TL;DR
- User onboarding is the process of introducing your app or product to new users. The main goal of onboarding is to help users experience the value of your product as soon as possible so they can have a good experience.
- At that point, onboarding KPIs and metrics help you measure the success of your onboarding process and reduce the turnover rate.
- It is important to analyze important KPIs and metrics during the onboarding phase to align with your business goals.
- To maximize the value of these metrics, integrate personalization into your onboarding program. UI elements like tooltips, checklists, and hotspots are good starting points. No-code onboarding softwares like UserGuiding can help you design custom onboarding flows.
1- Trial to Paid Conversion Rate
Free trials, also known as freemium, are probably the first touchpoint you establish. Trial users can experience the value of the product and in return, you can assess how effective your onboarding process is.
However, at some point, you need trial users to buy a paid plan and become active users. Depending on your onboarding program, the users will either choose to stay or leave and work with one of your competitors—lowering your trial to paid conversion rate.
You can estimate your trial to paid conversion rate by dividing the number of users who signed up for a trial period that is converted in a specific period of time by the number of freemium users signed up at that specific period of time and multiply the result by 100 to get a percentage.
Here's how it works:
Let's say that you have a total of 200 freemium users and 100 of them have converted after their trial period. In that case, your trial conversion rates are:
100/200 * 100=50%
2- Time-to-Value (TTV)
Time to Value (TTV) refers to the period of time the user takes to realize the expected value of your product or service. In other words, it is time a user spends to reach their "Aha! moment" and start getting the most value from your product.
The shorter Time-to-Value is, the faster the user will experience the true value of your product and the more successful your onboarding experience will be. If this metric shows you that users take too long to find the value of your service, then there must be friction in your onboarding flow that blocks the user from truly experiencing the full potential of your product.
Wise is an excellent example of TTV. You can see that users can convert their currencies and see the fees right away—the exact value it proposes.
In addition, Wise cleverly introduces its first onboarding step to users by encouraging them to engage with different types of transfers and including a clear call-to-action at the exact moment the user experiences the value.
3- User Engagement
Without engagement, no business can go very far in the sustainable growth trenches. There are too many competitors, too many details to keep track of, and so on.
What you need to do to retain users is keep them hooked to your product or service.
Engagement can come in various forms. You can measure all the interactions of users throughout their lifetime on your company, analyze their behaviors, track their session durations, and more. The key point is that if your onboarding process is thorough and simple, the users will commit to engagement more easily.
Therefore, when designing an onboarding process, consider omitting complex details and highlighting the essence of your product or service. You can always add additional details and features later when users are more familiar with your interface and functions.
4- Churn Rate
As one of the most common customer onboarding metrics, churn rate is surely notorious. This is because it actually shows you what you have been doing wrong.
Churn rate is a measure of the number of people who stop using your product at any given time. The higher the churn rate is, the more insufficient your onboarding is. That is why product managers or product teams, in general, are advised to keep an eye on the churn rate from the very first week, so you can avoid any problems the user may face and improve their overall experience over time.
Effective onboarding experiences help you minimize the churn rate as they indicate the areas needing improvement based on users' needs. If you want to calculate your churn rate, use this basic formula:
Churn Rate= (Customers at the beginning of the month - Customers at the end of the month) / Customers at the beginning of the month
Therefore, adjusting your onboarding steps and working closely with customer success teams is necessary to prevent churn before it happens.
5- User Feedback
We cannot imagine an effective onboarding process without valuable user feedback. Almost all your onboarding success depends on users and how they navigate this process. That is why you need to bring your top-notch work into the game.
Recently, I received an email from Frase, which I have been using for quite some time to improve my writing and hone my SEO skills. Here's the email:
Collecting feedback does not have to be a burdensome task. In fact, simply asking the user if they would recommend your product to their friends or colleague works perfectly fine. This numbered and simple scale is also known as the Net Pomoter Score (NPS).
Net Promoter Score (NPS) helps you achieve your business goals, but most importantly, shows the overall performance of your onboarding flow. You can also ask why they gave you a particular score and what you can do to improve their experience.
The answers will guide through evaluating your customer onboarding framework, working on onboarding material, and gaining healthy insights for onboarding performance.
6- User Onboarding Completion Rate
As a product manager, you have too many things on your plate, so it is important to streamline your company's user onboarding efforts. As one of the most valuable customer onboarding metrics, the user onboarding completion rate indicates how fast a user can start using your product without assistance. And if users do not complete their user onboarding process, it will be harder for you to retain them.
Each onboarding stage has different requirements and goals; therefore, integrating an onboarding checklist will save you time and keep the focus on users' demands.
Each user onboarding process can potentially create successful users only if you know how to order your onboarding materials and nudge users to take specific actions to experience the product's value as quickly as possible.
For example, UserGuiding helps you create and embed onboarding checklists without writing a single line of code. Using this step-by-step onboarding flow encourages users to take action and follow their progress, which creates a sense of achievement and translates into an increase in activation rates.
7- Customer Satisfaction Score (CSAT)
Customer Satisfaction Score (CSAT) is one of the key metrics that define onboarding success. It is essentially a measurement method of a user's satisfaction with a product, business, or entity. The post signup period, aka the onboarding phase, is where you deliver what you promised and secure a good Customer Satisfaction Score (CSAT).
If users fail to see the value of your product for themselves, you need to go back to the drawing board and go over your onboarding performance. The best way to gain valuable insights to calculate customer satisfaction is by conducting micro surveys and collecting feedback.
This metric also helps you anticipate which users are likely to stay or leave and you can use this data to improve your onboarding program by updating your materials or adding new steps to the process.
To calculate CSAT, simply divide the number of happy customers by the number of responses you've received, then multiply the result by 100.
8- Feature Adoption Rate
Feature adoption rate is the percentage of new users who use a feature on your app or service. Feature adoption rate gives you information about the state of a user; therefore, it is one of the key onboarding metrics that is user-centric, instead of product-centric. You can receive actionable insights as this metric detects which features are user favorites.
If a certain feature is not used as much as the others, then users don't find it very valuable or helpful for their problems. If the number of features customers don't often use increases, then they are probably on the verge of churning. Monitoring this metric closely and stepping in when adoption rates decrease prevents the churn before it takes place.
You can also tailor your customer onboarding process to highlight the product's primary features. As the users interact with the tools and features you offer, you can then show tooltips and hotspots to build momentum to convert users into super fans of your product.
9- Retention
The retention rate is the backbone of a business. Recurring customers make up a good chunk of your revenue (and your company's health), which is why a customer onboarding process should answer all the questions a customer might have and strive to clear all the problems that might lead them to leave.
While working on your onboarding phase, keep in mind to include essential information and clear instructions, do not make your interface overcrowded with multiple tooltips, video pop-ups, and feedback surveys on the screen. Try to engage customers with clear CTAs and easy-to-follow actions.
One thing to focus on as you work on your retention is to keep an eye on the short-term customer retention rates. It is crucial to retain the users during the first week or month. Analyze short-term retention rates to understand which users stay and why they are staying.
To calculate the retention rate, use this formula:
Retention Rate= [(The total number of customers at the end of a specific period—day, week, month, etc. - the number of customers added within the period) / the total number of existing customers at the start of the period] x 100
10- Return on Investment (ROI)
Return on Investment (ROI) tells you whether the investment you made earned back after deducting the costs. In other words, ROI measures if the profit exceeds the costs. In terms of user onboarding success, the higher ROI indicates the efficiency of your strategy. To get an accurate measure of this metric, consulting customer teams will help.
You can calculate ROI by subtracting the cost of the investment from gross return and dividing the result by the cost of investment.
If you are struggling with maintaining a stable ROI, there might be underlying problems with your onboarding process. For instance, your average onboarding time might be too long, the customer onboarding checklist might be too complex, or the users might be having a negative onboarding experience due to a lack of personalization.
Whatever the reason is, you need to keep in touch with your team and initiate genuine conversations with customers to make up for the bad user onboarding experience they had. Keeping communication channels open, responding to users in a timely manner and implementing solutions as quickly as possible will prevent the decline of your onboarding effectiveness.
11- Average Response Time
Average response time is the average time you take to respond to a user after they report an issue. Compared to other onboarding KPIs, average response time involves more direct contact with users; therefore, it has a huge impact on user onboarding success as a whole. The longer the user waits, the higher their likelihood of churning is.
All of us are customers and we know how infuriating it feels when we encounter a problem, reach out to people, and hear from them after three days. On top of that, we wait by the computer and refresh the support page every hour, miraculously waiting for a response.
Live chatbots and resource centers replaced the old, slow response systems. Users can get immediate responses especially during the onboarding process where user expectations are high and patience is relatively low.
However, it is important to set the expectations right. If you cannot deliver a response within the time frame you set, it will be a huge turnoff for users.
12- Number of Tickets by New Users
Although closely related to average response time, the number of tickets created by users should be analyzed separately. This is because you will have to categorize each ticket into sub-categories. Some users might have a problem with speed; others may need help with features or payment. Therefore, the number of tickets by users covers your entire app or product.
So, how do you leverage these tickets to evaluate your onboarding phase?
First of all, getting many tickets from new users is already an alert that your onboarding flow might be unsuccessful. Each time the onboarding process fails to answer a question, users will create onboarding support tickets to solve these issues with you. It shows there is a considerable amount of friction between resources, training, and succession of steps to successfully onboard the user.
However, it is crucial to analyze what the tickets suggest. If the problem is with onboarding and not the product itself, you can go over each step and make user onboarding less of an ordeal.
13- Activation Rate
Activation rate is a measurement of the percentage of users who perform and complete a key action to experience the product's value. While the action points are predetermined by you, it is still important to track them to see if your onboarding flow is positioned well. This metric is also important for long-term retention and product adoption.
Some activation actions include:
- signing up and creating a profile
- starting a free trial
- upgrading to a paid plan
Ask users about the moment they started to love your product and match those moments with key actions, so you can see how optimized your onboarding flow is. If the activation happens quickly, the user will have more time to explore and love your product. Therefore, you must identify what activates your users and adjust your process.
To calculate the activation rate, divide the total number of users in the onboarding phase by the number of users who reached the activation point and multiply the result by 100 to get a percentage.
14- Number of Desired Actions Taken by a User
The number of desired actions taken by a user determines whether your onboarding has clear call-to-actions that facilitate activation and is clear enough for users to navigate. As the number of these completed actions increases, you will see that more users stick around to keep using your product or service.
Monitoring the average number of actions completed, when and where the users lose interest can deliver tons of action-driven insights for onboarding.
15- Upsell Rate
Upsell rate refers to selling a higher package to an existing user. This metric measures the percentage of upsell attempts that have been successful. Although upselling is directed at already existing users, it is one of those productivity metrics that tell two important things about your onboarding flow:
- Users trusted your onboarding during their first experience and you did not let them down
- Users still trust you and believe that the additional benefits and features of their new package will be covered effectively during their onboarding period
You can calculate your upsell rate by dividing the total attempts at upselling during a specific period by the total number of successful upsells you made during that period and multiply the result by 100 to get a percentage.
Final Words
In short, a comprehensive onboarding method cannot be separated from the metrics that define its success. To keep customers happy and successful, you must keep track of KPIs like activation rate, retention, churn, customer satisfaction score, and so on. Prioritizing users' needs and taking necessary actions to improve the overall experience can do wonders for your user onboarding flow.
