Product Monetization

User Onboarding Ends Where Revenue Begins: How Data Can Take You There

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A successful onboarding process will effectively drive users from the homepage of your site to the delivery of the promise or value they are looking to receive. In today’s talk, we will explore how to define the promise of your product or app, the steps your users will flow through to experience your promise, examine skillful onboarding processes in action, and identify how to to utilize data to increase the chances of converting onboarded users into paying customers.

Claudiu Murariu:
Hello, and welcome to this new edition of the ProductLed Summit. It's an honor to speak here again, especially as I will be covering a topic that has been the core of my research for the last four years, user onboarding. My name is Claudiu Murariu and I'm the co-founder of InnerTrends, a data science platform for product teams. At InnerTrends we analyzed millions of users during the onboarding process for various SaaS businesses, B2B, and B2C. What I'll be presenting today is the results of all the research we've done around analyzing those users, on how we define the onboarding process, how we prioritize it and how we optimize it.

Claudiu Murariu:
So let's get started, but first let's see who this presentation is for. This presentation is for SaaS businesses with a self service onboarding process. Be it just in part or fully self-service. We will help this businesses define the onboarding process in the right way. It is for the product and the growth leadership in those companies, especially as we will help them establish very clear goals and also for all their team members in getting them aligned.

Claudiu Murariu:
The user onboarding is not a process that sits by itself. It's part of a bigger picture of what we call actionable metrics. The five actionable metrics that we always look at are acquisition, activation or onboarding, revenue, retention and referral. Onboarding is about activation. How do users get to first value? That is what we are going to be covering today. We will have three sections in the presentation, how to define the onboarding process, the second section will be why is it important to define it right and how to optimize and prioritize don't boarding process.

Claudiu Murariu:
Let's start with the first one. Define the onboarding process. Many people or many companies call it the wow moment, the aha moment. These are abstract names. They sound good. They sound sexy, but they are very abstract. And as we don't have microphones in people's computers to listen when they go, wow, aha. In order to say they're onboarded or not, we need to have much more structured way in getting to define what the onboarding process is.

Claudiu Murariu:
But first let's look at what onboarding process is not, because today I will not be speaking about email sequences, video tutorials, checklist, product tours, in-app guides, wizards as all these are tactics that you use in order to get your users onboarded. But they are only helpful if you define that onboarding process the right way, because otherwise you use them to lead them in different directions. Also, I will not be speaking today about how to use data in order to define your onboarding process, because we truly believe that's the wrong way to do it. The definition of your onboarding process does not stay in the data. You use the data to optimize, to understand what's happening in the onboarding process, but you need to tell the data where the boarding process starts and where it ends.

Claudiu Murariu:
At InnerTrends, we define the onboarding process as the process that people go through from the moment of signing up to the moment of experiencing the promise of your product for the first time. The reason for this is because somebody that did not experience the promise of your product has no reason to upgrade to a paid plan or to return to use your product. Also, somebody that didn't experience the promise of your product, doesn't really know what your product is doing. They might have an idea from your marketing materials but they never experienced it themselves. They think they know, they don't know.

Claudiu Murariu:
Another important aspect here is that the promise can be delivered when the user is online or when the user is offline. Often for so many companies out there, the onboarding process finishes when the user is not in front of his computer or inside your product. We'll actually go through a couple of examples. So let's look a bit at the onboarding flow. Somebody comes to your website and they discover your product. They get to see, to experience, sorry. They get to see the promise of your product for the first time. When they believe in it, they say, "oh, this sounds interesting, it's something that I might need." They show up intent and they go to the registration page or to the pricing to learn more and so on. The next stage for them is to create an account. After they create an account, everything they want to do is to get to that promise that you made on your home website as quickly as possible.

Claudiu Murariu:
When you ask how many of your new accounts experienced the promise of your product for the first time, you are actually asking how many onboarded users you have. And if you don't know the answer for this question, you don't know how many users are onboarded. Do you know how many people experienced the promise of your product for the first time? But what is the promise? How do we define it? Well, you already did that. It's your unique selling proposition, it's the title of your sales decks. What stands on your landing pages, is on your ads, on your homepage, the big title, big heading. The challenge here is how do you convert all that marketing talk into a clear definition of one action or a series of actions that people need to do in order to experience that promise.

Claudiu Murariu:
We'll actually go for a couple of examples and do this exercise. So you can use that as an example inside your own company. Front is a well-known SaaS product that has shared inboxing. Multiple people can go inside this product and reply to emails and share email addresses. And this actually is their home page from a couple of months ago. Their promise states, 'Great work starts in your inbox. Front is the first inbox for teams organized where the conversations in one place with them to the right people and get more done as a team.'

Claudiu Murariu:
So after reading this, I understand that first, this product is for a team, so it's not only for one person. If I am to be onboarded, I need to have at least another person, another team member joining. Second is about working on conversations. So basically it's not enough for somebody to join, they also need to work together with me, to collaborate on a conversation. So onboarding would finish after two team members get to collaborate in a conversation. Because this is what it's promising and I say, "oh, I can collaborate a conversation with this product, it's so cool." If this is my plan once I create an account, I will be onboarded when I manage to get there to invite somebody from my team and collaborate with them on a conversation.

Claudiu Murariu:
Now, this is the Front homepage today, 'keep your team aligned with your customers. Front is the modern workplace communication platform, whether you're remote or in office Front enables your team to do their best work. So you can create an experience your customers would never forget.' Very different promise. So now I understand that in order to get to the promise, I need to work with a team member on a customer ticket. So if before I would come in and say, "hey, I can share an email address with somebody from my team." It might be for support tickets, but it might be for social media management.

Claudiu Murariu:
Today, it's clear that it's only about managing customer requests, so more of a support platform. Now in the case of Front, because the promise changed, the onboarding definition changed. Today the onboarding definition is get two team members to collaborate for the first time on a ticket that they receive from a customer. So three things need to happen for somebody to be onboarded. They need to receive a ticket from a customer and they need to have at least another team member working on that ticket. That's when somebody is onboarded in the case of Front.

Claudiu Murariu:
Let's go to another example. I love this example that not many companies out there, when you go to the homepage and directly from the main header, you know exactly what is going to happen the moment you create an account. 'Capture and share instantly.' My expectation is that after I click download free, I'm going to get that product. I am going to be able to capture a screenshot or a video then I'm going to send it to a colleague. That's what my expectation is. And if that onboarding process will take me through these steps, most likely the onboarding rate or this company will be very, very high. Because the onboarding process needs to match the expectations you make to users with your marketing promises.

Claudiu Murariu:
Let's go to another example. Another one that I love very, very much. This is the homepage of PandaDoc from a couple of months ago. 'Sales documents that close. Simplify the process to create, send, track and eSign sales documents.' The reason I love this promise is because it not only tells me what it is going to take in order to finish the onboarding process, it also tells me what are the steps that needs to be taken to get there. Me as a user coming to this website, I understand, oh, I'm going to try it free. I'm going to create a sales doc. I'm going to send it to someone. PandaDoc is going to track it for me and they will be able to sign it. These are the expectations that I made by reading this heading. And if those expectations will be met most likely there'll be an onboarded user.

Claudiu Murariu:
However, PandaDoc changed this to this, 'crush your quota from propose to close. Sales teams, use PandaDoc to improve deal workflow, insights, and speed while delivering an amazing buying experience.' Now, this sounds much sexier. So this here is very clear what is this going to happen, this here is more about emotion, crush your quota.

Claudiu Murariu:
The problem here is that this seems like very appealing promise. So might get more people to want to sign up. But what are the expectations of those people after reading this? Is it possible that they understand that PandaDoc is a completely different product that will help them get more leads in order to crush their quota? So they can send proposals? The problem I see here is often that marketing departments own the website and their goal is to get more people to sign up. And how do they do that by AB testing different promises and messages. However, different promises and messages make different expectations. So you might get more people to sign up, but your onboarding rate might go down. That is why I always advise marketing teams to not look only at the accounts that are created, but the accounts that are onboarded because only that confirms that they set up the right expectations with the right message. And they were sexy enough to appeal more people to sign up.

Claudiu Murariu:
After you go through such an exercise, the next step is to ask, what are the mandatory steps that people need to go through in order to get to that promise of your product? And voila you have your onboarding funnel. And in your onboarding funnel that there one major element that you want to pay attention to. Where do you have your biggest drop off, is it at the top of the funnel, which means you have a promise issue. You made a promise, people signed up and they expected something very different when they got there. Or if your drop-off is towards the end of the onboarding process, you have a product problem. Like you qualify people, they went step by step. It was clear for them, but maybe the work was too much. Maybe you are asking too much. Maybe things are not clear. It's crucial to answer this question before you go into any optimization stage. Where do people drop off in the onboarding process? In the beginning where you have quantification problem or towards the end where you have a product problem.

Claudiu Murariu:
So let's go to the next section of our presentation which is, what is the impact of a good onboarding process? Because revenue starts where onboarding ends. People that are not onboarded don't really have a reason to buy your product.

Claudiu Murariu:
First, let's look at retention and the relationship between onboarding and retention. Now, most companies I know out there, I talked with. When they talk about retention, they look at the cohorts of the new accounts that are created. So how many accounts get created in a typical month and out of them, how many return week by week or month by month. And we believe that's the wrong way to look at retention. Here we have two retention curves, the retention of the people that finished the onboarding process and the retention of people that did not finish the onboarding process.

Claudiu Murariu:
When you report retention to new accounts, you actually get an average of these two curves, which are not an accurate image of your real retention. People that are not onboarded, have no reason to return and use your product. Your real retention is the retention or of your onboarded accounts. So often companies come to us and say, we have a retention problem. Our retention is so low, it's 5%, something is wrong. After I show them this data, they realize they don't have a retention problem. Their retention is actually great, but only 20% of their users end up onboarded. That's why the retention looks that bad when they look at it as the retention of the new accounts. But now at least they know what we need to fix in order to get more people as customers.

Claudiu Murariu:
And talking about customers, we always report the conversion rate from creating an account to upgrading to a paid plan by looking also at the onboarding data. Here we have under 369 people creating the account, 173 of them got onboarded, 78 upgraded to a paid plan after onboarding. So the vast majority, more than 75% of the users upgraded after onboarding. 14 upgraded before onboarding, but they still onboarded. And we have free for less than 2% of all the people that paid, did without finishing the onboarding process. That's how important is the onboarding process on getting people to pay. And even more, these free users, I will bet with you that they will change the next two months, because they never got any value from your product. They never got to the promise of your product. So the easiest thing you can do to optimize churn is actually drill down on those three users, find out who they are, call them and help them finish the onboarding process. They already paid. All you need to do is help them and you will decrease the chances that they will churn in the next two months.

Claudiu Murariu:
Let's go to the next section, which is prioritize and optimize the onboarding process, because as we've just seen your growth depends on it.

Claudiu Murariu:
The first thing is about prioritization. So we want to make sure that we optimize the process where we lose most users. So there are four processes that we analyze. Accusation, how many people visit the website? How many initiated signups or sign up intent? Basically the promise made them look further, made them look want to... "I might want to try this product. I want to see the pricing. I want to see the registration process." And then how many of those created an account? Our expectation is to have 10 to 20% sign up intent of all the website visitors. And more than 50% conversion rate from signup intent to creating an account. After we create an account, we want to know how many get to the promise of your product. That is your onboarding rate. We expect it to be for especially B2B companies, between 40% and 60%. If you have it under 40%, you might have a problem. A big problem. If you have it over 60%, well wording is probably not your biggest gross opportunity.

Claudiu Murariu:
Retention. Again, we report retention only for the onboarded users. It makes no sense to look at retention for the people that are not onboarded. We expect it to be at 60% in the first week and at 40% to become stable. This retention curve gives you a very good growth rate in the future.

Claudiu Murariu:
Last but not least, what is the conversion from onboarding to paid into other business goals? We expect at least 20% of the onboarded users to become paying customers. Now, after you've looked at all this, if your biggest problem is that you are losing people in the onboarding process, which I have to say is the main problem for most of the SaaS businesses we've worked with, then it's time to go into optimization. And to optimize we need to understand. The first thing we always want to see is what is the conversion rate dove boarding rate between paid traffic and non-paid traffic? The reason we analyze this is because, paid traffic is where you control the promise the most, the landing pages, ads, website different pages and so on. You decide what you promise there.

Claudiu Murariu:
If your onboarding rate for paid traffic is lower than the onboarding rate for non-paid traffic, it means you are not doing the right promises. You need to work more on those. You should get at least the same onboarding rate between paid and non-paid, or even higher. Again, you control that you should get... Good companies that optimize their acquisition channels, get higher onboarding rates between paid traffic and non-paid traffic. Of course, here can also be the case of getting unqualified users through, but again, it's a problem of the promise. You will get unqualified users if you make the wrong promise to the wrong people.

Claudiu Murariu:
The next question we want to understand is, how long does it take to onboard new users? Because it's important to know if onboarding last minutes, hours, days, or weeks. That's the window of opportunity you will have to optimize your onboarding process, to send emails, to do product tours, to try to get people back. We get our hands dirty and optimize onboarding process. And the first question we always dive into is, what is the behavior of people between onboarding steps? Once we discover the step where we are using most users, we want to see what's happening between that step and the next one. And we look at every single activity that is done between those two steps and we categorize them in three buckets: actions that are specific to accounts that reach the next step, people that convert are more likely to do these actions than people that don't. Actions that are specific to accounts that drop off, people that go away are more likely to do this actions but people that continue. And actions that are not specific to either of the groups.

Claudiu Murariu:
Now here, if we decide an action to help people and it's in this category, it means we didn't do a good job. We need to go redesign it until it gets in the first category. With this report we know exactly what we need to focus on inside the product in order to get more people through. And then our customers start building features or redesigning them, or product tours, or email sequences, based on this data.

Claudiu Murariu:
Talking about emails, the last question is, how do emails influence your onboarding process? Most of you know, we sent a 100 emails for getting people during the onboarding process. 20 of them opened an email and five of them finished the onboarding process. We have a greater conversion range there, let's continue doing that. Well, we decided to look at the conversion rate of the people that don't open the emails. Because if you are right, it means that their conversion rate will be lower than of the people that do open their emails. And as we can see in this example and as I've seen it in so many scenarios of so many size of businesses, people that don't open emails, convert better. The reason, because you don't help them at what they do and you just annoy them. So this report will tell you how good your email is performing in the onboarding process.

Claudiu Murariu:
Now, as a quick recap, an account is onboarded only when they experience the promise of your product. That promise is not defined by data is defined partly by your marketing materials. And all your growth metrics are insightful only if reported in relation to the people that you get to that promise. From acquisition, to retention and revenue.

Claudiu Murariu:
I believe this presentation should be enough for you to get to define your onboarding process. But if you still believe you need help, we will be offering 10 available slots of one hour of free consultancy. And helping you define all your actionable metrics, including the onboarding process. These calls will not be sales calls. They will be consultancy calls, and we are only offering 10 available slots. Use link here to book the calls. Everything I've showed you here is based on the work I'm doing at InnerTrends, where we work with data science algorithms that make it very simple for product teams to understand the behavior of their users. So if you are interested in our product, do head up to our homepage and request a demo.

Claudiu Murariu:
That was it. Thank you very much. I hope you enjoyed this and I hope it was helpful. If you do have any questions, feel free to write to my email address or contact me over LinkedIn. I'll gladly address them. Again thank you. And I wish you high onboarding rates.

Claudiu Murariu:
Hello, and welcome to this new edition of the ProductLed Summit. It's an honor to speak here again, especially as I will be covering a topic that has been the core of my research for the last four years, user onboarding. My name is Claudiu Murariu and I'm the co-founder of InnerTrends, a data science platform for product teams. At InnerTrends we analyzed millions of users during the onboarding process for various SaaS businesses, B2B, and B2C. What I'll be presenting today is the results of all the research we've done around analyzing those users, on how we define the onboarding process, how we prioritize it and how we optimize it.

Claudiu Murariu:
So let's get started, but first let's see who this presentation is for. This presentation is for SaaS businesses with a self service onboarding process. Be it just in part or fully self-service. We will help this businesses define the onboarding process in the right way. It is for the product and the growth leadership in those companies, especially as we will help them establish very clear goals and also for all their team members in getting them aligned.

Claudiu Murariu:
The user onboarding is not a process that sits by itself. It's part of a bigger picture of what we call actionable metrics. The five actionable metrics that we always look at are acquisition, activation or onboarding, revenue, retention and referral. Onboarding is about activation. How do users get to first value? That is what we are going to be covering today. We will have three sections in the presentation, how to define the onboarding process, the second section will be why is it important to define it right and how to optimize and prioritize don't boarding process.

Claudiu Murariu:
Let's start with the first one. Define the onboarding process. Many people or many companies call it the wow moment, the aha moment. These are abstract names. They sound good. They sound sexy, but they are very abstract. And as we don't have microphones in people's computers to listen when they go, wow, aha. In order to say they're onboarded or not, we need to have much more structured way in getting to define what the onboarding process is.

Claudiu Murariu:
But first let's look at what onboarding process is not, because today I will not be speaking about email sequences, video tutorials, checklist, product tours, in-app guides, wizards as all these are tactics that you use in order to get your users onboarded. But they are only helpful if you define that onboarding process the right way, because otherwise you use them to lead them in different directions. Also, I will not be speaking today about how to use data in order to define your onboarding process, because we truly believe that's the wrong way to do it. The definition of your onboarding process does not stay in the data. You use the data to optimize, to understand what's happening in the onboarding process, but you need to tell the data where the boarding process starts and where it ends.

Claudiu Murariu:
At InnerTrends, we define the onboarding process as the process that people go through from the moment of signing up to the moment of experiencing the promise of your product for the first time. The reason for this is because somebody that did not experience the promise of your product has no reason to upgrade to a paid plan or to return to use your product. Also, somebody that didn't experience the promise of your product, doesn't really know what your product is doing. They might have an idea from your marketing materials but they never experienced it themselves. They think they know, they don't know.

Claudiu Murariu:
Another important aspect here is that the promise can be delivered when the user is online or when the user is offline. Often for so many companies out there, the onboarding process finishes when the user is not in front of his computer or inside your product. We'll actually go through a couple of examples. So let's look a bit at the onboarding flow. Somebody comes to your website and they discover your product. They get to see, to experience, sorry. They get to see the promise of your product for the first time. When they believe in it, they say, "oh, this sounds interesting, it's something that I might need." They show up intent and they go to the registration page or to the pricing to learn more and so on. The next stage for them is to create an account. After they create an account, everything they want to do is to get to that promise that you made on your home website as quickly as possible.

Claudiu Murariu:
When you ask how many of your new accounts experienced the promise of your product for the first time, you are actually asking how many onboarded users you have. And if you don't know the answer for this question, you don't know how many users are onboarded. Do you know how many people experienced the promise of your product for the first time? But what is the promise? How do we define it? Well, you already did that. It's your unique selling proposition, it's the title of your sales decks. What stands on your landing pages, is on your ads, on your homepage, the big title, big heading. The challenge here is how do you convert all that marketing talk into a clear definition of one action or a series of actions that people need to do in order to experience that promise.

Claudiu Murariu:
We'll actually go for a couple of examples and do this exercise. So you can use that as an example inside your own company. Front is a well-known SaaS product that has shared inboxing. Multiple people can go inside this product and reply to emails and share email addresses. And this actually is their home page from a couple of months ago. Their promise states, 'Great work starts in your inbox. Front is the first inbox for teams organized where the conversations in one place with them to the right people and get more done as a team.'

Claudiu Murariu:
So after reading this, I understand that first, this product is for a team, so it's not only for one person. If I am to be onboarded, I need to have at least another person, another team member joining. Second is about working on conversations. So basically it's not enough for somebody to join, they also need to work together with me, to collaborate on a conversation. So onboarding would finish after two team members get to collaborate in a conversation. Because this is what it's promising and I say, "oh, I can collaborate a conversation with this product, it's so cool." If this is my plan once I create an account, I will be onboarded when I manage to get there to invite somebody from my team and collaborate with them on a conversation.

Claudiu Murariu:
Now, this is the Front homepage today, 'keep your team aligned with your customers. Front is the modern workplace communication platform, whether you're remote or in office Front enables your team to do their best work. So you can create an experience your customers would never forget.' Very different promise. So now I understand that in order to get to the promise, I need to work with a team member on a customer ticket. So if before I would come in and say, "hey, I can share an email address with somebody from my team." It might be for support tickets, but it might be for social media management.

Claudiu Murariu:
Today, it's clear that it's only about managing customer requests, so more of a support platform. Now in the case of Front, because the promise changed, the onboarding definition changed. Today the onboarding definition is get two team members to collaborate for the first time on a ticket that they receive from a customer. So three things need to happen for somebody to be onboarded. They need to receive a ticket from a customer and they need to have at least another team member working on that ticket. That's when somebody is onboarded in the case of Front.

Claudiu Murariu:
Let's go to another example. I love this example that not many companies out there, when you go to the homepage and directly from the main header, you know exactly what is going to happen the moment you create an account. 'Capture and share instantly.' My expectation is that after I click download free, I'm going to get that product. I am going to be able to capture a screenshot or a video then I'm going to send it to a colleague. That's what my expectation is. And if that onboarding process will take me through these steps, most likely the onboarding rate or this company will be very, very high. Because the onboarding process needs to match the expectations you make to users with your marketing promises.

Claudiu Murariu:
Let's go to another example. Another one that I love very, very much. This is the homepage of PandaDoc from a couple of months ago. 'Sales documents that close. Simplify the process to create, send, track and eSign sales documents.' The reason I love this promise is because it not only tells me what it is going to take in order to finish the onboarding process, it also tells me what are the steps that needs to be taken to get there. Me as a user coming to this website, I understand, oh, I'm going to try it free. I'm going to create a sales doc. I'm going to send it to someone. PandaDoc is going to track it for me and they will be able to sign it. These are the expectations that I made by reading this heading. And if those expectations will be met most likely there'll be an onboarded user.

Claudiu Murariu:
However, PandaDoc changed this to this, 'crush your quota from propose to close. Sales teams, use PandaDoc to improve deal workflow, insights, and speed while delivering an amazing buying experience.' Now, this sounds much sexier. So this here is very clear what is this going to happen, this here is more about emotion, crush your quota.

Claudiu Murariu:
The problem here is that this seems like very appealing promise. So might get more people to want to sign up. But what are the expectations of those people after reading this? Is it possible that they understand that PandaDoc is a completely different product that will help them get more leads in order to crush their quota? So they can send proposals? The problem I see here is often that marketing departments own the website and their goal is to get more people to sign up. And how do they do that by AB testing different promises and messages. However, different promises and messages make different expectations. So you might get more people to sign up, but your onboarding rate might go down. That is why I always advise marketing teams to not look only at the accounts that are created, but the accounts that are onboarded because only that confirms that they set up the right expectations with the right message. And they were sexy enough to appeal more people to sign up.

Claudiu Murariu:
After you go through such an exercise, the next step is to ask, what are the mandatory steps that people need to go through in order to get to that promise of your product? And voila you have your onboarding funnel. And in your onboarding funnel that there one major element that you want to pay attention to. Where do you have your biggest drop off, is it at the top of the funnel, which means you have a promise issue. You made a promise, people signed up and they expected something very different when they got there. Or if your drop-off is towards the end of the onboarding process, you have a product problem. Like you qualify people, they went step by step. It was clear for them, but maybe the work was too much. Maybe you are asking too much. Maybe things are not clear. It's crucial to answer this question before you go into any optimization stage. Where do people drop off in the onboarding process? In the beginning where you have quantification problem or towards the end where you have a product problem.

Claudiu Murariu:
So let's go to the next section of our presentation which is, what is the impact of a good onboarding process? Because revenue starts where onboarding ends. People that are not onboarded don't really have a reason to buy your product.

Claudiu Murariu:
First, let's look at retention and the relationship between onboarding and retention. Now, most companies I know out there, I talked with. When they talk about retention, they look at the cohorts of the new accounts that are created. So how many accounts get created in a typical month and out of them, how many return week by week or month by month. And we believe that's the wrong way to look at retention. Here we have two retention curves, the retention of the people that finished the onboarding process and the retention of people that did not finish the onboarding process.

Claudiu Murariu:
When you report retention to new accounts, you actually get an average of these two curves, which are not an accurate image of your real retention. People that are not onboarded, have no reason to return and use your product. Your real retention is the retention or of your onboarded accounts. So often companies come to us and say, we have a retention problem. Our retention is so low, it's 5%, something is wrong. After I show them this data, they realize they don't have a retention problem. Their retention is actually great, but only 20% of their users end up onboarded. That's why the retention looks that bad when they look at it as the retention of the new accounts. But now at least they know what we need to fix in order to get more people as customers.

Claudiu Murariu:
And talking about customers, we always report the conversion rate from creating an account to upgrading to a paid plan by looking also at the onboarding data. Here we have under 369 people creating the account, 173 of them got onboarded, 78 upgraded to a paid plan after onboarding. So the vast majority, more than 75% of the users upgraded after onboarding. 14 upgraded before onboarding, but they still onboarded. And we have free for less than 2% of all the people that paid, did without finishing the onboarding process. That's how important is the onboarding process on getting people to pay. And even more, these free users, I will bet with you that they will change the next two months, because they never got any value from your product. They never got to the promise of your product. So the easiest thing you can do to optimize churn is actually drill down on those three users, find out who they are, call them and help them finish the onboarding process. They already paid. All you need to do is help them and you will decrease the chances that they will churn in the next two months.

Claudiu Murariu:
Let's go to the next section, which is prioritize and optimize the onboarding process, because as we've just seen your growth depends on it.

Claudiu Murariu:
The first thing is about prioritization. So we want to make sure that we optimize the process where we lose most users. So there are four processes that we analyze. Accusation, how many people visit the website? How many initiated signups or sign up intent? Basically the promise made them look further, made them look want to... "I might want to try this product. I want to see the pricing. I want to see the registration process." And then how many of those created an account? Our expectation is to have 10 to 20% sign up intent of all the website visitors. And more than 50% conversion rate from signup intent to creating an account. After we create an account, we want to know how many get to the promise of your product. That is your onboarding rate. We expect it to be for especially B2B companies, between 40% and 60%. If you have it under 40%, you might have a problem. A big problem. If you have it over 60%, well wording is probably not your biggest gross opportunity.

Claudiu Murariu:
Retention. Again, we report retention only for the onboarded users. It makes no sense to look at retention for the people that are not onboarded. We expect it to be at 60% in the first week and at 40% to become stable. This retention curve gives you a very good growth rate in the future.

Claudiu Murariu:
Last but not least, what is the conversion from onboarding to paid into other business goals? We expect at least 20% of the onboarded users to become paying customers. Now, after you've looked at all this, if your biggest problem is that you are losing people in the onboarding process, which I have to say is the main problem for most of the SaaS businesses we've worked with, then it's time to go into optimization. And to optimize we need to understand. The first thing we always want to see is what is the conversion rate dove boarding rate between paid traffic and non-paid traffic? The reason we analyze this is because, paid traffic is where you control the promise the most, the landing pages, ads, website different pages and so on. You decide what you promise there.

Claudiu Murariu:
If your onboarding rate for paid traffic is lower than the onboarding rate for non-paid traffic, it means you are not doing the right promises. You need to work more on those. You should get at least the same onboarding rate between paid and non-paid, or even higher. Again, you control that you should get... Good companies that optimize their acquisition channels, get higher onboarding rates between paid traffic and non-paid traffic. Of course, here can also be the case of getting unqualified users through, but again, it's a problem of the promise. You will get unqualified users if you make the wrong promise to the wrong people.

Claudiu Murariu:
The next question we want to understand is, how long does it take to onboard new users? Because it's important to know if onboarding last minutes, hours, days, or weeks. That's the window of opportunity you will have to optimize your onboarding process, to send emails, to do product tours, to try to get people back. We get our hands dirty and optimize onboarding process. And the first question we always dive into is, what is the behavior of people between onboarding steps? Once we discover the step where we are using most users, we want to see what's happening between that step and the next one. And we look at every single activity that is done between those two steps and we categorize them in three buckets: actions that are specific to accounts that reach the next step, people that convert are more likely to do these actions than people that don't. Actions that are specific to accounts that drop off, people that go away are more likely to do this actions but people that continue. And actions that are not specific to either of the groups.

Claudiu Murariu:
Now here, if we decide an action to help people and it's in this category, it means we didn't do a good job. We need to go redesign it until it gets in the first category. With this report we know exactly what we need to focus on inside the product in order to get more people through. And then our customers start building features or redesigning them, or product tours, or email sequences, based on this data.

Claudiu Murariu:
Talking about emails, the last question is, how do emails influence your onboarding process? Most of you know, we sent a 100 emails for getting people during the onboarding process. 20 of them opened an email and five of them finished the onboarding process. We have a greater conversion range there, let's continue doing that. Well, we decided to look at the conversion rate of the people that don't open the emails. Because if you are right, it means that their conversion rate will be lower than of the people that do open their emails. And as we can see in this example and as I've seen it in so many scenarios of so many size of businesses, people that don't open emails, convert better. The reason, because you don't help them at what they do and you just annoy them. So this report will tell you how good your email is performing in the onboarding process.

Claudiu Murariu:
Now, as a quick recap, an account is onboarded only when they experience the promise of your product. That promise is not defined by data is defined partly by your marketing materials. And all your growth metrics are insightful only if reported in relation to the people that you get to that promise. From acquisition, to retention and revenue.

Claudiu Murariu:
I believe this presentation should be enough for you to get to define your onboarding process. But if you still believe you need help, we will be offering 10 available slots of one hour of free consultancy. And helping you define all your actionable metrics, including the onboarding process. These calls will not be sales calls. They will be consultancy calls, and we are only offering 10 available slots. Use link here to book the calls. Everything I've showed you here is based on the work I'm doing at InnerTrends, where we work with data science algorithms that make it very simple for product teams to understand the behavior of their users. So if you are interested in our product, do head up to our homepage and request a demo.

Claudiu Murariu:
That was it. Thank you very much. I hope you enjoyed this and I hope it was helpful. If you do have any questions, feel free to write to my email address or contact me over LinkedIn. I'll gladly address them. Again thank you. And I wish you high onboarding rates.

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Gretchen Duhaime
Claudiu Murariu
Founder at InnerTrends
A data hacker with a passion for data algorithms designed to offer deep insights into customer behavior. Claudiu is the CEO and co-founder of InnerTrends, a data science platform for product teams. He is also a speaker at international conferences, a passionate blogger, as well as the author of DataDiary, a newsletter on how to use data in the business decision making process. Last but not least, he is the proud father of two.