All relationships are formed at the beginning," Milan Kundera wrote in his novel The Book of Laughter and Forgetting. Kundera was talking about personal relationships. A new customer strategy called on-boarding is bringing his observation into the business world.

Organizations that use on-boarding overserve their new customers during the first 90 days of their interactions. T-Mobile, for example, calls or emails customers several times during that initial period to offer rate plans customized to their needs, added-value features and billing options based on their probable interests, as well as to check on satisfaction with the customers' equipment and service.

On-boarding is gaining momentum in many industries for two reasons. First, new research quantifies the opportunities for cross-selling and higher retention rates that result from effective on-boarding. Second, software companies have developed products that customize and automate the on-boarding process.

According to a recent report from Dove Consulting, which focused on the retail banking business, on-boarding is the main factor in avoiding high customer attrition rates in that industry. Dove's numbers say that the majority of U.S. banks have customer attrition rates as high as 40 percent within the first year. For customers who have been with the bank more than a year, that attrition rate drops to 10 percent. So the initial interactions are critical. In fact, Dove estimates that the incremental annual profit from first-year customers at retail banks is about $1 million per 100,000 new accounts. For customers who stay more than three years the incremental profit average skyrockets to $5.2 million per 100,000 accounts.

"Retail banking is where on-boarding is most prevalent because there is so much at stake at the beginning," says Dove director Joleen Preuninger. "But I think other businesses are starting to take the concept much more seriously."

Preuninger says the companies that on-board most effectively focus on outbound contact through all touchpoints. She believes retail banks, such as Bank One, Bank of America, and Fifth Third Bank, provide examples of best practices in on-boarding. These banks use key moments in new customers' interactions to extend services that are relevant to their specific needs and value, such as home equity loans, retirement accounts, low-interest lines of credit, or high-yield CDs.

Although the contact center can be a powerful tool for on-boarding, Preuninger warns companies against using offshore contact centers to make those customer connections. Doing so can add a high-risk factor to the on-boarding process, because the potential for miscommunication increases when a language barrier is introduced.

One alternative is to automate the process. Vendors like Click Tactics have developed on-boarding solutions that customize triggered communications during the critical first 90 days. Click Tactics software, for example, profiles each customer to analyze the combination of message, timing, and channel that will fit that customer's preferences based on value models. One Click Tactics retail bank customer choreographs a sequence of mailings based on more than 100 variables from customer profiles. Now campaigns that used to take up to 45 days to execute take only two to three days. Better yet, attrition rates have decreased and response rates to specific product lines have increased significantly.