwhelming new users.
  • TD Bank – Canada’s second-largest bank criticized for routinely long hold times, reps lacking authority to address issues, and branches with inconsistent service quality.
  • Rogers Telecom – Canada’s largest wireless provider frequently rated as having the worst customer service in surveys, including long wait times and unresolved technical problems.
  • FreshBooks – Toronto-based accounting software startup relies heavily on self-serve onboarding resources, leaving many new users feeling lost and churning early.
  • Wealthsimple – Fintech startup known for great website experience but limited human touch during and after onboarding. Support feels robotic and impersonal when issues arise. Gotten worse since acquired by Investors Group.

The Cost of Losing Customers

The quantifiable costs of poor service and onboarding are staggering, but often overlooked. Lost recurring revenue, negative word-of-mouth, and diminished brand value from disgruntled customers can sink enterprises.

Consider a subscription SaaS company with a 36-month average customer lifetime value of $5,000. If just 25% of new customers churn due to poor onboarding, a cohort of 1,000 new users represents up to $1.25M in lost recurring revenue. Enterprise scale multiplies these costs enormously.

Improving onboarding and service represent investments that pay back handsomely through higher retention and growth. Yet many brands overlook this in pursuit of rapid unsustainable expansion, to their detriment.

Turning the Tide Through Customer-Centricity

Though the deterioration of onboarding and service principles is alarming, examples remain of brands excelling by recommitting to customer experience:

  • – Leverages support Slack channels and free training resources to guide new users. Makes onboarding highly collaborative.
  • Four Seasons – Extreme luxury hospitality brand known for impeccable service and empowering staff to delight guests.
  • Clearbanc – Toronto-based VC fund built on speedy, transparent funding model and exception customer service availability.

These brands recognize that carefully designed onboarding and ongoing support build loyalty and retention. Providing personalized guidance early in the customer lifecycle boosts satisfaction and revenue durability.


The caliber of a company is best determined by how well they treat customers after the sale. Any brand not continually earning loyalty through onboarding and service has already begun to lose.

Increasingly poor onboarding and disregard for service values are eroding trust in brands across industries. Large enterprises and high-growth startups in particular must recommit to the fundamentals. Seamless user experiences, frictionless onboarding and readily available support mitigate churn and fuel growth. Taking customers for granted destroys brand equity. The best companies understand loyal customers are the bedrock of sustainable success.

September 11, 2023

Marcus Dickinson

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