The Power of 90 Days: Elevating Customer Onboarding for Financial Success

In the dynamic world of financial services, the initial period of a new customer relationship represents a profound opportunity. Far from being a mere administrative formality, the first 90 days are a critical window that significantly shapes long-term engagement, profitability, and the depth of the customer relationship.

Regrettably, many financial institutions (FIs) still approach customer onboarding as a simplistic checklist rather than a strategic imperative. This oversight carries substantial financial and relational costs.

Compelling data clearly indicates that the foundation laid during these early months dictates future success. FIs that strategically invest in robust onboarding programs consistently achieve superior growth, cultivate more valuable customer relationships, and secure profitability that others must continually chase. This initial momentum isn’t just a “honeymoon phase”; it’s a period of unparalleled receptiveness, where new customers or members are most attentive to an institution’s communications and offerings.

Onboarding: The True Catalyst for Enduring Growth

When executed effectively, customer onboarding transcends basic account setup. It generates crucial insights, fosters awareness, and builds early traction, ultimately defining the entire relationship. It stands as one of the most potent levers an FI can wield to boost customer lifetime value. The capacity to guide, communicate, and personalize interactions during this pivotal phase has profound and lasting consequences on product adoption, customer retention, and overall profitability.

To illustrate this, let’s consider a practical example from a community financial institution, drawing insights from Marquis’ Conversational Analytics tool, KEYs.ai. By comparing households (HHs) with less than one year of tenure against the institution’s overall HH data, a clear pattern emerges in product penetration:

• Product Adoption Trends: Most products are acquired early. Efforts to cross-sell in subsequent years often yield diminishing returns. If opportunities aren’t seized within the first year, securing new product adoptions becomes exponentially more challenging.
  • New households (tenure < 1 year): 1.84 unique products
  • All households: 2.12 unique products

  This highlights a critical point: a weak foundation in the initial 90 days seldom leads to a stronger, more diversified relationship later on.

• Household Product Mix: The proportion of single and double product households remains remarkably consistent between new and tenured customers. This suggests that households failing to diversify early are unlikely to do so significantly later.
  • % Single Product HH – New Households: 22%
  • % Two Product HH – New Households: 72%
  • % Single Product (All Households): 24%
  • % Two Product (All Households): 71%
• Deposit Balances:
  • New HH Average Deposit Balance: $2,228
  • All HH Average Deposit Balance: $9,744

  These figures logically reflect the time needed to transition funds and establish direct deposits. However, they also underscore a significant opportunity: the early months are prime for establishing foundational deposit products. Future additions of new account types or products face greater friction and are less likely to occur. Institutions should proactively encourage opening multiple low-balance accounts (like money market, CDs, or goal-oriented savings) early on, potentially by extending minimum balance requirement waivers or tiering rates, to solidify these relationships.

• Lending Dynamics: This institution’s data also unveiled an interesting, albeit intuitive, trend regarding lending:
  • New HH Average Loan Balance: $33,515
  • All HH Average Loan Balance: $17,710

  FIs frequently attract new households through competitive lending products. While initial loan balances are high, they tend to decline over time as loans are paid down, often with checking accounts being added in exchange. Crucially, the average profit per household reveals:

  • Year 1: $272
  • All households: $162

  This downward trajectory indicates a challenge: high-value loan relationships don’t automatically translate into sustained long-term profitability without being complemented by additional products and ongoing engagement. Without intentional onboarding and strategic cross-selling, FIs risk merely swapping one product for another, failing to elevate overall household profitability.

The Unequivocal Message of Onboarding Data

The data unequivocally confirms that the first 90 days are definitive for customer relationships. Across various institutions, consistent patterns emerge: households either engage meaningfully in the early stages or typically fail to achieve full engagement. The vast majority of product adoptions occur within the first year, often within the initial few months. Miss these early opportunities, and the window for deeper engagement rapidly closes.

Here’s what the numbers reveal for institutions lacking an active onboarding program:

• Product adoption spikes early, then momentum drops significantly.
• An initial lack of product diversity typically persists throughout the entire customer relationship.
• Deposit balances often start small and rarely expand into new deposit product categories later.
• The marketing resources required to add additional loans or deposits after the initial onboarding period become substantially higher.

The clear conclusion is that long-term customer value is either built or lost within the first 90 days. A robust, strategic onboarding program is not just a nice-to-have; it is a fundamental growth strategy.

Quantifying the Financial Impact of Onboarding Success

The long-term value of effective onboarding is vividly illustrated by analyzing product penetration across different customer tenure segments. While we don’t present a visual chart here, the pattern observed generally shows limited examples of significant product growth in various categories beyond the initial year. Often, any apparent growth in one category is offset by a reduction in another (e.g., increased checking accounts correlating with a decrease in auto loans).

This reinforces a vital truth: the customer relationship is primarily defined and deepened early on. If long-term relationships simply evolved naturally, we would expect to see consistent increases in products adopted relative to year one. Instead, the data confirms that sustained growth is directly driven by effective short-term onboarding execution.

Putting the Math Behind the Opportunity and Risk

To grasp the profound financial implications of onboarding, let’s quantify how even minor shifts in performance can significantly influence long-term revenue. Using our real-world FI example as a baseline, we make the following assumptions:

• Average margin: 3.5%
• Average deposit balance per household: $9,744
• Current number of new deposit households (Year 1): 8,302
• Average household tenure: 8 years

Now, consider the impact of a modest 10% or 20% change in the onboarding effectiveness for Year 1 households:

• A 10% change equates to a gain or loss of approximately +/- 830 households.
• A 20% change means a gain or loss of about +/- 1,660 households.

Applying this change to the average deposit balance, margin, and tenure, the financial impact is substantial:

• A 10% change in onboarding effectiveness translates to +/- $2.2 million in lifetime revenue.
• A 20% change results in +/- $4.5 million in lifetime revenue.

These figures are conservative, as they exclude additional revenue streams such as interchange income, fee income, mortgages, or referrals to investment services. For this particular FI, such a revenue swing represents roughly 3-6% of their net income. This isn’t just a performance metric; it’s a budget-altering factor, providing a compelling rationale for making onboarding a top priority.

A Marketing Advantage Hiding in Plain Sight

Many financial institutions dedicate considerable time and resources to marketing efforts targeting long-tenured customers or members, aiming to solidify their position as the Primary Financial Institution (PFI). However, evidence across FIs of all sizes points to a crucial insight: the most efficient marketing investment occurs during the first 90 days of a customer relationship.

After this initial period, the returns diminish. Marketing spend and resources often yield a smaller relative lift. For institutions operating with limited resources, this presents a significant strategic challenge. Knowing precisely when to focus marketing attention is as vital as knowing where to direct it.

Onboarding: Beyond the Transactional Sale

While discussions around onboarding frequently center on deposit growth, lending, and cross-selling, it’s essential to recognize that not every impactful interaction needs to involve a direct sales pitch.

The onboarding phase offers a unique window to firmly establish your institution’s identity, values, and relevance within a customer’s financial journey. Complement your outreach with these key strategies:

• Provide Education: Offer valuable financial literacy resources, product guidance tailored to financial goals, and clear instructions on utilizing digital banking tools.
• Build Credibility: Actively communicate your institution’s commitment to the community and highlight its history of dedicated service.
• Foster Connection: Personalize the experience with welcome letters from leadership, engaging welcome videos, and bespoke outreach that makes customers feel valued.
• Utilize Every Available Channel: Leverage email, online and mobile platforms, digital targeting, and even traditional direct mail to ensure a comprehensive and consistent message delivery.

New customers or members are most receptive and attentive during these initial stages. This makes the onboarding period the opportune moment to be both exceptionally helpful and strategically assertive in shaping a strong, lasting relationship.

Source: thefinancialbrand.com