Many SaaS businesses think converting users is their end job when it is not.
If your customer doesn't understand the context of your tool, is struggling to use it, or has a bad initial experience, you have probably lost your chance to retain them.
And, mind not, SaaS businesses spent, on average, 92% of their first-year revenue on acquiring customers. That means it takes 11 months to pay back your customer acquisition cost.
Not being able to retain them can lead to losses or shutting down your business altogether.
But, many times, SaaS owners don't know what's going wrong, whether it's the training program, welcome emails, or slow load times.
This is where customer onboarding KPIs come into play. These are metrics for customer onboarding that determine its success. It’s important for SaaS businesses to provide a seamless onboarding experience to their users to be able to retain them.
When tracking customer onboarding, you must understand what to track more than what not to.
Track the wrong things, and you might end up tracking nothing.
So, here we are to help you with the top KPIs for onboarding process that help improve customer onboarding effectiveness and retain customers in the long run.
#1 What is customer onboarding?
Customer onboarding is the process of getting new users comfortable with your product.
It covers their journey from initial signup to product activation and use. A customer onboarding process includes product tours, step-by-step tutorials, or in-app guides to help customers use the product. Your goal is to fulfill your customer's expectations and help them achieve the required outcome through your product.
#2 Why is customer onboarding important?
Imagine signing up for a SaaS tool that feels complex to understand with no guides or resources to help you figure it out. What would you do in such a situation?
Churn out, right?
That's where customer onboarding plays a crucial role. It helps your audience stay for longer and helps them understand its features. That's not all. There are various reasons why customer onboarding is important:
- It helps bring recurring income since most of the revenue of a SaaS tool comes from its existing customers
- Happy customers are your biggest cheerleaders. If you treat them well, they will recommend your product to their network.
- The cost of acquiring customers is 5-25 times more expensive (depending on your industry) than retaining clients. Your onboarding process helps retain clients and lower acquisition costs.
#3 What are customer onboarding KPIs, and why should you track them?
For SaaS companies, the customer onboarding process is the most crucial. It sets the tone for their relationship and determines if they will stay or not.
Today, 90% of customers aren't satisfied with the current onboarding process that many companies follow and think they can do better.
But, fixing your customer onboarding process without measuring KPIs is similar to hitting a nail in the dark. It does more harm than good.
Customer onboarding metrics help you monitor your customer onboarding process on different parameters to ensure customers get the best out of your SaaS tool. These SaaS onboarding KPIs are best for:
- Identifying bottlenecks from signup to first use.
- Creating personalized user flow according to the data collected
- Filtering features that are working well and the ones that are not.
- Testing out different UX copies
- Educating users about the benefits of the app
- Teaching customers how they can use the product
- Explaining why a customer would want to upgrade
There is a number of onboarding program metrics that you should start tracking to give your customers an amazing first impression of your product.
#4 Top 5 customer onboarding KPIs for measuring onboarding effectiveness
There are several customer onboarding KPIs in the market, some of which are not as effective as others. So, here we are with the best onboarding optimization metrics to help identify areas of improvement while onboarding customers and deliver the best possible customer onboarding experience.
1. Time to value (TTV)
Time to value is one of the most crucial and popular customer onboarding KPIs to check while onboarding a customer. It measures the time a customer takes to realize value from your product. A lower TTV means that your product is fast in solving a customer's problem. If your TTV is high, customers aren't generating quick ROIs in terms of money and value, which is a big problem.
How to calculate Time to Value (TTV)?
To measure the Time to Value SaaS metric, you must first identify what value means to your customers. Remember that each customer is unique with unique objectives and has different ideas of what value your product provides them. After this, you can define the optimal time frame at which they can achieve these benefits.
How to improve your TTV?
If your Time to Value metric is high, your customers are facing difficulty getting the most out of your SaaS tool. You can combat this by integrating interactive user onboarding flows to help segregate customers by use case and goals.
Use MarbleFlows for this, a no-code platform that offers pre-built flows that you can integrate while onboarding your customers to help you convert and retain users.
You can customize this template according to your needs and add questions that help you better understand your customers. Marble Flows let you convert and upsell 2x faster with these interactive onboarding flows. Using the collected data, you can personalize the user onboarding process according to how they can best draw the benefits of your product.
2. Retention rate
Retention rate refers to the percentage of people your SaaS business can retain over a timeframe. It’s one of those customer onboarding KPIs that measures your onboarding process effectively. The higher the retention rate, the better you can hold onto your customers.
How to calculate your retention rate?
You can calculate your retention rate by subtracting the number of customers at the end of a period (say, 1 month) from the ones acquired during that tenure, divided by the number of customers at the start of the period.
Retention Rate = ((E-N)/S) x 100
E = Number of customers at the end of the period.
N = Number of customers acquired during the period.
S = Number of customers at the start of the period.
How to improve your retention rate?
A low customer retention rate means that your onboarding process is not helping customers understand the product. Here are some ways to improve your retention rate:
- Personalize your buyer's journey so they can easily derive value from your product.
- Build customer expectations and over-deliver
- Keep your customers in the loop.
- Ask your customers for regular feedback to ensure they are happy with the product
- Includes gamification to encourage customers to complete their tasks and stay longer on the platform.
3. Engagement rate
Product engagement measures how active users are with your product. This isn’t limited to frequent logins and random in-app activity. In fact, this could be a signal that your customers are facing difficulty using your product. Each product has its variation of defining successful engagement. For instance, a project management tool might define engagement as the number of projects created, tasks assigned and completed, and internal team interaction.
How to calculate your engagement rate?
The most common way to measure your product’s engagement rate is by calculating the engagement score. The scoring is based on the number of times an activity is performed and the importance of that activity. A low engagement rate means customers don't find your product valuable or cannot figure out how to use the product.
Product engagement score= Importance of the task * Number of times triggered
How to improve your engagement rate?
Higher engagement rates lead to loyal customers, increased profits, and better conversion rates. So, here are some ways you can improve your engagement rate for your SaaS tool:
- Provide customers with more resources, like explainer videos, tips, and product tours, to help them understand the tool in depth.
- Make your onboarding process frictionless by removing any irrelevant information or signup hurdles.
- Use in-app messaging to keep users hooked for more.
- Collect and act on customer feedback.
4. Activation rate
Activation rate is a sales onboarding metric that refers to the percentage of people completing certain milestones after being onboarded. These milestones are a key indicator of whether the user will return and continue using the product. Activation rate is one of the customer onboarding KPIs that measures customer retention and engagement with the product.
How to calculate your activation rate?
Each product has a unique activation event that shows whether customers are interested in using the product. For instance, Facebook's activation tasks include adding friends or updating a profile photo. Alternatively, you can choose an activation task for your product that shows the value of your product.
Activation rate = (Number of users who reached the activation point/ Total number of people who signed up) * 100
How to improve your activation rate?
A high activation rate means showing users the value of your product as soon as possible. This is your first step to winning over your customers and getting them to stay longer using your product. So, here are some ways you can improve your activation rate:
- Make things simple for your customers. Your activation milestone will be frictionless and easy to complete.
- Create more visual product workflows or add videos for customers to understand how to use the product.
- Use gamification in your customer onboarding funnel with progress bars, badges, or leaderboards to encourage completing tasks.
5. Free to paid app conversion rate
Free to paid app conversion rate is one of the top customer onboarding KPIs businesses use to improve onboarding effectiveness. This metric measures the number of people that upgraded from free to paid plans. Freemium or free trials are great onboarding since they let the customer test the product before paying for it.
How to calculate your free to paid conversion rate?
To calculate the free to paid app conversion rate, divide the number of free trial or freemium customers converted to paid plans by the total number of free trial or freemium customers during that period. A higher free to paid conversion rate means that users are satisfied with your product and want to draw more value from being paid users.
Free to paid app conversion rate=( Number of free trial or freemium customers that converted to paid plans/ Total number of free trial or freemium customers) *100
How to improve your free to paid conversion rate?
The goal of freemium or trial plans is to discover your product's value and help your customers reach their "aha" moment faster. Here are some ways you can get the most out of your free plans:
- Ask for feedback from users who do not convert. This will give you a brief idea of why people are not convinced to invest even after using the product.
- Tailor your onboarding emails according to the customer segment and use of the product to help drive value from your product faster.
- Produce content that solves the customer's problem and allows them to seamlessly use the product.
- Provide your customers with so much value that they crave more and they will get the paid plans.
#5 Wrapping Up
These were the top customer onboarding KPIs that you should measure to improve your customer onboarding process. The more accurately and frequently you measure your customer onboarding analytics, the higher the chances of getting a granular view of your onboarding process and the areas that need improvement.
If you are looking to gain more information about your customers and personalize their onboarding experience, then integrating a pre-built MarbleFlow template can be beneficial. They are simple, easy to use, and can provide an excellent ROI for your business.
