3 Common Product-Led Onboarding™️ Myths Busted

This is an excerpt of a new book I’ve written with Wes Bush called Product-Led Onboarding™: How to Turn New Users into Lifelong Customers. You can buy it now!

User onboarding - some consider it as a quick product tour, a popup, along with a few emails aimed at new users. Others view it as just teaching new users how to use a product. Many believe it’s not required at all, and users should be free to explore the product themselves. 

That’s the problem with this term. It has vague and varying definitions – even to people in the same company. How are you supposed to have great user onboarding if your team isn't on the same page about it? 

In this post, learn what user onboarding isn’t by busting three common onboarding myths. I'll also share how we define user onboarding at ProductLed.

Myth #1: The goal of user onboarding is for someone to experience that first “Aha” moment.

You can’t bring up user onboarding without bringing up the term “Aha” moment. It’s this magical moment for new users when the clouds open and a realization hits them like a gorgeous ray of sunshine from the heavens. 

“Ah, I now understand what your product does and how it can help solve my problem.” All of a sudden, everything just clicks.

The “Aha” moment is the holy grail of Product-Led Onboarding™️… or is it?

If you think the first “Aha” moment happens after users sign up, then it usually means you’ve lost a lot of people already. Because the majority of users never actually make it that far. 

These “Aha moments'' start at the first touchpoint. A touchpoint occurs whenever users interact with a brand. Often, the first touchpoint occurs outside of a website, 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.

Maybe it’s watching a video of Dropbox in action when it first came out: “Wait a second, I drag my files into one folder and they’re automatically on all my devices?¨

Or seeing a social ad from Netflix: “Hold on, I can watch any movie for one flat fee every month? Plus, I don’t have to go to the video store or deal with late fees?”

Or hearing from a friend how 1password works: “So you’re telling me I can have those fancy, super-secure passwords with those funny symbols for each of my logins… and I don’t have to remember any of them?”

But user onboarding doesn’t stop at the first touchpoint.

Successful users go through a series of “Aha” moments before, during, and after they sign up for a product. With each “Aha” moment, users receive increasing value from a product in a series of steps; they jump to a higher value as they perceive and experience a product’s capabilities.

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. The implication is that the user onboarding experience starts before users even sign up for your product, which leads to the second user onboarding myth.

Myth #2: User onboarding starts after a user signs up for a product.

When Dave McClure came up with the Pirate Metrics Framework, it provided an easy way to categorize the user journey in five steps: Acquisition, Activation, Revenue, Retention, and Referral—AARRR for short (...like a pirate. Pirate metrics, get it?). 

In this framework, the first touchpoints with users are part of the Acquisition Step. In this step, the marketing or sales teams work to increase awareness, traffic, and signups for a product. It’s also when users form their first impression.

Many assume that user onboarding fits into the Activation Step – when new users interact with a product for the first time. From here, it’s usually the customer success team’s job to guide users through to discover the value of the product.

The problem with this definition is that it dismisses the Acquisition Step’s critical role in user onboarding. 

For instance, if a product offers video hosting, but people sign up thinking it’s a video marketing agency, they’re doomed from the start — no product tour, in-app messages, or other onboarding tactics can save that. 

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. 

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. By screening out people who shouldn’t be signing up for a product early on, you’ll be able to focus more time and resources on providing incredible experiences for people who should be using it.

Going back to the Pirate Metrics Framework, we can now assess user onboarding crosses over both the Acquisition and Activation Steps. The next question is, when does user onboarding end?

Myth #3: User onboarding ends after a user becomes a paying customer.

Another common misconception is that Product-Led Onboarding™️ ends the moment they become a paying customer. The problem with this notion is users could be paying for a product even though they’re not getting any value from it.

Think about all the products or services you’re currently paying for that you don’t end up using. It could be a gym membership you signed up for in January (thanks, New Year’s resolution!). Or that Disney+ subscription you’ve already forgotten about after watching your favorite Disney Classic or Star Wars movie.

But paying users are not the same as successfully onboarded users:

The lesson here is to be careful: don’t assume a paying customer equates to a happy customer. For subscription businesses like SaaS, you know you´ve encountered this problem if you see a high volume of new, paying customers cancel their account soon after their first payment.

So, when does user onboarding end if it’s not when users become paying customers?

Some argue (me included) that user onboarding never actually ends. As new users complete the initial onboarding and become regular users, the onboarding team can (and should) help them adopt new capabilities and use cases of a product. I’ll discuss this later in this chapter.

But for now, let’s focus on the initial onboarding experience for new users. To answer this, let’s take a look at Slack, a channel-based messaging platform that helps teams work together more effectively. 

How do you think Slack defines a successfully onboarded user or team?

You might assume it’s the first time someone signs up and sends a message. Others might expect it’s when ten people have joined the same Slack channel. Or perhaps it’s more complicated: when 11 people have joined the same channel and sent 100 messages.

But here's how Slack defines a successfully onboarded team:

For Slack, a team is not successfully onboarded until they’ve sent not one, not 10, but 2,000 messages. It’s at this threshold where they’ve found the teams who continue using Slack going forward.

Of course, acquiring a new paying customer is fantastic. But you can’t build a successful business on one-off customers; they need to keep coming back. Considering it costs up to five times more to acquire new customers than to retain them, you should work on increasing customer retention. Even by a small amount, say 5%, can boost profit anywhere from 25 to 95%.

For this reason, the end goal of user onboarding is not only to convert users into paying customers but to make sure they stick around for a long time. 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 it.

So if we go back to the Pirate Metrics Framework, user onboarding bridges the Acquisition and Activation Steps and leads into the Retention Step. 

What Is User Onboarding?

Now that we have a better picture of what user onboarding is not, let’s define what user onboarding is:

User onboarding is the process that takes people from perceiving, experiencing, and adopting the value of a product to improve their lives.

There are three important implications of this definition.

Implication #1: The End Goal of Onboarding 

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.

For example, people consume Netflix not because they enjoy streaming videos. They watch it because it relaxes them after a long day at the office. 

People adopt Slack not because they need another messaging tool (we already have a ton of those). It’s because it helps them share knowledge, resources, and information effectively within a team, all while cutting back on email.

Samuel Hulick, a UX strategy consultant and founder of useronboard.com, uses Super Mario Bros. to visualize this concept. As a kid playing Super Mario Bros., you’re not excited about a fire flower because it has a green stem, and it’s easy to pick up. It’s because once you pick it, you become a fireball-shooting Super Mario. 

In the same way, user onboarding shouldn’t focus on the product (the fire flower) and its characteristics (green stem and easy to pick up)... even though they are important. 

How are you helping enhance users’ lives with your product? Are you helping them relax like Netflix, or communicating within teams like Slack? Whatever it is, user onboarding is a means to get there.

Implication #2: User Onboarding Has Three Main Milestones

To successfully onboard new users to a product, they have to achieve three key milestones:

1. 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. 

2. The Moment of Value Realization (MVR): This is when users first experience a product’s value.
   
3. The Moment of Value Adoption (MVA): This is when users start using a product regularly and integrate it into their life or workflow. 

Notice how these milestones align with the “Aha” moments mentioned earlier. That’s why “Aha” moments can also be referred to as value moments. Together, these value moments form a value path. 

Here’s what Slack’s value path looks like:

• Moment of Value Perception: Users first grasp how Slack can help their team communicate and share information more efficiently than email or other messaging tools.
• Moment of Value Experience: Users send their first message to a colleague using Slack.
• Moment of Value Adoption: Users from the same team send 2,000 messages.

Some would argue that user onboarding is only about helping users experience the value of a product. I’d argue that this is often not enough. Experiencing the value of a product once does not mean new users will continue using it.

Think about it for a second. Let’s say you want to take up daily running in the morning every day so you can stay fit, feel healthy, and have more energy for your day. That first-morning run, you experience a runner's high–a brief, deeply relaxing state of euphoria. But the next day, your body is in pain, and you sort of feel like a troll, dragging your body around from one place to the other. But, the more often you run, the easier it becomes. Soon, it’s a habit. 

The lesson here is that doing something once is not enough to build a habit. The first time you do it, you might decide that it’s not for you. Or maybe it’s too hard, and you don’t think it’s worth it. But if you do a behavior or activity enough times, it becomes easier and comes naturally without much prompting or reminder. Habits are built through repetition.

Similarly, one of the big goals of onboarding is helping users let go of the old way they performed tasks to embrace new habits with a product. Habit-forming user onboarding experiences require users to experience the value of a product more than once. Once new users have used the product enough times, they’re more likely to continue using it going forward.

This is the reason why Slack defines a successfully onboarded team once they’ve sent 2,000 messages. 

Implication #3: User Onboarding is A Cyclical Process 

The final implication is that user onboarding is a process. It involves a series of actions that uses both tools and people to provide new users the knowledge, skills, and behaviors to interact with a product effectively. 

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

After the initial onboarding experience for new users, they can (and should) go through a new cycle of perceiving, realizing, and adopting additional features, capabilities, or use cases of your product. 

Much like a flywheel, gaining momentum to start requires a considerable effort. New users have to overcome friction, such as letting go of old habits or moving past the anxiety of change. But once users complete each cycle of perceiving, experiencing, and adopting, they achieve an increasing level of value over time.

Let’s look at how this is done with Intercom, a messaging platform that allows businesses to communicate with prospective and existing customers online.

Here’s what a user journey could look like with them:

1. The initial onboarding cycle helps companies install live chat software on their website. This speeds up their acquisition time because they can respond to queries from prospects in real-time as visitors are surfing through pages. 
2. Once users have started regularly using Intercom’s live chat feature, the onboarding team helps users add smart logic that directs conversations to relevant help articles or blog posts. 
3. The next level helps companies automate conversations using chatbots.

With this example, the Intercom onboarding team assists users by providing more value over time. What’s even more important is that they’re encouraging users to upgrade their pricing tier: from $39 to $499 per month.

As you can see, onboarding customers to additional capabilities and use cases of a product is critical for revenue expansion and increasing the average revenue per user (also known as ARPU). But first, new users need to complete the initial onboarding.

The Initial Onboarding

Like with any flywheel, getting it going requires overcoming friction and inertia. 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.

This is an excerpt of a new book I’ve written with Wes Bush called Product-Led Onboarding™: How to Turn New Users into Lifelong Customers. You can buy it now!