User Onboarding

Product-Led Onboarding

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In this session, we will review how to use data to make your onboarding a delightful experience that will help convert more users into customers. User onboarding is a critical componfent in the adoption and sales process for any SaaS product. Getting it right is of paramount importance, yet we often let our guts dictate its structure.

Francis Brero:
All right. Thanks everyone for joining, really excited to cover today Product-led Onboarding where we'll discuss about some of the myths and try to debunk them around onboarding and what it means in a product-led go-to market strategy. And then also talk about some tips of things that you can implement to make your onboarding better in terms of conversion rate, but overall in terms of experience for your users. So for those who don't know me, I'm Francis Brero, I'm the co-founder of MadKudu. And while my background was initially in mathematics, I've spent the last 10 years really applying data science to sales and marketing, and have been fortunate enough to work with some of the best brands out there, helping them use data to optimize their processes. On a side note, I'm also the author of one of the running jokes of the Big Bang Theory around number 73.

Francis Brero:
You're more than welcome to go check that out on our website, but let's jump right into it. As I mentioned, a quick word, maybe about MadKudu. So we're a lead scoring platform and really the platform for marketing ops to centralize all their data and make decisions based on the data that's available, lead scoring being one of them. And so with MadKudu, I've been fortunate to work with some of the most amazing brands out there and to learn a lot about how predictive analytics can help in these kind of product-led initiatives, especially around onboarding for people that have high volume trials or freemiums. But also learn some of the pitfalls and some of the things that might be shiny objects and seem really interesting to jump into, but might not necessarily bear fruits. So jumping right into it. I think, as I mentioned, right, this is all about, the first section is about debunking some of these myths out there.

Francis Brero:
And I always like to use this cartoon from XKCD, that hints at the danger of looking at correlation and thinking that it ties to causation. And for those who don't know the difference, that two items that happen frequently together are generally correlated, but there's not necessarily a notion that one actually causes the other. And so one of the misconceptions usually is to think that if the two are correlated, one causes the other, and that leads us to drive different kinds of onboarding. And to try to push people down a path that might not be the right one. And so one of the elements behind this that I hear often is that the fastest growing companies, if you think of Slack and, and Stripe, basically don't have a sales team. And this is a huge myth that is out there, especially on the product led side, because it's very appealing, right?

Francis Brero:
Everyone wants to believe that you could build a massive company without having a sales team and without the overhead of people just building product. Unfortunately, that's absolutely not true. And there's actually, I think, there's essentially a correlation that some of these fastest growing companies today have, I guess a smaller enterprise sales motion, at least how they talk about it. But it doesn't mean that to be able to be successful, you need to not have a sales team. So diving a little bit into this, I think, this myth, I wanted to reuse a slide deck from a good friend of mine, Pete Kazanjy, who runs Modern Sales Pros and wrote an amazing book around product-led selling and founder led sales. And one of the cool elements that he really dives into is this misconception that you can actually build massive companies without having a sales team.

Francis Brero:
And that's due to the fact that companies like Slack, Dropbox say, or even the Atlassian, and say they don't have sales teams, but when you actually run a quick search on LinkedIn, what you quickly find is that they actually do have a bunch of people at the company that are in sales. And so it's super seductive and we all want to hear that, but you couldn't be further from the truth. And potentially, I think we know one of the reasons why that's the case. I think as founders and we are in an era where founders are a little bit more technical and we have a lot more engineers in companies. We have this desire to move away from what we see as very sleazy sales and like sleazy team members as salespeople.

Francis Brero:
Everyone has this idea of a car dealership and this person just trying to shove a product down your throat, or yeah. They have this vision of sales, which unfortunately is incorrect. Good salespeople are actually there to help make the product experience better. They're not there to replace it. And so that's a grave misconception that I think you have to move away and product-led onboarding is not about not having salespeople. The second misconception that I hear a lot about very often is that people assume that the onboarding funnel is very linear. People go from signing up, then they activate the product, they engage with it. And then they convert. And it's good to be able to simplify things and to, try and put high level patterns and create a simple funnel so that you can visualize how things are likely to happen.

Francis Brero:
Unfortunately, that's not the case. And I think inherently it hides some of the complexity that's behind the data. And a very simple example of this was that we ran an analysis against about 10 different companies and we looked at how long it took people to convert. What we found was that about 50% of conversions would happen often at the end of the free trial. And I think would that goes to say, is that the way we think of the funnel of this activation, engagement, conversion is actually wrong. And there's a big element and a lot of value in nurturing people. And so even though people have maybe gone through your trial, there's still a chance that they'll convert in the near future. They might just not have had the need at the exact time.

Francis Brero:
And they might convert a little bit later, but that product experience still matters a lot, even though they're not going to convert. And more importantly, the experience with the product after the trial ends, therefore, potentially outside of the product is equally important. And so from a product lead onboarding standpoint, it's really critical to think about how you incorporate your marketing nurturing into the overall experience of the product. And overall, I'd also say that in B2B, it takes a village to sell, right? So it's not just one user who's going to buy the product. Most of the companies that we deal with, and if you're interested in the session, it's probably the case for you to, you're trying to sell into the entire organization. And therefore you might realize that you have very different patterns according to job titles. And one of the ways we generally look at is from the very sales standpoint is looking at the propensity of a user to respond to an email and therefore open an opportunity from a sales standpoint versus being in the [inaudible 00:07:49] when you close it.

Francis Brero:
And what we find is that there's a bunch of different clusters of people who end up appearing when you map them against these two dimensions. And essentially what it shows is that you have groups of buyers who are strongly... That over-index towards being there when you're closing the opportunity and others who are there and over-indexed on opening the opportunity. And these are more of your adopters of the product versus the closers. And so understanding also that different users are going to interact differently with your product, the same way that they're going to interact differently with your sales process is critical to understand that you don't necessarily want to shove a CEO down your onboarding funnel. And you might want to actually have the CEO invite the person who could potentially become the champion and have that actual champion go through the product.

Francis Brero:
And the analogy that I generally use around this is the story of the Lord of the Rings. So in the Lord of the Rings, there's really one storyline, which is about the fellowship of the ring, working together to destroy the ring. And the thing is that there's a lot of different characters in there that play different roles. And if you remove one of them from the story, the entire story collapses. And B2B sales is very similar, even though you might have only one person who is going to sign or swipe the credit card or sign a contract. Ultimately, there's a lot of different people who are going to have different roles. And it's really important to understand that and to understand that your onboarding has to take into account the goals of all these different people. And the more up market you go in your product-led go-to market, the more important this is.

Francis Brero:
And we've seen it with companies like [Envision 00:09:37] where you might have two designers from Disney who are using the product, but that doesn't mean that you're ready to sell to Disney because you have to figure out how to get procurement to interact with the product. You need to get the head of design to do this. And then you need to have essentially the product team signing in, or at least reading some educational content. So there's a lot more to it than really just having two designers engaging with the product.

Francis Brero:
And maybe the last myth that I'll talk about today is this idea that because B2B has been following a lot of the patterns of B to C, and it's consumerizing with the way we interact faster was users. And there's higher ease of transactions. It means that people want to self-serve. And this again goes into this idea that, I think it follows. Yeah. It falls in line with the idea that we can replace salespeople because people want to self-serve, they just want to use the product themselves, get value from it, and then swipe the credit card. And we're done. I think that's another strong misconception. And part of the reason behind that is that there's something called the paradox of choice, which was talked about a lot as a result of what's happened in our society where the current dogma seems to be that we need to maximize choice to maximize freedom, and therefore to maximize happiness.

Francis Brero:
And so in the same way, we're saying people should be allowed to just self-serve and choose what feature they want to use, and choose what product they want to use and use it the way they want to. And that's going to maximize freedom, and therefore that's going to maximize their happiness. And that's what we want to do. And I think a cool analogy that Barry Schwartz made in his TED Talk around this, that essentially we went from a time where there were rules and there were ways... There were things that we accepted as written in stone towards something where now we're saying that you can write your own commandments and figure out what you want to do with it. And his strong conclusion, which I think applies to B2B, is that actually this freedom of choice and this plethora of choice reduces happiness because it leads to this paralysis of not knowing what is the right solution, and what is the best thing to do?

Francis Brero:
And if you were to write your 10 commandments, they would actually probably be very complicated because now you're trying to figure out, well what are the right alternatives? And what if I get it wrong? What are the implications of that? And I think we're seeing something very similar in B2B and the paradox of choice is definitely out there. One of the things that I did is I just looked at, on G2 Crowd, how many marketing automation platforms are out there? And you'd be surprised how many there are. And looking at the number of CRMs, it's over 300. Sales automation is over 200 and even e-signatures is over 150. So ultimately just putting that together, that means that as of today, a marketer just was what's available on G2 Crowd has a combination of 805 distinct, billion distinct, marketing stacks, just with the ones that are listed here.

Francis Brero:
And that's overwhelming, right? How do you know that one marketing platform is better than another for you? Same thing for e-signatures. And what we've seen is that people are reverting to sites like G2 Crowd, where they want to read what people are saying, but even that still, there's just too much noise out there. And I do believe that the value of a salesperson is actually to be able to listen to your story, to understand what your needs are, and therefore be very prescriptive in terms of what is going to be the right solution for you. And we're actually seeing this more and more out there as being something that people are looking for. I think companies on the B2C side like Trunk Club or Stitch Fix are actually really interesting because their success goes to show how people don't necessarily want to go into a store and be met with a variety of choice, of 50 different pairs of jeans, and try to figure out which one is going to work best for them.

Francis Brero:
And that's why I usually they'll go and talk to a sales clerk and ask, what would you recommend? And a good sales clerk is going to be the person who's going to look at the prospect and figure out what is the right kind of jean for them. And the same way that Stitch Fix and Trunk Club try to learn from your tastes to figure out what is the right recommendation to serve you so that you don't have to wonder about what if I had picked this other one, would it be better? And you just essentially take what you're given, and that actually increases happiness. And I think we are in a situation where we need to do the same thing in B2B, and that's the strong added value of salespeople. So again, not saying that we should not have self-serve. What I'm saying is that the idea that people should just be able to freely do whatever they want on the product and hoping that that's going to increase success and increase happiness of your customers is a misconception.

Francis Brero:
And we really have to think about how we can maximize the relevance of the offering and really tailor the onboarding to the end user to make sure that they're really using the features that make the most sense. And therefore getting the maximum value from the product. And I think a good example of this right now that we're seeing is that YouTube today is seeing over 70% of the time spent on its platform linked to videos that they recommended to users. So this is really interesting because it's saying even though YouTube has any possible video out there, ultimately people are not necessarily searching as much as we would think they are for videos. They're actually watching what's recommended.

Francis Brero:
And I do believe that in recent years, YouTube's algorithm has gotten a lot better and their recommendations are very often spot on. And I definitely see why people are spending that much time. And I think this is an early indicator of where we're going and what we're going towards. Something where these recommendations make a lot of sense. And they're able to identify more nuanced patterns than what we used to do in the past. And I think it's time for B2B to catch up on that front.

Francis Brero:
So that being said, now let's talk a little bit about what you can do to improve your onboarding, and how you can leverage product data to be able to do that. Maybe the first thing I would say is that whenever you're trying to optimize anything, I always like to use the framework of measure, predict, optimize. And so the first step is always about measuring what's happening, analyzing your data. And one of the very critical things to do when you're looking at product-led is to always look at data through the lens of your ICP, because you might have a very noisy database. And you don't want to derive patterns from non ICP users because then you might build a product that actually no longer fits your ideal customer. And that's linked to something that we talked about in our previous edition of the product led of the Simpson paradox.

Francis Brero:
And the quick refresher is that the Simpson paradox is something that happens where the average actually shows the opposite of the granular data. And so in this example, what we could say is that if we look at two different lead sources and two different types of leads, we have good leads and bad leads and coming from two different sources. What we're seeing is that on average, the good leads actually convert at a lower rate than the bad leads. But when we look at each of the sources that these leads are coming from, the good leads convert at a much higher rate, actually at more than two X the rate. But the thing is because of distribution of overall leads, overall good leads, is actually skewed strongly towards one of the lower converting sources. It leads the average of the good leads to be lower.

Francis Brero:
And so again, that's just a good example of how you can arrive at the wrong conclusion if you're not splitting your data in the right way. And in this case, it's splitting your data by lead source. And one example of this, to be very tactical, was that for one of our customers that had a very high volume SAAS freemium model, what they were seeing is that when they were plotting daily retention, they were seeing this huge drop-off on day two. So essentially if you had a hundred people coming in, only 50 of them would come back at some point in time. And so they were trying to figure out why are people not logging in on the second day? And how can we fix that? So the entire company was focused on solving this problem, how do we get people to keep on using the product off the day one?

Francis Brero:
And so the first thing that we actually looked at was to figure out, well, what does the cohort look like? And if we break it by quality of lead, does it actually look homogeneous? Is it all high quality leads? And what we found was that actually over 75% of the leads were just not a fit at all and had a very low inherent likelihood to be able to use the product. And so that was really interesting because that led us to push them to analyze this daily retention by quality of leads. And what we actually found by doing that was that the day two retention was at more than 80% for any of the leads that had a chance of actually getting value from the product. And what we ultimately found was that the challenge that the company was facing was really more about how to get these leads to convert rather than how do we get them to activate, or stay active on day two?

Francis Brero:
Again, and this is critical because if you're looking at optimizing your onboarding and you're optimizing for the wrong thing because your analysis initially is incorrect, then you're just going to be spinning your wheels and investing a ton of time on something that's never going to have an impact because you're never going to get your [inaudible 00:20:38] dot com emails to come back to the website or to your app on day two. And so that's, I guess, a very extreme example of saying how not optimizing for your ICP, and optimizing for potentially the bulk of your leads, which are low quality could be an issue. But then if you're building a product for a specific industry or for a specific type of user, and that user doesn't represent the majority of your leads, you might then try to optimize metrics by changing things in your product that are going to help the rest of the leads. But not your core ICP.

Francis Brero:
So really making sure that you segment everything before you do analysis to at least isolate what's happening with your ICPs is critical to any kind of decision that you're going to make on your product-led. And then the second part that goes off that is now saying that now you've identified your ICPs, you identify what's happening in the funnel. And now the next step is really to optimize your onboarding and your campaigns based on your different ICPs. And again, this is an example from CloudApp which does screenshots and screen shares as a freemium model. And one of the things that was very clear to them was that they had a wide variety of end users and in B2B companies, and that people from different departments actually were using the product in different ways.

Francis Brero:
And so it was really critical for them to start tailoring the onboarding sequence, to make sure that they were pushing users towards the use case that made the most sense based on what they had seen historically. And that actually generated a huge bump in engagement and in retention, just because they were being very prescriptive and prescriptive in a relevant manner. So for the engineering team they were talking about how screen sharing and screencasting was going to be helpful to showcase bugs and share that across the team. Whereas for the product team, it was more about communicating and annotating, and just showing new features to customers and to the rest of the executive team.

Francis Brero:
And so again, if we go back to the graph that we had initially on how different people are going to react differently, or are going to behave differently, sorry, when it comes to the products was these, what we used to call the champion or adopters, versus the buyer. You want to have something similar in terms of the goals that you're going to set. So it's one thing to talk about the use cases and how the use cases are going to be different based on the team that you're in and how you're going to use the product. But there's also something separate, which is what is your goal within the account with regards to the overall adoption of the product? And so there are people who are adopters. Their goal is to use the product as much as possible. And there are other people where they might not use the product.

Francis Brero:
And maybe for them, the use of the product is just going to be getting a weekly dashboard of engagement or a weekly summary of the value that the product added to the team. And segmenting your onboarding according to the goal of the people within the account, again, is critical because if you have a manager who's going to get value from the product by seeing a weekly dashboard of activity and understanding the summary of the value driven by the product. And you're actually trying to drive them towards a granular use. Well, potentially you're going to lose them because that's not what they're interested in. That's not the value that they're going to be seeing from the product. So it's also critical to understand how you can segment your onboarding towards that. And again, great example from cloud app was that very simply initially, the way they looked at it was saying, well if we have a new user sign up who's someone that we expect to be an adopter, then the goals that we're going to set for that person are going to be to activate the product, to invite more users.

Francis Brero:
And if we don't think that they can add more users than to swipe their credit card if we're assuming that they're a single user. On the flip side, when we were seeing users who were expected to be buyers. So again let's say CEOs or director level people, then the content of the emails was going to be was going to be very different. And the goals that we're setting to measure are going to be around scheduling a meeting. I think it might seem cliche, but even in product-led companies, I think it's critical to have a consultative approach. And there's a lot of value in actually having these people talk to either a product person or even to an AE to understand what is the value they can get from this.

Francis Brero:
And how this can be transformational for their team, which is something that can be hard to showcase because if for the director to see the value, they need to have five people using the product, that might be a big blocker because if the director is the first person to sign up, you can't just wait for the other five members to show up to then be able to show value. Because they might need to see or to expect value to actually invite people. So those are competing and really interesting. And that's why generally you want to push towards the goal of either scheduling a meeting so you can show why it actually makes sense to invite more people onto the platform, because they're going to get a lot of value from it, or actually to have the goal directly to be inviting people.

Francis Brero:
And just an example of that for again, CloudApp where essentially, if we had an AE signing up for the product where we expect the AE to be an adopter, we're really pushing them towards users. So install CloudApp on your computer, take your first screenshot. And then once they've taken their first screenshot, the subsequent emails were going to be about doing more with those screenshots, and sharing them, and advising other people from the team to the CloudApp, because it was such a great tool. On the flip side, when we had a CEO sign up for the product, there we were really talking about how the product could help their team be more effective and share things more easily. And so they could either invite people, but the main call to action is really to hop on a call so that we can show them what value they could get from the tool.

Francis Brero:
And I think that [inaudible 00:27:40], who used to be at Segment and before that at Drift, has talked a lot about how he did this at Segment, and then how he replicated that at Drift. I think this has become almost the gold standard of onboarding emails. And figuring out that tech stack of saying you have a form that's filled either for a signup or for anything. You pass that into your analytics stack, which could be at Segment which works really well to orchestrate all of this. Or you could even do it in Zapier if you're at a smaller scale. And then from that, you actually enrich with tools like Datanyze, ClearBid, InsideViews, or any of the tools out there. You can do Scoring was like a MadKudu or directly with the native Zapier lead scoring.

Francis Brero:
And then you send it to a messaging platform that could be a Drift, could be a customer IO or any of those. And you start having dynamic elements in your emails based on the decision tree that says if the person is likely to be an adopter, this is the call to action we want to have. If the person has yet to adopt the product, to activate the product, we want to talk about activation and the benefits of activating. If they've already activated, then we want to talk about how they can spread the word across the team or how they could get even more value from the product. And building this initial decision tree of what should happen based on different events is really critical to make sure that you get a highly converting onboarding campaign. And ultimately it doesn't necessarily... The conversion is great, obviously.

Francis Brero:
In B2B, we're here to make money. We're not all running non-profits, but ultimately I do think that there's a big element that in terms of what we're talking about correlation and causation, and I'll end on this. On saying that creating a very relevant product onboarding is strongly correlated to high levels of conversion. But the thing is that there's actually causation in there. Because your companies create a very relevant onboarding, they are going to see higher conversion rates. And I highly encourage you to run an AB test in your email platform of looking at sending whatever emails you're sending today, and then have a duplicated campaign where you actually add a little bit more of segmentation where it's either about pitching a use case that's more specific to who the user is, or being more specific about what they've done in the product.

Francis Brero:
And you'll immediately see that your numbers are going to go up. And this is not a trick of saying it's a way to hack conversion rates. I think this fundamentally goes towards what people are looking for which is a consultative approach to onboarding, making sure that you understand what is their likely need so that you can pitch a relevant use case, and that you can help them get more value from the product. And that really, I think, is the key today in product-led onboarding, it's figuring out how you can be helpful and how you can lead customers to be more successful on your product. Hopefully this was insightful. There's a lot more that we can talk about on the subject, and I'd be more than happy to. So feel free to reach out to me at francis@madkudu.com. Drop me any comments on the presentation and yeah, hopefully I'll hear from you guys. And otherwise, I'll look forward to meeting you at some point soon.

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Gretchen Duhaime
Francis Brero
Co-founder & CRO of MadKudu
Built data driven sales processes for Slack, InVision, IBM and many more. Aspiring hands-on T-Rex obsessed with leveraging science to improve efficiency and effectiveness. Data scientist converted to Sales along the way.