I’m not going to stop fighting this. The banking industry’s misguided view of what onboarding is, that is.

A while back I wrote (slightly edited):

“The banking industry has an odd definition of the word on-boarding. Or at least to me it does, considering it’s not a real word in the first place.

To me, the term implies the process by which a firm helps a new customer become a satisfied new customer. To me, the concept implies that simply closing the sale isn’t enough — that some, if not many, customers need help when initially using, establishing, or setting up a product or service.

But, to many banks on-boarding means trying to sell more products to new customers immediately after those customers purchase their first product or service, before some fictitious cross-selling window closes.”

A recent article on BAI’s site called Customer Onboarding: The 90-Day Countdown underscores the industry’s philosophy:

“An invisible clock starts ticking the moment a customer purchases a new product with a financial institution. Research has shown over and over again that by the time the clock has ticked for 90 days – a period of time known as onboarding – the customer’s lifetime value and profitability will have been practically set in stone.”

But what the “research” never seems to explain is why this alleged 90-day window exists. Here’s a theory: It’s the window in which the customer is still in the honeymoon period, and their bank (or credit union) hasn’t done enough to piss them off yet, or fail to live up to the expectations that were set during the evaluation (courting) phase.

There’s a 90-day window because banks have been terrible at building relationships with customers. There’s nothing magical about the 90-day window that causes the cross-selling window to close.

The BAI article does a nice job of explaining why establishing valuable customer experiences following the opening of a new account is important (and recognizes the role of expectations in the the courting phase). But with an industry mindset that associates onboarding with cross-selling, I fear many will fail to realize that onboarding is more about customer engagement than cross-selling.

So I’d like to propose a new term (and process): Honeymooning.

To be clear, honeymooning is not the process by which someone pulls their pants down and shows their butt to their significant other.

Instead, it’s the process that ensures that new customers become engaged with the bank, and that the new customer’s expectations are met.

This implies that actions taken by the bank in the honeymoon period will be oriented more towards driving high-value engagement behavior — e.g., online bill pay enrollment, use of PFM tools and educational material, webinars and seminars the institution puts on — and towards ensuring that new customers have selected the right account or product, than trying to push another product at them.

Dictionary.com refers to a honeymoon as a period characterized by harmony and goodwill. By the way, Dictionary.com doesn’t have a definition for onboarding, and describes on-board as providing or occurring on a vehicle — leading to a perception of “taking one for a ride”. Nice.

In a banking context, honeymooning could  mean waiving any ATM or overdraft fees, or late fees, or other fees that a customer might be asked or forced to pay.

Could that negatively impact revenue at a time when replacing potential lost revenue is a top priority for financial institutions? Absolutely. But if it builds goodwill and trust, it might help to extend that magical window from 90 days to 180 or 360 days.


11 thoughts on “Honeymooning

  1. In addition to the honeymoon theory, I’ve heard others suggest that people’s inertia is at its weakest right around the time they make the switch. The residue of frustration and irritation at their former bank apparently takes about 90 days to wane. After that, their anger is no longer volatile enough to trigger action.

    I’ve also heard people theorize that this 90-day window represents the period of time in which people have “financial matters on the brain.” After months — maybe years — of not taking any action on their finances, they may lump a few chores together: “Hey, while I’m here at the bank switching my new account…”

    You’re right Ron, there are theories that warrant further examination.

    One thing I’m curious about is how on-boarding success rates vary depending on which product the customer acquired first. There must be a huge difference between how many additional products/services a new checking customer gets vs. someone who gets a CD or auto loan. All inbound customers are not created equal, are they?

  2. Ron,

    Could it be that we don’t treat a customer any different after the first 90 days when their behavior and expectations have changed significantly? That is, what I expect when I start with a bank, is very different from what I expect once I am your customer…


  3. The new customer kits at banks and credit unions I have interacted with are terrible; basically a folder they stuff paperwork into for the stuff you sign up for that day. No soft sell, “portfolio of services” kind of material for products you did not buy.

    Seriously, if I turn down a product you pitch me at account opening, does that mean I’m *never* going to be interested in that product? Maybe I was too busy that day and “No” meant “I don’t have time for this pitch right now”?

  4. JP: Great points. Not sure I agree with the “financial matters on the brain” argument, since lots of different life-related and market-driven events drive financial needs. I also don’t know if anyone’s looked at onboarding success rates by products. Not sure if lots of banks/CUs are onboarding for products other than checking accounts.

    Brett: I can’t help but wonder what’s driving the change in expectations. When a customer is sold “free checking”, then gets hit up with fees, then maybe expectations change from “wow, these guys are really different/better” to “oh, these guys are no better than the other banks I’ve been dealing with.”

    Jim: Betcha that no more than half (I might even do this bet at 33% or 25%) of banks have the ability to determine that a product offer made at account opening was declined when they’re running an outbound campaign for that product a year later.

  5. Ron,
    You can count us in that 25-33%, because of the handy-dandy referral software I wrote for the bank. 🙂
    Now whether we actually look at that data is something else.

    I’ve never understood the 90 day window either. I figure there’s got to be a better way.

  6. JP: I imagine I’ll tick off a bunch of credit union people with this comment, but I do think there’s a mindset within the CU community that “selling” is distasteful.

    I have to say, though, that I do find it hard to agree with the people that try to position a sales message as a “service” to the customer. Their logic usually goes “if we identify a potential need that a customer has, and then alert her to that need and how we can satisfy it, isn’t that good for the customer?”

    My response to this is usually: “I think that’s stretching it a bit. If you discover that I have a great credit score and offer me what YOU think is a great credit card deal — but have no clue that I have a bunch of cards in my wallet already, am very happy with my provider, etc., then how is your sales message such a great service to me?”

  7. Selling does not have to be an ugly word, but selling should never be the first step. The whole issue of Onboarding/honeymoon/welcoming is fascinating, but it really can’t be rolled up into one word or term. There are too many nuances. I like “Welcoming” – it is the process by which you make your impression on that new customer. You “welcome”, you “orient”, you “discover” current needs and if time permits, you “examine” potential future needs. That 90-day window (and to me it is actually a 12-month window)is your time to “impress” and “delve” and “learn” about your customer; “explore” their needs and “provide” solutions.

    It’s not a gimmick – this is what sales is all about; welcoming, orienting, discovering, examining, impressing, delving, learning, exploring, and providing. You do all this stuff to sell, which is why we are in business. You can’t sell just to sell, you have to earn business with hard work and true caring.

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