Onboarding: New Client Purgatory


Renee Conner, CEO PensionPro
June 29, 2017

New business is good business. When a company meets the sales goal, spirits are high; employees are jovial and work is…pleasant. However, every rose has its thorn, and excellent sales records are no exception. New customers mean there are new servicing logistics. As a TPA, I remember the challenges that followed rapid growth; reorganization during onboarding was the most difficult transition for my firm. How does one balance great customer service with consistent or even aggressive growth? The answer is this: by developing a successful onboarding process. Onboarding is the gap of time between the close of the sale and the point where a new client becomes an “existing” client – and it is a difficult time. As a TPA, I’m not sure I ever mastered the art of onboarding. There was a year in which we won 280 new plans and had our best sales year; however, the following cycle every staff member had felt like he/she had swallowed a watermelon…whole. The new clients had fallen into a customer service purgatory while we worked away at “existing” plans. How can this happen? It’s a product of the calendar cycle in which we service plans. Here is a sales and onboarding example of a firm that won a 401(k) plan in 2016. Take notice to how things look from a new client’s (Client X) point of view.

  • November 2016 – TPA sales rep meets with Plan Sponsor to propose TPA services and WINS! Plan Sponsor has already paid the prior administrator for the 2016 administration so an engagement agreement is signed for services effective 1/1/2017. Client X gets an invoice for takeover services.
  • Q1 2017 – Client X may have an investment platform switch or possibly just a TPA switch on the existing platform and no activity occurs with the Plan Sponsor. Client X receives first quarterly bill.
  • Q2, Q3 and Q4 2017 – Possible processing of distributions or loans. Client X gets a bill each quarter. Probably believes at this point that the distribution person is their main contact.
  • Q1 2018 – Plan Sponsor gets year-end data collection request that is unfamiliar to them with the new process of the firm. Client X has questions and calls their main contact (which at this point is still the distribution processor, oops!). At this point in the cycle, administrators are busy working on “existing” clients. I discovered with my staff that there was an unwritten rule that the new plans get handled last. Oh, and don’t forget, another quarterly bill is collected.
  • Q2 2018 – Almost a year a half later, the “new” plans are being onboarded. At this point, an administrator reviews the plan and finds that there is no copy of the 2016 valuation. After approximately 18 months, he/she calls (or worse emails) the “new” client to ask for missing information! This timeframe could be longer. This client could get put on extension and the plan sponsor not be contacted until later in the year. On top of this confusion (and admission of neglect) Client X is still receiving quarterly bills.

Note that Client X has been a customer for 18 months now, and is still being “serviced” by the accounting department, if any department at all. Perhaps most TPAs have bridged the gap between onboarding and servicing clients. However, it is more likely that most firms are at risk of, or already, leaving new customers in limbo. Through a constructed onboarding plan, it is possible to minimize the pains of new business, so each employee can pat themselves on the back, and not the forehead.

At PensionPro, we have implemented our systems with over two hundred TPA and actuarial firms. When we teach them about developing their project templates in our system, most go immediately for annual administration or sometimes distributions and loans. In our experience, onboarding projects rarely make the cut in priority buildout and sometimes are not built at all. Customer satisfaction is important to future business. Ensure a friendly transition for all clients with these tips:

  1. Identify who is a new client. Identification sounds like it should be a non-problem, but what constitutes a sale in the firm? The most common answer we hear is “it depends on who sold it.” If it was a partner in the business, they can come in with something written on a napkin. If it was a hired salesperson, they might be held to a signed engagement agreement. Regardless of who made the sale, make the process of selling universal. Internal staff can be skeptical that the client is real if the proper information isn’t in hand. It’s hard to corral owners and partners (I can say that since I was one), so hand sales off to an assistant to get them in shape for the onboarding process.
  2. Conduct a fantastic kickoff call. As part of the onboarding process, be sure to conduct an energetic kickoff or welcome call. This call should include the sales rep, the conversion or onboarding specialist and a representative from the administrative team even if it isn’t the administrator who ultimately does the work. The purpose of this call is threefold; introduce everyone, have a transfer of knowledge from sales to service and manage the expectations of the new client. Take a few minutes to tell them about the processes and show them any electronic services they might be using. Explain what they should do if they have a question or a distribution to process. Also, identify the items that will be necessary to complete the takeover of the plan and lay out the services that they can expect until they reach the compliance cycle. Follow this meeting up with communications memorializing what was discussed.
  3. Schedule a follow up call to check-in. Schedule to check-in with new clients; remember this is a process for every plan, so keep it consistent – start by choosing a timeframe the works for the firm. This is typically done by a member of the sales or onboarding staff. Identify any issues the client may be having and follow up on any missing items discussed on the kickoff call. If this is scheduled 3 or 4 months after the first call, there is another point of contact in what would otherwise be radio silence.
  4. Use electronic communications to help with follow-ups. Use a blast email system to send reminders about deadlines or missing information to all new clients. If the system allows users to identify new clients as a group or by status, one can keep providing services for these plans even though the first compliance cycle is not yet underway. For example, a blast email in the middle of February reminding them about the deadline for failed tests on March 15th or the April 1 minimum required distribution will alert them to at least check in with the prior administrator. Electronic communications can be sent en masse, updating many new clients at once without overloading the administrative staff to do this manually.
  5. Build a good system to monitor these tasks. Remember that onboarding is a series of projects that are performed in concert. Plan document restatements, kickoff calls, a possible money move, collection of prior information, setting the client up in compliance software, accounting set up, fee disclosures, and even an enrollment meeting. Spreadsheet tracking fails in this situation because there are either too many hands involved in all these processes or the same set of hands is wearing too many hats!
  6. Separate onboarding and administration personnel. Onboarding will always take a back seat to compliance. Government deadlines are not movable so compliance staff members will focus their efforts there (and rightly so). Also, understand that most individuals with sales skills are not great at follow ups. If someone is bringing in good business, give them the assistance they need to bridge the gap.

Assigning onboarding responsibilities to personnel with full caseloads leads to the customer service purgatory. Organized and trackable onboarding is a natural extension of healthy growth, which can mean a separate position is necessary to fill this role and even help monitor the sales pipeline.

Good luck and keep growing!

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