Onboarding is the process of getting new users acquainted with your product. It’s their first impression and first experience with using your app that could shape their perception of your product completely. Strangely, it’s also a step that seems to be incredibly overlooked by many SaaS companies.
A brief picture of the SaaS product landscape
To start, let’s take a quick look at some stats:
- Your product will likely lose over 95% of new users within 90 days.
- There is a median annual churn rate of 10% annually.
- It costs 5 times more to acquire new users than to retain current ones.
Churn rate is the rate at which you lose customers, usually calculated monthly or annually. For example, if you have a 10% churn rate annually, this means that you lose 10 out of every 100 customers every year.
Given these stats, it seems only logical that making sure that users are happy with the product and continue to use it should be high on your list of priorities. This is especially true for SaaS products, which generally rely on subscription models. It only makes sense to shift more resources towards retaining customers rather than focusing entirely on new leads when it costs so much more to obtain new customers. There’s no point in putting so much effort into getting a lead to finally sign up, only for them to abandon it a few days later. Which begs the question…
Why do so many users abandon SaaS products so quickly?
It’s because users either don’t see or don’t understand the value your product provides.
The solution to this is a good onboarding experience. Depending on how complex your product is, the user may be able to figure out how to use it on their own. Maybe they’re an experienced power user who’s familiar with similar products; maybe they’re a complete novice. Regardless, it’s always a good idea to walk them through using it. Whether it’s sending a message to another user, accessing a cloud service, or collaborating on a document, the user should know what they can get out of your product.
How do we make a good onboarding experience?
If your product has just a few straightforward functions, you can afford to have a single, unified onboarding process. If not, you’ll need to break it down into easier to digest forms based on the user. Different users are going to have different priorities and proficiency levels; creating a personalized onboarding experience based on what they want to accomplish is the easiest way to direct them to what they need as quickly as possible.
Keep in touch
As the user spends more time on your product, check in with helpful resources and/or other useful information periodically. Make sure you set these to trigger based on user actions rather than periodically though – after a week, a user might have spent several hours on your product, or they might not have used it at all. Sending unhelpful information to users can result in indifference at best, and annoyance/cancellation at worst.
Due to the goal gradient effect, humans have been shown to increase efforts to complete the goal as they approach the finish line. For example, psychologists tested a coffee reward program where customers were given a free coffee after 10 purchases. They found that customers purchased coffee more often as they approached the 10 purchase mark.
Some parting thoughts
A good onboarding strategy is invaluable to any company. Of course, it’s not the be all end all of marketing and user experience; it’s important to not neglect the other aspects of your company. It can be frustrating and difficult to develop an effective onboarding process. But in the end, we promise it’s worth it.