Product-Led Onboarding

Building a cross-functional onboarding team. Identifying your onboarding success criteria. Minimizing the time it takes for users to experience the value of a product. Simplifying the signup process and designing the first product experience for new users. Creating behavior-based onboarding emails, in-app messages, and additional communication methods. Involving sales and high-touch support in the onboarding process. (Location 207)

It boils down to this: a product’s growth depends on a users’ first experience. (Location 258)

These “Aha” moments start at the first touchpoint. A touchpoint is any interaction that users have with a business; whether it’s seeing the link on a search results page, watching a video ad on Facebook, or reading a newsletter their colleague forwarded them. A successful first touchpoint helps people visualize a product in the context of their own situation. (Location 275)

Here’s what an “Aha” journey might look like: While surfing a website: “Aha! I understand how this product can help me.” Once they’ve signed up: “Aha! I’ve tried the product out for the first time and it’s useful.” After using the product several times: “Aha! I’ve adopted this product into my workflow and it’s saving me a ton of time.” Finally, once they start telling others about it: “Aha! I’ve invited my colleagues and we’re working more efficiently together.” The user onboarding journey is not about driving users to a singular “Aha” moment, but instead guiding them through a series of “Aha” moments. (Location 286)

The Acquisition Step is when a product’s positioning and perceived value are communicated. If unattainable or confusing expectations are set during the Acquisition Step, good luck with successfully onboarding new users. (Location 302)

To be successful in onboarding, you need to plant the seed of future value at the very first touchpoint – whether that’s in a Facebook ad, a referral from a friend, or an invite email from a colleague. With crystal clear product positioning and messaging, you can screen out people who shouldn’t be signing up for a product early on and be able to focus more time and resources on providing incredible experiences for people who should be using it. (Location 309)

But here’s how Slack defines a successfully onboarded team: Based on the experience of which companies stuck with us and which didn’t, after any team has exchanged 2,000 messages, 93% of those customers are still using Slack today. (Location 334)

Considering it costs up to five times more to acquire new customers than to retain them, you should work on increasing customer retention.6 Even a small amount, say 5%, can boost profit anywhere from 25 to 95%. (Location 340)

The initial user onboarding experience ends when a signal is received that the user is gaining meaningful value from a product and is likely to continue using (Location 343)

User onboarding is the process that takes people from perceiving, experiencing, and adopting the product’s value to improve their lives. (Location 350)

The goal of the entire onboarding experience is to help users improve their lives. It’s important and helpful to view onboarding not as an exercise in teaching users about a product but rather how it makes them successful. For that reason, onboarding shouldn’t be defined by how many features users have adopted. Instead, it should be determined by how much their lives have been improved. (Location 353)

The Three Key Onboarding Success Milestones To successfully onboard new users to a product, they have to achieve three key milestones:

• The Moment of Value Perception (MVP): This is when users first visualize a product in the context of their situation. For the initial onboarding of new users, the MVP usually occurs before signing up.
• The Moment of Value Realization (MVR): This is when users first experience a product’s value and achieve their desired outcome with the product for the first time.
• The Moment of Value Adoption (MVA): This is when users start using a product regularly and integrate it into their life or workflow. (Location 366)

Here’s what Slack’s value path looks like: (Location 374)

User onboarding is not a linear process. Instead, it’s cyclical. Because it never actually ends. (Location 394)

That’s why the first cycle of user onboarding for new users will take the most effort and time. This is where most opportunities and low-hanging fruits lie. (Location 413)

User onboarding is a retention lever (Location 470)

In working with a number of SaaS portfolio companies, I have found that there are two causes of churn that occur more frequently than any others. They are: failure to successfully onboard the customer and loss of the champion who drove the purchase. (Location 487)

User onboarding is a revenue multiplier (Location 491)

So it comes as no surprise the biggest weakness in growth stems from that initial first impression: (Location 510)

If having an incredible user onboarding experience is a retention lever and revenue multiplier, bad onboarding can lead to higher Customer Acquisition Costs, CAC. (Location 515)

Let’s revisit the previous example of Hubspot Sidekick. Let’s assume it costs $2,000 to acquire 1000 new users and, in this scenario, there’s a seven-day trial. (Location 520)

You can’t just slap on a product tour, send a few onboarding emails, and believe you’re going to move the needle. That’s risky behavior. It would help if you had a specific strategy in place based on user research and data. (Location 558)

Five Common Signs of Bad User Onboarding (Location 562)

Here are five common signs of bad user onboarding: (Location 567)

Examine your analytics to determine if new users are getting stuck in the signup process. (Location 570)

Users sign up and don’t come back. According to Intercom, 40% to 60% of users who sign up for a free trial use it once and never come back (Location 579)

Users don’t upgrade to a paid account. (Location 587)

So, what’s a good free-to-paid conversion rate? For freemium businesses, aim for a rate of 2% to 5%.17 For sales-assisted accounts that include products with free trials, aim for a 15% trial-to-paid conversion rate. For self-serve, unassisted users, this rate will sit a bit lower, at 4%. (Location 590)

So, the Appcues team transitioned to a usage-based free trial that expires after you show 50 Appcues product tours or tooltips on your website. (Location 604)

Called the EUREKA framework, this six-step process will shorten the TTV for more new users to be successfully onboarded to your product: (Location 689)

Before auditing your current onboarding flow, redesigning the first user experience, and rewriting onboarding emails, it’s imperative to establish a cross-functional onboarding team. This is the first step in the EUREKA framework. (Location 739)

Product Managers Product managers typically orchestrate the in-app user onboarding experience with designers and engineers: from the signup to the first-use workflow. They oversee implementing any triggers inside your product. (Location 750)

Marketers are critical in the user onboarding process because no matter how good the in-app user onboarding experience is, 40% to 60% of users will sign up once and never come back.25 By using external triggers such as onboarding emails, browser notifications, SMS messages, direct mailers, or retargeting ads (normally the job of a marketer), you can remind users how the product improves their lives. (Location 762)

A marketing team needs to create a cohesive and consistent content strategy that amplifies the need for a product or the pain of their situation to help them overcome their anxieties and objections. (Location 766)

Those responsible for customer success and happiness should lend a huge hand in the onboarding process. Understanding a user’s wants and needs is crucial during onboarding. (Location 768)

Every support question and survey response should be recorded and relayed to where it’s needed to enhance the user onboarding experience. (Location 773)

With hybrid or sales-assisted onboarding, it’s the sales team who reaches out to potential customers to ensure they’re receiving a ton of value from a product. (Location 774)

Using product engagement data from the product and marketing teams, sales teams often use demos to provide customized walk-throughs of the product. (Location 778)

Here’s a summary of the roles that could be in an onboarding team. (Location 786)

If you’re wondering who should be in your onboarding team, ask yourself which team or person is responsible right now for: (Location 803)

Improving user onboarding can’t be a side project. It requires attention and continuous improvement—a product’s growth depends on it. As discussed in Chapter 2, it’s a retention lever and revenue multiplier, and works to increase profitability by reducing your CAC. (Location 819)

You can download the PDF version of it at productled.com/eureka-chapter-2 and share it with your team. (Location 827)

Once you’ve gotten leadership buy-in and identified your onboarding team, the next step is to come to a common understanding of what onboarding means within your own company. Everyone needs to be aligned. Ask your team the same questions we discussed in the first section of this book: (Location 831)

The best way to iron out these details is to start with a kick-off meeting. Discuss the common goal of the onboarding team, who the core team members are and their functions, and why it is critical to the growth of the company. Define what success looks like and put it all in writing. (Location 837)

Well-planned and thought-out action is often the best strategy… not hope. (Location 871)

Before you think about an onboarding redesign by adding another product tour or rewriting your onboarding emails, you need to first understand your users. (Location 886)

When you boil it down, onboarding is really about changing someone’s behavior so that they can experience a better life. Users are frustrated or annoyed with something, and they sign up for a product to make their lives easier. Remember, the primary goal of user onboarding is to help users become better versions of themselves. (Location 888)

To build a great user onboarding experience, it’s important to know: What are the circumstances in users’ lives that triggered them to start looking for a solution like yours? What is their desired outcome? What does success look like? What’s holding users back from achieving their desired outcome? What else did they consider or try, and why didn’t it work for them? (Location 921)

Here’s another example with a SaaS business, Canva, (Location 943)

At a deeper level, it depends on who is using the product: (Location 944)

Segmenting and personalizing the user onboarding experience for different Customer Jobs is one of the low-hanging fruits of improving onboarding. (Location 949)

But for now, think about the desired outcomes that users want to receive when they sign up for your product. (Location 952)

Take, for instance, one of Canva’s social ads, which reads, “No design experience? No problem. Canva makes it easy for anyone to create professional designs that are sure to get you noticed.” (Location 971)

To onboard customers successfully to a complex product, you need to understand the push, strengthen the pull, calm anxiety, and overcome inertia. (Location 984)

Companies that invested in customer research grew two to three times faster than companies that didn’t!31 Understanding your users through customer research is the key to improving user onboarding and retention. Find the patterns in the stories of people who understand your product and understand what got them so excited to continue using it. The main focus should be to attract and create more “core users” who have fallen in love with your solution. To do this, talk to five types of people: New users - people who just signed up Shoppers - people who are evaluating your product Active customers - people who are regularly using your product Inactive customers - people who are still paying for your product but stopped using it Churned customers - people who have cancelled their account (Location 1003)

Success Canvas we’ve created for ProductLed clients, which you can download for free at productled.com/user-success. (Location 1022)

For example, Slack’s onboarding success metric is when teams have sent 2,000 messages because they’re 93% more likely to continue using it moving forward. (Location 1025)

The next step is to define what success looks like for your user onboarding experience. There are three moments that matter the most to measure onboarding success: When users complete the signup process. When users experience the value of a product for the first time. When they begin to use it consistently. (Location 1064)

In user onboarding, this is called Straight-Line Onboarding. It’s the minimum number of steps users need to take to achieve their First Strike. In my experience, most onboarding experiences are anything but a straight line. Well over 30% of them are superfluous and end up creating more friction for new users than necessary. Creating a Straight-Line Onboarding experience is critical in getting more users to experience a product’s value. You’re in a race against time. The goal is to decrease the time-to-value (TTV), the amount of time it takes a new customer to realize the value of a product. A short TTV means customers receive a faster return on their investment of time—and that means they are more likely to stick around! (Location 1315)

How To Build Your Straight-Line Onboarding To help you visualize this, I’ll be going through the steps to develop the Straight-Line Onboarding of a fictional online party invitation tool that I’ll call PartyParrot. (Location 1327)

These first few touchpoints are key for users to experience the wonder of Canva for the first time. Here’s the entire onboarding path from a Google search: Search for “Instagram post design template” Click on Canva’s landing page Select an Instagram template Edit the Instagram design template Add your own photos Download the image Notice how the first two steps aren’t even part of the website; they both occur on the SERP. Don’t forget that user onboarding doesn’t typically start on a website. It begins with the very first touchpoint. Another remarkable aspect about Canva’s onboarding path is that users don’t have to sign up at all to experience Canva’s First Strike; their growth team has clearly optimized their user onboarding experience. (Location 1343)

Evaluate each step. The next step is to evaluate each onboarding step for three components: a) Necessity b) Ease c) Simplicity (Location 1366)

Do this step collaboratively with the onboarding team. Ask each team member to label every step on their own. Then, go through each step together to identify which ones are necessary. Removing the red and yellow steps are imperative to building a Straight-Line Onboarding experience so more users achieve the First Strike. (Location 1378)

Does step five–confirming the email address–help new users accomplish their immediate goal of sending online invitations? This step is one of the biggest onboarding conversion killers. (Location 1382)

Working with a graphic design tool Snappa, we discovered this firsthand. About 30% of new users never confirmed their email addresses. Once we did some simple math, we realized that with the removal of this activation step from the beginning of the onboarding flow, we’d be able to generate a 6-figure annual recurring revenue (ARR) outcome. In less than a week of implementation, we started to see their monthly recurring revenue (MRR) grow substantially. (Location 1384)

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For those who still require new users to activate their email address before logging into the product, check your product analytics and see what percentage of new signups never touch foot in your product. Chances are 10% to 30% of new users never see the product because of this step. (Location 1388)

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So, before you cut a step out of your onboarding, ask yourself three questions: (Location 1420)

We could probably take this a step further and ask users to create an account after they’ve already picked a party invitation template and filled in the details of their party. This is the Sunk Cost Effect in action. (Location 1449)

Segmenting Your User Onboarding Now that you’ve built your product’s Straight-Line Onboarding, I want to share one concept that’s almost guaranteed to improve the performance of your user onboarding experience. Ready? Segmentation is conversion steroids for user onboarding. (Location 1499)

When we apply this thinking to The Bowling Alley Framework, we can assign users to a bowling alley based on their jobs-to-be-done. Each alley is a segment, and different Conversational and Product Bumpers can be designed to help new users accomplish the job they hired your product to do. There are three main benefits of doing this: Users learn what they need to in order for them to experience their First Strike. You can get down to the specifics of how exactly your product can help them. You can increase user motivation by sending targeted messaging based on each user’s primary goal. I provide a step-by-step guide to help identify your product’s Customer Jobs by doing user interviews in Appendix I. For each Customer Job, repeat the three steps to build a Straight-Line Onboarding experience. (Location 1519)

productled.com/straight-line-onboarding. (Location 1547)

One of the best ways to educate users and set the right expectations is through user onboarding emails; however, you can use the same content ideas for push notifications, direct mail, etc. A main challenge with user onboarding emails is figuring out which emails you need to send. To simplify the process, I’ve compiled a list of the top nine user onboarding emails: Welcome Emails Usage Tips Sales Touches Case Study Better-Life Expiry Warning/Trial Extension Customer Welcome Emails Post-Trial Survey The best user onboarding emails are an extension of your product. They have a magical ability to reach beyond your app or site to bring people back and move them toward customer happiness. (Location 2686)

Based on your response, Autopilot enrolls you in an automated sequence. Autopilot recommends starting with this list: Still evaluating → Offer a trial extension. Not a fit → Drop into nurture. Too complex → Schedule a customer success call. Too expensive → Provide a one-time discount. Went with another solution → Send top-of-funnel lead-nurturing emails to stay top-of-mind if the other service doesn’t work out. Just doing research → Add to nurture (notice the nurturing trend?). Missing product feature or integration → See if it’s on your product roadmap; if so, let them know when it’s live. (Location 2899)

But smart product-led companies anticipate the needs of certain customers. They have sales teams armed and ready to reach out to these users before they run into barriers. Product-led onboarding is not about removing the sales function. It’s about supporting new users. They don’t badger, nag, or hound users with phone calls, emails, and text messages. Instead, they’re consultative and helpful. (Location 2159)

The salesperson shifts from chasing leads to coaching users In a traditional sales model, the salesperson explains, shows, and demonstrates the value of the product or service. Prospects might not even have a clear understanding of their problem and your solution yet. In a PLG model, users have already shown interest in a product. They’ve tried and tested out the product already. Hopefully, they’ve experienced the value of it. In this case, salespeople act more like coaches. (Location 2173)

The salesperson has to leverage product engagement data in the sales process. In a traditional sales model, salespeople usually qualify leads based on two factors: High-value interaction with marketing materials where leads become a Marketing Qualified Lead ( MQL). Customer or company fit based on a checklist of the most common attributes someone needs to embody to become a successful customer for your offering. If they meet this requirement, leads become a Sales Qualified Lead (SQL). (Location 2186)

Defining Your PQL What makes a lead product qualified? Generally speaking, a PQL is a measure of each new user’s engagement with a product. This is a combination of: Activation: Has the user completed the Straight-Line Onboarding? If not, how far are they from completion? Engagement: How often are they using the product, especially the core features? Here’s how to find the answers to these questions for your SaaS business: Set up a system to measure product engagement. Define your PQL criteria. Rank users by product engagement. Set up a system to measure product engagement Tracking product data is an integral part of qualifying leads based on product usage. Focus on the key milestones in your Straight-Line Onboarding. The goal is to know which users have not completed certain steps so the sales team can respond accordingly. Define your PQL criteria A PQL could involve multiple product engagement metrics including, but not limited to the following: The number of times the user has returned to the product. The number of other features the user has tested. How soon after signing up the user tries out additional features. The exact criteria that go into defining a PQL will vary by company. But as a rule of thumb, a user who has completed the Straight-Line Onboarding and achieved their First Strike is a good indicator of a PQL. (Location 2204)