Assessing the Impact of Chokepoints in a Customer Onboarding Process

Abstract

Customer onboarding processes have become dysfunctional, especially with regards to the increasing number, complexity, and often, competing demands, of regulatory and law enforcement bodies with oversight over a firm’s practices. Prospective customers are screened across any number of considerations ranging from conventional ones such as financial considerations (i. e., “Does this customer have an acceptable balance sheet?”) to the more recent socio-cultural ones (i. e. “Does this customer have an effective diversity program?” “Has this customer expressed a commitment to environmentally sustainable business practices?”). A compromised sales pipeline resulting from an impaired customer vetting process may diminish economic returns, reduce profitability, and erode market share. Does repairing customer intake processes by rescinding or reducing extant customer acceptance thresholds enhance firm performance? In this paper, an onboarding process simulation is used to isolate the effect of changes in established acceptance thresholds on customer’s likelihood of success. When only One Class (“Successful” or “Performing”) customers are available, One-Class algorithms can be used for resolving the matter. Results show that there exists a tradeoff between reductions in customer thresholds and the firm’s commitment to ensuring customer success.