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April 13, 2022

As a business owner, you want to ensure that your customers are happy with your product. The best way to do this is by paying attention to onboarding KPIs.

Onboarding KPIs Explained

For SaaS businesses, the onboarding process (post-signup period) is a crucial stage where customers have to find product value quickly so they continue to subscribe beyond the trial period.

Let’s look at the numbers:

  • Over 90% of customers feel that the companies could do better when it comes to onboarding.
  • 63% of customers say that the level of support they’re likely to receive after signing up is an important consideration when deciding to buy an app.
  • 55% say they have returned a product that they did not know how to use.

If your onboarding experience isn’t top-notch, customers are likely to churn. Make sure you track and measure your onboarding KPIs to improve customer satisfaction and retention.

By tracking your onboarding efforts, you’ll be able to measure your success rate, which will allow you to improve customer service, customer retention, and lifetime value (LTV).

Onboarding can help you figure out which of your customers are most likely to stay and tailor the way you approach them.

After you’ve closed a sale, you need to prove to your new clients that your product is the best one out there.

Onboarding is a tricky process. Between different handoffs, email sequences, and kickoff meetings, it can be difficult to know what works, where users are getting stuck, and how to best address those pain points.

Customer onboarding metrics are the best way to assess and improve your customer’s onboarding experience. By tracking these metrics, you can identify areas where your customer’s experience could be improved.

Additionally, by monitoring these metrics over time, you can see how your customer’s experience changes as they move through their lifecycle.

In this blog post, we’re going to cover 16 key performance metrics for optimizing your user’s onboarding experience. We’ll share tips on how to track them and the tools you can use to do so.

1. Logo Retention

Customer retention rates measure how well your company can hold on to customers.

86% of consumers say they’d remain loyal if a company invested in welcoming, informative, and educational material.

When you focus on providing great customer support, by addressing their specific needs and answering their questions, your customers will stay with you.

2. Onboarding Revenue

Another important onboarding metrics to track is revenue. Are you upselling enough to make money?

One way to track sales is by calculating your Net Revenue Retention. This tells you what percentage of your revenue from existing clients is remaining after a certain period.

Find out how much impact your upsells and cross-sells have on your users, as well as what would happen to your company if you didn’t acquire any more new customers.

You can calculate this metric on a cohort level, allowing you to see which groups provide the most value to your company.

Onboarding programs are essential to increasing sales because they help your customers learn how to use your product to its full potential. By helping your clients achieve the results they want, you can encourage repeat business.

3. Time to Value

Time to Value (TTV) is the amount of time it takes for your customers to start benefiting from your app.

What is the definition of value for your customers? Is it creating their very first automated email or sending 25 different invoices? No matter what you consider to be valuable, your customer has to feel as though they have received that from your product or service.

A low TTV means you are successfully guiding them towards their “aha!” moments faster, and your customers will be able to get the most out of the product and see its potential.

In contrast, a high TTV means your customers are frustrated with the product. Perhaps your users aren’t getting the results they expected, or they’re having trouble using the product.

The solution to this issue? Create a customer onboarding plan to educate users on your product and showcase its value right from the start.

4. Completion Rate

On-boarding completion rate refers to the percent of customers that finish the onboarding process.

You want your completion rate to be high, so businesses use a variety of different metrics and methods to track whether a customer makes it from one step to the next.

To get an accurate benchmark of your onboarding process completion rate, calculate the average rate and then compare it to how it changes after you make adjustments. A low completion rate may indicate that your process is too long or complicated.

Keep a checklist of what needs to be done to help customers finish setup and move on to using your product or service.

A checklist is an essential tool for breaking down complex onboarding processes into manageable steps. This helps customer success teams avoid missing steps, and ensures buy-in from customers.

5. Customer Call Drop-Offs

How fast do your customers typically answer your onboarding calls? Do they usually answer the phone right away, or do they sometimes let the phone ring?

In an increasingly digital landscape, phone calls are more important than ever. Onboarding conversations need to be short and to the point — a rambling conversation is a quick way to lose a prospect.

If you want to avoid high dropoff rates, make sure to provide valuable info during the conversation. Make sure you’re clear on the goal of your call, and that you give your customers all the information they need to take the next action. Having a checklist of things to cover can help you stay on track.

Don’t rely on a script too much. Focus on what the customer’s specific goal is, and what you need to improve on.

6. Free to Paid Conversions and Monthly to Annual Conversions

A conversion from a free to a paying customer should be the go-to benchmark for a software-as-a-service company.

For a SaaS company, this might look like three different trial offers:

  • Freemium: The basic app is free but customers can pay to access advanced features.
  • Free trial without a credit card: Customers can try your product without sharing payment details.
  • Free trial with a credit card: Customers can try your product but only if they submit payment details.

Giving users a free trial or a free plan allows them to try out your product before they buy it. This could potentially shorten the TTV and increase product adoption.

Depending on your business model, you might want to track your conversion rate from monthly to annual.

Annual contracts are a great way to predictably increase revenue.

7. Total Contract Value

The total value of the customer’s contracts is the total sum of all payments that the customer makes. This also includes any initial or setup costs that may be associated with the contract. By knowing this, you can better understand the health of your company.

Total Contracted Volume (TCV) is a data-driven approach, using actual sales numbers to predict future sales and revenue growth.

It relies on actual contracts, so you can’t use it for monthly subscriptions because there won’t be any fixed terms.

While it’s not perfect, it’s useful to see which customers generate the most revenue and which don’t. You can focus your resources on the customers who need them the most.

With a good customer success team, you can maximize each of your segments’ lifetime value.

8. Desired Actions Taken

The more active your new users take on your platform, the less likely they are to churn. Your user onboarding should drive these actions, such as following all steps to set up a new profile in your software.

What if we looked at the average number of times customers completed certain actions and where they dropped off? We could learn a lot about customer experience from that.

9. Time to Desired Action

This metric is important because your onboarding flow is how you welcome new subscribers and this reflects how successful your onboarding is.

For example, your profile setup takes an average of 9 days to complete but switching to a better onboarding tool cuts that down to 3 days.

It’s important to get customers engaged with your product as quickly as possible so they don’t have time to look at competitor products.

10. Feature Adoption Rates

There are several different ways that companies measure the adoption of new features.

  • A customer encountered the feature but didn’t use it
  • A customer tried the feature once
  • A customer tried the feature at least two times

The general idea is that the user found a specific feature they liked and used it, and if they start doing that regularly then they have “adopted” it.

The adoption rate of any feature can be calculated with the following formula:

Feature adoption rate (%) = (Number of new users of a specific feature / Total number of product users) x 100

Your feature adoption rate is a measure of how well your new customers can discover and use your new tool. It can tell you whether you’re doing a good enough job of explaining your features, or if your features are intuitive enough.

If you want to keep your customers around and reduce your churn rate, then you need to have a high adoption rate for your product features. Customers are more likely to stay if they’re getting a lot of great features from your product or service, so make sure they’re easy to find and use.

11. Percent of Sign-Ups That Complete Onboarding

This is very similar to onboarding completion rates, but there’s a key difference. This measures what percentage of your customers receive any type of onboarding.

It’s important to have a goal of 100% of sign-ups getting through your onboarding process, but the reality is that you likely won’t get there.

It’s not because your onboarding process is awful. The percentage that goes through it is more of a vanity metric.

Some customers will never participate in onboarding due to factors such as learning style and product familiarity.

The true value of this KPI is that it will force you (and your sales reps) to do 3 critical things:

  • Know which customers are completing your onboard process and why.
  • Help your customers with every step of their journey, from signing up to purchasing to using your product.
  • Try to get as many new customers through onboarding as possible. Once you’ve identified the types of customers who won’t go through it, you can focus on those types of people.

12. Logins to Your Tool

While it’s true that more logins could mean more engagement, you shouldn’t take the number of user sessions as a measure of true adoption.

Maybe your new customers struggle more with completing their assigned tasks after signing up.

Another way you can qualify your data is by comparing it against these other key performance indicators, such as time to value, the percent of users who complete your onboarding, and average user sessions. This can help you identify areas that need improving.

13. Active User Count

How many of your clients use your product or service? User activity, or active usage, is a measure of how many people log into your platform on a weekly or monthly basis.

Your company can define sessions based on the length of time a user is logged into your app, which pages they visit, and other variables. This will help you get a better picture of how many users are actually active.

Tracking your active user base is a simple way to identify which users are at risk of churning. By monitoring your number of daily, weekly, and monthly active users, you can spot trends early and take action before you lose a customer.

When you have a good customer success team, you’re providing customers with everything they need to understand your product. That way, when they start using it, they can start reaching their business objectives much more quickly. And, as a bonus, they’re much less likely to be churning because you’re getting value out of the product.

14. Session Time or Length

How long are your customers spending time using your product?

When it comes to user sessions, companies can be very successful whether their average sessions are long or short.

If customers spend less time using your product during sessions, it could mean that they’re becoming more efficient and more productive. By tracking this, you can make adjustments to your onboarding process to improve engagement.

As you adjust the length of your sessions, it’s crucial to keep an eye on how long your sessions are.

15. Number of Support Tickets

Are you getting tons of questions from customers? Are you having trouble getting them onboarded?

The volume of support requests your customer support team handles can indicate several things.

Product knowledge, lack of proper training, and unrealistic expectations about a product are all possible reasons why a prospect may hang up on you.

If you want more users to reach out to you for support, try creating a knowledge base and including more tutorials, FAQs, and documentation resources. This can help your users find what they need and cut down on the number of requests you receive.

These should be easy for anyone to understand and navigate through, no matter their level of technical savvy.

16. Customer Satisfaction Feedback

Getting customer feedback is important. You can find out how well your users are enjoying your service by asking them about their experience with it. You can find out what they found valuable, and what you can do to improve their overall satisfaction.

You can gather customer feedback quickly and easily with post onboarding and purchase survey. This data can be used to improve the user experience and grow your business.

Asking the most important questions first will motivate your customers to answer most or all of the questionnaire. Offering incentives, such as prizes, discounts, or exclusive information, will increase your response rate.

This one simple step will help you gather a ton of information, and it will help you figure out what changes need to be made to your process.

Best Practices for Customer Onboarding

While tracking the metric for your customer’s onboard process is important, taking actions to improve the process is even more important.

There are various measures you can take to optimize your onboarding process.

Standardize Your Onboarding Process

All your new clients should follow the same procedures. This will make it simple for you to track which procedures are effective and which ones need to be improved.

If your efforts aren’t consistent, then you won’t know what areas need improving.

Add a Human Touch

Onboarding isn’t just about setting up customers on your product. It’s a time to build lasting relationships, even over a lifetime.

Pay More Attention

When working with new clients, you might be following either the high-touch or the tech-touch model for engaging them. Whichever one you use, be aware that these customers require more of your attention during the initial stages.

While you will need to spend more time initially, you can scale back your involvement as your team grows.

Conclusion

Overall, paying attention to key performance indicators is a great way to ensure that your customers are happy. By focusing on onboarding KPIs, you can get a better understanding of how well customers are adopting your product and if any areas need improvement.

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