The SaaS business model is growing in popularity by the day, which means competition is growing too. And it’s not enough to just deliver a product anymore… you need to deliver an experience to compete.
The ongoing nature of the customer relationship in the SaaS business model means that customers must be motivated to continue paying for a product month after month or year after year to ensure recurring revenue.
This means customer retention is the new king, and reducing churn is at the top of most SaaS business’s priorities.
The first and potentially largest opportunity for churn?
Directly after signup—and unfortunately it happens often.
For example, the average Google Play app loses 77% of its users within the first three days after install. Customers may leave because they don’t understand how to use a product or because it doesn’t meet their expectations.
One way to prevent this type of churn is to expedite the time to your customers’ first experienced success.
Good customer onboarding can prevent and reduce churn. With the right practices in place, SaaS businesses can identify goals, make great first impressions, provide early wins, and increase customer retention.
1. Map your SaaS customer onboarding journey.
The best way to locate and understand friction points in your onboarding is to sit down and map out the typical journey customers take between sign up and first success.
Appcues describes a great mapping process that involves identifying user touch points, benchmarks, accomplishments, and scheduled notifications to help visualize how customers get from point A to point B during onboarding.
One of the challenges in this process is to define a valid “first success” point in the customer journey. This is often called the “aha! moment” of your product or the Customer Success Leading Indicator (CSLI), and is defined differently by different businesses. For example:
- Dropbox defines this moment as when an account has added one device, one file, and one user
- Slack feels it’s when a team has exchanged 2,000 messages, and
- HubSpot defines it as once the customer used 5 out of the 25 available features in the platform.
Whatever a business chooses to measure as a customer’s first success, it should be something that correlates highly with retention. Customers that come back are finding value in your product.
By identifying the drivers of value for your returning customers, you can identify the “aha moments”.
What are some early successes your retained customers have achieved? How aligned is your onboarding process with these customer success pathways?
Still developing an onboarding process? Great, you should:
- take the time to map out what the ideal journey will look like
- brainstorm as many possible challenges users may come across as you can, and
- map out how users will find the solutions to those problems.
Your focus should be on ensuring new customers learn how to use your product to achieve their goals quickly.
For that, you need to have done some homework.
2. Do your homework.
Good marketing and sales require research into target audience and good fit customers; use this research to inform your onboarding as well.
If you already know the desires commonly held by customers that seek your product, it’s much easier to put relevant solutions front and center in their first interactions with it after purchase.
If you’re lucky enough to be meeting or interacting directly with prospects during the sales process, use this time to ask exactly what they’re looking for.
Knowing a prospect’s individual goals makes it easier to tailor onboarding to swiftly get them to that success point.
Perhaps the “aha moment” is along the path they’re seeking too, or maybe they can be introduced to components of that moment as you onboard them.
3. Set realistic expectations and goals.
Be honest about what your product can and cannot, do. If you can’t help a prospective customer meet their goal quickly, be clear about what steps will have to be taken on the way to getting there, and how long it will take.
A customer that has reached the point of onboarding should already have an idea of this process thanks to marketing and sales. By this point, bad-fit customers may have already opted out—a beneficial situation for your business in the long run. If not, this is the last chance to identify them before expending resources on efforts to retain them.
Most importantly at this stage, establish how your customer defines success.
Remember Microsoft Word’s Clippy—the helpful paperclip suggesting templates based on a document’s contents? Clippy was an early example of efforts to use artificial intelligence to ascertain user goals to help reach them sooner.
Whether your business uses an automatic prompt or a more personalized form of communication will depend on your business style.
Ultimately, the goal of onboarding is to help a customer achieve early success, but success looks different for every customer.
Some may want to use a product to better organize data, while others will want to use that same product to improve communications.
When possible, take customers straight to their solution during onboarding to increase retention.
4. Create milestones to reaching big goals.
Oftentimes, customer goals are big enough that they take a bit of time to achieve.
Create success stepping stones, and celebrate them on the journey there. Paint the bigger picture while providing clarity on the process that ensures goal achievement.
Many subscription onboarding processes use a progress bar to show the customer how far along they are in setting up their account. This can illustrate that they haven’t yet unlocked the full potential of a product, and hopefully motivates them to keep going until they get there.
Turning the larger onboarding process into smaller, more manageable steps or milestones makes things easier on new customers.
Ideally, set onboarding up in such a way that users can save progress and return to their stage later if they need to take a break.
Make sure each milestone is easily attained, accurately and early: this is the assured early success you are looking for. Celebrate these small wins, too—even simple firework graphics convey a sense of accomplishment at each step on the way to “aha!”
5. Gather the data you need, but only when you need it.
Sharing sensitive data early in a business relationship can be intimidating.
If possible, allow customers to build trust in your product before requiring them to enter personal or financial information—even if through a free trial. If certain data isn’t absolutely necessary to the operation of the product, don’t ask for it until it is. This smooths early relationship-building.
There are also other ways to gather data which are less demanding of customers, including:
- website analytics
- purchase intent tracking
- in-app navigations, and more.
These can all provide information without the customer doing any perceivable work on their part. This information can help shape your understanding of the onboarding experience and improve it.
Take behavioral analytics, for example. By tracking the user experience, behavioral data reveals what works well and what doesn’t within a digital product.
Knowing what users click, where they get stuck, and how they react to feature changes enables product developers to adjust the onboarding process to smooth over friction points and personalize the journey for individual customers based on preferences.
By defining and adjusting the most desirable journey, businesses benefit from an optimized onboarding process that leads to expedited first success for customers.
6. Provide a tour, walkthrough, or video.
A tour or walkthrough highlights the most basic and popular functions of a product, showing users exactly where to click to work toward goals.
Overlay tours highlighting main functions can create a high early-success-rate. If possible, personalize this stage to each customer, using feature callouts based on their goal. The more clearly you can illustrate how your product solves their problem quickly and easily, the better.
A “getting started” video can also help achieve this goal. People turn to YouTube for instructional videos for a reason: they work.
According to video company Wyzowl, 72% of people prefer video over text to learn about a product or service. Providing a quick video on how to use your product can help smooth over the onboarding experience and pave the path to user success.
The trick here is to not overdo it: there’s no need to show new users every little detail about how to work the product.
- Get some basic tasks in
- Let customers explore for themselves
- Have a help feature prominently available for their questions
7. Highlight solutions and best features.
A tour or video is a great chance to show off your SaaS product features, but it shouldn’t stop there. Seeing functionality in action helps customers visualize their own “aha moments”.
Just as new users receive a “welcome” message or e-mail, a product should welcome new users in a way that highlights impressive features.
Leave no initially visible feature unused; fill empty states with examples that demonstrate functionality.
Your customer’s first experience with your product should be as impressive as the messaging that drew them to make a purchase with you in the first place. Meet those expectations by showing up front what their new purchase is capable of.
8. Remember that it’s about relationship.
The best thing your team can do is anticipate questions based on user profiles and stated goals, and try to head those issues off. Ultimately, however, unexpected challenges will still arise.
Use chatbots and customer support knowledge bases to encourage users to reach out when needed. And if resources allow it, check-in during the onboarding process to ask how it’s going. A personal touch can go a long way, and continual engagement keeps customers from falling to the wayside and churning out before their first success.
SaaS business success is all about maintaining an ongoing relationship with customers.
Have support ready to help during onboarding, and add personal touches where possible based on customers’ unique goals. The sale has already been made—now you need to establish a connection that will last.
Follow up, reach out, interact, and you’ll build a rapport with your customers that will keep them from churning.
9. Test and reinvent onboarding as necessary.
As Stax Bill’s Director of Customer Experience, I put myself through our customer onboarding when I started with the company to help get myself better acquainted with our product. This tactic is now used with each of our new customer success team members.
It helps everyone understands what customers go through during onboarding, enabling them to make informed decisions accordingly. It also provides new opportunities for feedback and improvement every time someone new on the team tries it out.
It can take some time to get the onboarding right for your unique SaaS product, and inevitably as soon as you do the market and product development mandate can force changes to the process.
The key to success is to stay flexible and to ask for feedback about your onboarding regularly so you can adjust for best results.
Optimize onboarding and reduce churn with customer success teams
If you didn’t notice, the main theme running through these tips is a focus on helping customers achieve “aha! moments” quickly.
Accommodate unique customer goals when possible for onboarding success and retention, but certainly keep resource demands in mind as you do.
To that end, paying attention to your customer success manager (CSM) and customer success team is very important.
A good CSM at a startup can develop close relationships with customers which translate to personalized onboarding and high retention. But as a business grows, that role can change.
With a focus on increasing monthly recurring revenue from each customer, onboarding becomes merely the first step toward revenue retention and growth through upselling and cross-selling.
When customers do churn out during onboarding, which will inevitably happen from time to time, ask why. This information can be used to prevent future churn.
Over time, a more informed onboarding process will improve retention and reduce churn.