Customer onboarding may be just the beginning of the customer journey, but it’s possibly the most important stage. The onboarding experience you provide your new customers plays the same role as the first impression you give when you meet a new person — it sets the tone for the whole relationship moving forward. While that tone can be changed over time, it’s far preferable to start on the right foot in the first place.
As one of the most critical points in the customer journey, it’s crucial to have effective ways of measuring your customer onboarding process’s success. However, there is no single, convenient number you can look at to reveal absolutely everything you need to know to gauge the effectiveness of your onboarding strategy. Instead, you have to rely on a collection of relevant customer onboarding metrics.
There are multiple kinds of onboarding. For example, product onboarding teaches new users how to succeed with your product — this could apply to any kind of user, including your own employees. Answering the question: “why is product onboarding important?” can help you determine the impact this kind of user education can have on your business.
Customer onboarding is specifically the process of acclimating a new customer to your brand, products, and/or services. B2B customer onboarding is what we call this process when the new customer is not an individual but rather another business.
The importance of customer onboarding should not be overlooked, especially at a SaaS company. An effective SaaS onboarding strategy can make all the difference when it comes to customer retention. Therefore, it’s just as important to have an effective way of measuring how well your SaaS onboarding strategy is working.
To measure effectively, you’ll need to select a few customer success metrics to serve as KPIs (key performance indicators). The metrics you choose should give you valuable information that can help you determine whether or not your customer onboarding strategy is meeting its goals. This means that your onboarding objectives should stay top-of-mind as you’re considering which metrics to use.
Successful customer onboarding results in a few key benefits:
You need to create and maintain an excellent customer onboarding strategy for your business to gain benefits like these. One of the most important parts of this process is measuring your progress to find out whether or not your customer onboarding program is succeeding. You need to track and analyze relevant, meaningful metrics to help you understand the results of your customer onboarding efforts.
Choosing the right customer onboarding metrics to measure means understanding the specific goals of your onboarding program and selecting KPIs to match. For example, are you hoping your customer onboarding program will reduce customer churn? Or are you hoping it will reduce the strain on customer support resources? First, you need to define what success looks like in your case, and then you can choose metrics that are relevant.
Here are some common examples of customer onboarding metrics that could work for analyzing various kinds of onboarding strategies:
Customer retention rate is the percentage of your total customers that do leave your business over a certain period of time. To calculate the customer retention rate, divide the number of users you had at the beginning of the time period by the number of users you have at the end of the time period. For example, if you have 20 customers at the beginning of the month and 16 of those customers remain at the end of the month (don’t factor in new customers gained that month), your retention rate for the month is 80%.
Customer engagement rate is a metric that tracks the percentage of your total customers who use your product or service during a certain period of time. To calculate the engagement rate, divide the number of customers who logged in and used the product or service over the period of time in question by the total number of customers who are currently signed up for your product or service. For example, if you have 20 customers in total and 19 of them logged in and used the product or service last month, your engagement rate for the month is 95%.
Completion rate measures how many of your customers complete the whole onboarding process during a specific period of time. To calculate the completion rate, divide the total number of users who were onboarded during the time period by the number of customers who finished all onboarding materials. For example, if you onboarded 20 customers this month and only 14 of them actually finished the whole onboarding process, your completion rate for the month is 70%.
Time to value tracks the amount of time that elapses between a new customer starting your onboarding process and receiving actual value from the product or service. You might also hear time to value called the “aha moment.” The lower your average TTV, the better. You can measure TTV in whatever unit makes sense for your organization, like minutes or number of clicks. Streamlining your onboarding process is one of the best ways to reduce a bloated time to value. When customers can get to the value faster, it creates a much better experience and reduces the likelihood that customers will churn quickly.
The product or feature adoption rate measures the percentage of your total customer base that uses a certain product or feature over a given period of time. This metric can help you determine how popular a particular product or feature is so you know what you should prioritize during the onboarding process. You’ll need to choose a frequency of use that your organization considers “fully adopted.” It could be at least once per month, once per day, or whatever you decide makes sense of your business’s goals. Then, divide the number of users who used the feature in question with the required frequency during the given time period by your total number of customers.
You may notice that product or feature adoption is measured in a very similar way to customer engagement — while customer engagement measures how much customers are using your services in general, the product or feature adoption rate gets more specific and measures exactly how frequently your customers are using particular aspects.
The number of support tickets your customer support team receives over a given period of time is another effective metric for measuring customer onboarding success. Suppose you are receiving a large number of onboarding-related support tickets every day. In that case, that’s a likely indicator that there are issues with your onboarding strategy that are causing customers to consistently struggle. On the other hand, a lower number of support tickets can indicate that customers are getting a smooth experience. It’s important to pay close attention to the kinds of tickets customers are submitting and look for any patterns in the ways they’re struggling. By identifying customer pain points throughout the onboarding process, you can eliminate them before they cause further harm and contribute to customer churn.
Customer lifetime value measures the approximate total amount of money a customer is likely to spend with your business throughout the entire time they’re your customer. A positive onboarding experience is a vital factor in increasing customer lifetime value. The better the onboarding experience a customer receives, the more likely they typically are to remain a customer for longer and spend a greater amount of money with your business over time. To calculate customer lifetime value, multiply the average purchase value at your business by the average number of purchases customers make during a given period of time. Then, multiply the resulting number by the average customer lifespan. Many SaaS companies consider customer lifetime value to be the most customer onboarding metric of all.
Keeping track of all these metrics can be challenging. Implementing dedicated tools for improving your customer onboarding analytics is a great way to help. For example, you can use customer onboarding software to access the analytics tools you need to track and evaluate your chosen customer onboarding metrics. Northpass comes with robust analytics features that can provide deep insights into all your customer education efforts, including customer onboarding.