User onboarding can pretty much make or break your SaaS business. Would you agree with me on that?
If you follow Patrick Campbell from ProfitWell, you probably heard many times his point - focusing strictly on acquisition and product features will kill your company. You have to work on monetization and retention. And that’s because growing a SaaS startup is harder than ever. Competition goes up, features/tech differentiation goes down, products prices go down, willingness to pay goes down, NPS goes down, cost of acquisition goes up.
The reason for that is very simple - it became much easier to start a company and build a solution or simply add a feature. More competitors means higher PPC prices, more content, more emails, more noise. It’s much harder to stand out this days.
Customers have more choices and less patience than ever. And it’s not going to be easier.
I do agree with Patrick, but I think one element is missing - user onboarding. Your pricing and retention strategy has zero value and impact if users drop-off during or right after registration. If you don’t provide the best possible first experience, you might not have the second one. If users don’t realize the value you provide they will forget about you very quickly and your pricing won’t matter. If users don’t integrate your product in their daily/weekly routines your LTV will go down.
User onboarding can pretty much make or break your SaaS business.
In this post, I will share with you top 10 user onboarding mistakes I found reviewing over 300 SaaS products since January 2018.
I will add 1 “mistake” a week for the next 10 weeks. So please stay tuned!
#1 Not having any user onboarding funnel
The sad truth is that around 90% of the companies I reviewed, don't have any user onboarding flow whatsoever.
Most companies invest heavily in marketing and sales. Many of them have great products. But no onboarding. After the registration step, more often than not, brand new users find themselves on empty dashboard. As a result, the initial churn is high, the retention and signup-to-payment rate are below any acceptable number.
To solve that problem we have to create proper user onboarding funnels and help users realize how amazing our product is. To quote Joanna Wiebe from CopyHackers:
If Henry Ford had said, ‘Here are the keys to this Model T - you’ve got 30 days to use it to replace your horse,’ how many cars would’ve made it off the lot?
Giving users the keys to your complex product right away could cause a crash.
It was fine for Adobe not investing too much in Photoshop customers activation until a few years ago. Not many competitors, the product is hugely popular and if you need something like that, you’ll take your time and learn it. Nowadays, Adobe investing a lot in user onboarding and product adoption.
So, if you don’t have a product and competition like Photoshop had 10 years ago, you better help your customers realize the value and adopt your product. It is your best competitive advantage in the customer-centric era.
What can you do about it
Creating and implementing an onboarding strategy is a relatively long process and usually takes 3-4 months to get first positive results. However, if you know the answer to these three questions you can start the process:
Who are your main customers?
What do they value the most in your product?
What is the quickest way to prove them that you can deliver that value?
Who are your main customers?
Can you describe your primary customers in details. Not just demographic and geographic data, but their background, goals, challenges, needs, fears and concerns, day in life, where they are when they interact with your product, what devices they use and so on.
Knowing your customer is paramount as you can’t solve someones problems based on assumptions and gut feelings. At least it doesn’t sound like the winning business strategy. You can read more about personas in my post Lean Personas for Lean Startups.
What do they value the most in your product?
This question may sound obvious, but it actually not.
Your existing customers in most cases love your product not for the same reason as your brand new or potential customers. Ask your existing customers what do they love the most about your product and how would they describe your product’s benefits to their friends and colleagues and you might be shocked by the answers. Knowing what users value in your product is very important for product adoption, expansion and LTV improvement.
However, if we want to reduce first-day churn and improve signup-to-payment rates we have to know what our primary customers’ desired value is. In other words, what they are looking and hoping for. Knowing the value that customer wants to receive will help you not only create effective onboarding funnels, but also improve marketing.
What is the quickest way to prove that you can deliver that value?
You made a promise. Now it’s time to deliver on that promise.
However, the goal is not just to deliver, but to do it as quickly as possible. Remember, customers have more choices and less patience than ever. TTV (time time value) is one of the most important metrics in user onboarding.
If you know who your primary customers are and what do they want to receive from your product, you can create a journey to prove that they will get it. The journey better be less than 5 steps including registration. It’s pretty hard to create a long funnel that users will enjoy to go through.
There are two types of user onboarding funnels: forward and backward. “Forward” user onboarding means that you are guiding your customer through creation of something from the empty state. “Backward” user onboarding means that you are showing the end result as quickly as possible and then educate your customers by helping them to edit.
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#2 Start user onboarding by “showing around”
Have you ever heard of Spyker Cars? Probably not. It’s a Dutch sports car brand. Like most sports cars it’s not very exciting inside, but it’s a beast in action. The engine produces 525 hp, resulting in a 0-60mph (0–100 km/h) in 3.7 seconds and a top speed of 200mph (322 km/h).
Now, let’s say that you saw a dealership in town and thought about maybe buying a car like this. Next Friday you came over to the dealership. Dwight, the sales rep, immediately appeared and kindly proposed you to show the car. You set inside, and Dwight started to show you the steering wheel, the pedals, the gear, glovebox and how to open it, how to fix the rear view mirror and so on. When he finished, he proposed you to stay in the car for some time and play with all the parts he just showed you. But you can stay in it only for 30 minutes. Then you’ll have to buy it or leave the dealership.
That’s obviously not the way to sell such a car. You’re thinking about buying a sports car because you can get a speeding ticket in 4 seconds. Not because it has a fancy glovebox. They promised you the speed. Now Dwight has to deliver.
Same is true for digital products. You are promising to improve my quality of life in a particular way. Once I signed up, you have to deliver on that promise and help me realize that you can potentially impact my life.
However, most companies adding walkthrough widgets and videos that only “showing around” - explaining UI, the purpose of the page you’re in, where you can click and so on. That’s not the best practice to onboard a new customer.
User onboarding is about proving that your product can actually deliver on the promise that has been made on your landing page. You promised me to simplify the way my team works, now show me how you are going to do that. Make me feel that you can. No need to explain UI as I’m not a user yet. Instead, motivate me to take action, reduce friction, guide and lead me to my first WoW moment and celebrate my success with me. UI is secondary. First, show me “Why” should I care.
What can we do about it
Ask yourself two questions:
What brand new users need to know, think and feel about my product by the end of the very first experience so they could make an emotional or rational decision to come again and invest more (time, money, efforts) in my product?
How can I lead them to the point where they know enough, and think and feel the right way about my product?
I’ll give you an example. A few months back I signed up to ClickUP. By the end of the first day I knew for sure that I’m going to use it. But I also knew that it has the features that I need and I can use it for free. The registration and setup was long, but not boring or confusing. Instead it was fun. Finally project management doesn’t feel like work. I thought that it’s a good product and it’s going to be easy and fun to manage my projects. It felt like the team behind the product knows the problem very well, thought deeply about every aspect of the product and cares about the end user as my experience was very good.
To realize the full value of such product I need to use it for at least one month. But they managed to make me feel like I can be more productive by using their product and it’s going to be fun. They lead me to my first WoW moment during registration and setup. I knew enough about it to come back and keep investing.
On the other hand, when I reviewed Asana last summer, it didn’t feel that way. The registration and setup was much shorter, but there was too many confusing questions. It felt like I’m giving away my info to marketers for no reason. When I reached the dashboard I knew nothing about the product and no one wanted to help me. I thought that it’s probably not for me as they asked a lot about my teams/departments and I don’t have one. It felt like it’s not going to be easy to use this product and they care about their marketing needs more than they care about my needs. I know that it changed now.
Day 1 User Onboarding Online Course
Take a user from the registration to the value realization, establish communication and prepare him/her for the next step.
#3 Invest in onboarding emails first
User onboarding emails is an absolutely great way to help users realize the value of your product and it’s must have for any onboarding and product adoption funnel.
User onboarding emails can help us to guide users, motivate and help them to learn and adopt our product step by step as they progress. Done right, it can significantly improve retention and usage during onboarding.
But there is a catch. It works only if you have a good in-app user onboarding funnel. That’s why in many (if not most) cases onboarding emails are not bringing expected results. It’s simply too late.
Here is a simple example to explain what I mean.
#1 Imagine you came to a restaurant, got the menu, ordered a meal, and it was good. Next week you received an email from the restaurant telling that they have something new and exciting. So, you decide to go there again.
#2 Imagine you came to a pub, got the menu, and then something went wrong. Maybe the menu wasn’t clear - no pictures, fancy and not descriptive meals names, etc. Maybe the place wasn’t clean, too loud or you didn't like the waiter. Whatever it is, it made you feel like you won’t find something good for yourself here and you left. That’s it. The place actually might have some delicious meals. Next week you received an email telling that they have something new and exciting. But you already have an opinion about that restaurant and for sure won’t go there again.
Your user onboarding emails cannot fix bad (or lack of) user onboarding. You already failed that user. Now you are just annoying him/her and making it even worse.
No need for growth hacking, tricks and best practices. Make sure users get the best experience that leads to the value realization, success and trust creation. After that you can create an email sequence that will support retention and guidance during onboarding and product adoption phases.
#4 Too long Time to Success
So you added this walkthrough widget, created guides and other resources, and maybe even recorded a video or two to onboard your first-time users by leading them to a meaningful achievement - their first success. However, even though, the guides are really helpful, videos are great and the walkthrough widget leads users to the right point, for some reason most users don’t even complete the funnel. How is that possible?
At least 2-3 times a month I speak with companies who have this problem. They invest in user onboarding, produce videos, create guides and excellent copy. But nothing works.
The problem is that it’s too long and/or requires too much investment from users without proper motivation in place. These days, customers have less patience than ever. Users want everything to happen immediately. Thus, we have to reduce time to value and make the very first experience as short and effortless as possible.
Statistically, funnels perform well if they have up to 4 steps. The result depends on the product and industry. Every additional step will dramatically reduce customers' motivation to complete the funnel.
What can we do about it.
The most important metric in user onboarding is Time to Success (TTS).
I wound’t say that it’s a Wow or Aha! moment as basically users/buyers should realized the potential value before they sign up. If customers need to signup and play with your product to realize the potential value, you have a marketing problem.
Users usually cannot “experience” or realize the full value during onboarding. Value is something they will get after sometime. What can it be? Imagine your user say “here is why we bought it”. Product saved me X amount of time or money, helped to improve income or growth, increased social status or something else. It’s definitely not about features. Now, whatever the value is, it takes time to see it. Time to Value (TTV) for most product is around 30 days.
Success point, especially the first one, defines users opinion about your product. They came to you to solve a particular problem. You’ve made this promise on your landing page that you can help them. Now you have to deliver on that promise. Now we’re talking about tools, so it’s not about you, it’s about them solving their problems by using your tool. Success point is the point where they see that they can use your product and it feels like it’s going to be a good experience. It’s rational and emotional.
So here is the simple way to think about it:
What my users want to achieve by using my product?
What is the minimum set of action that can prove that my tool can help them?
How can I show them their achievement?
Would you like to know what is the biggest time and money investment mistake a SaaS company can make creating a user onboarding funnel?
Stay tuned. I'll add the mistake #5 to this article next week.