Top 7 SaaS customer onboarding metrics you need to track

In the Software as a Service (SaaS) industry, delivering a seamless onboarding experience to customers is necessary for retaining business.

Your business's first impressions and experiences strengthen or weaken a customer's relationship with your service.

Therefore, understanding and optimizing SaaS onboarding metrics is crucial for businesses operating within this domain.

But what metrics should you track, and why are they so important?

In this article, we are revealing the:

• The top onboarding metrics you should measure
• Explaining their importance
• Strategies to improve them

We are not talking about the onboarding flow in this article. We only focus on key metrics so you can measure these metrics better. If you aren't measuring, you can't improve. If you want an onboarding checklist, you can read about our email sequences for this to learn more.

Key takeaways

Certainly, here are key takeaways in brief bullet points:

• Prioritize onboarding metrics.
• Track user value quickly.
• Improve customer engagement continuously.
• Convert free trials effectively.
• Focus on customer retention.
• Personalize customer journeys.
• Use tools for insights.

What is SaaS Onboarding?

Onboarding is how new users become acquainted with your product. It's a critical phase where your business has the opportunity to set the tone for your relationship with customers.

Effective onboarding not only assists users in understanding your service but aids in quick product adoption.

Great onboarding will provide tips, use cases, and workflows for increasing productivity and efficiency with your product.

When customers understand they'll receive value from your product, you can win their business for years.

The Purpose of the onboarding experience

The ultimate goal of effective onboarding is to ensure that customers find value in your product as quickly as possible. It's about making transitioning from a potential customer to a regular user seamless, intuitive, and engaging.

But onboarding does more than just help customers become acquainted with your product. In addition, you set the stage for recurring subscriptions for your service.

When you onboard a customer, you should aim for customer loyalty. And it's during the onboarding process you can ensure you keep customers.

Converting a one-time user to a lifetime customer requires you to follow metrics. When you follow the right metrics, you will know where your business falls short and where to improve to keep customers longer.

Here's everything you can achieve by monitoring the right metrics in your onboarding:

• Understand your user journey and improve it
• Prioritize the implementation of features that lead to higher activation rates
• Create the right UX for your users
• Develop the right self-service onboarding materials.
• Identify user pain points more effectively.
• Understand the best time and channels for engaging customers.
• Deeply understand what makes your customers love your service.

In short, these help you build a superior product your customers will enjoy. Now, let's get into the key metrics you should be following.

Key SaaS customer onboarding metrics and KPIs you need to track

Below, we outline the seven most important metrics you should measure for your product.

Time to First Value (TTFV)

This metric measures the time it takes for a new user to realize the value of your product. The quicker they reach this point, the better.

For your users, this is the reason they agree to onboarding. Your process should provide technical knowledge and explain how to use it. In addition, you should seek to understand better why your customer is using your services.

By asking your customers key questions, you can understand their user expectations. Once you have this data, you can show your customer how to quickly use your product to meet their needs.

You shouldn't be saying your product can do more than it's capable of. Instead, focus on what your product does well and how that can increase efficiency for your user.

First, understand what your users want from your product. Then, show them how they can achieve it using your service.

Next, consider segmenting customers according to their needs using signup surveys. By segmenting your customers, you can target their pain points and address them through personalized onboarding sessions.  

Notion does a great job of this, as shown in the image below.

Customer engagement Score

The quantification of your customer engagement cannot be reduced to a singular measure. Engagement is intrinsically linked to your product's specific characteristics and utility of a product.

A thorough comprehension of your product and its users is essential to measure customer engagement.

Take, for instance, productivity software. In this context, your engagement may be exemplified by daily logins and specific features such as task management.

For different products, the definition of engagement may contain other metrics, like the frequency of email communication, where more than login activity may be required.

The Customer Onboarding Benchmark Report of 2021 highlights a deficit in engagement is a predominant precursor to customer attrition, second only to the misalignment of product offerings.

Engaging customers via various platforms and materials is important because it ensures their interactions with the product are substantial and meaningful.

To calculate your customer engagement rate, you can use the following equation.

Customer engagement rate = (w1+ni) = (w2+n2) =(w# +n#)

Consider 'w' as the designated weight or significance given to a particular engagement activity, and 'n' represents the frequency of said activity.

The formula above shows the importance of understanding your product and its user base.

Enhancing your customer engagement rate begins with a profound understanding of what constitutes engagement for your product.

Once you have this, you can employ analytics tools to track the engagement metrics relevant to your service or product.

Free Trial Conversion Rate after the user onboarding process

You know your onboarding is successful when you can convert a free trial user into a paying customer. When you do this, you know people find value in your product and are willing to invest in it.

It's important to remember that one subscription will not keep your business afloat. Instead, you need to create a recurring revenue stream for your company.

New signups alone are not a good indicator of your product's success. Many companies will increase customer signups when they offer a free trial, but these accounts are less valuable than those who stay with you for years. If you only measure new accounts, you are causing your business more harm than good because this alone is a bad metric for SAAS businesses.

Improving conversions from free trials to paying customers is easier than you may think. You need to engage with customers at the right times during their free trials. YOu can employ email marketing for this by using upgrade emails.

Consider using UI modals in your email sequences to persuade buyers who like your product but still need to set up a subscription. A UI modal is a landing page that removes all functions from the email except the buy now button.

Customer retention rates for your SaaS business

Understanding your churn and the number of customers who stop using your service is one of the most important metrics you can track. However, you should also focus on the customers who stay with your business for long periods to understand your retention rate.

Why should you focus on retention? It's because retention is important for long-term business growth.

It's even more important than acquiring new customers. After all, what good are new customers if they leave your business after one billing cycle?

There are numerous benefits to understanding your customer retention rate.

The first is that it's cheaper to retain a customer than acquire a new one. One study outlined that maintaining a customer is up to 20x cheaper than acquiring a new one.

As you can guess, that's a huge difference that will positively impact your business revenue over time.

You can use the following formula to identify your customer retention rate:

User retention rate = (number of users at the end of a period - number of new users) - number of new users at the beginning of a period.

Once you have that number, multiply it by 100 to receive a percentage.

The percentage is your customer retention rate. Once you know this percentage, you can closely examine your onboarding process to see where customers are falling off and tweak your onboarding.

For example, if you offer an email marketing service, you may look at your overall process, which could be:

1. Onboard email
2. Setting up DNS records
3. Choosing a template
4. Customizing the first email
5. Sending the first email
6. Reviewing open and bounce rates

If you find that most people are falling off at step 2, which is updating DNS records, you can make a plan to solve it.

Your plan could include:

• A customer success team that helps users set DNS records
• Video tutorials
• In-depth blog posts
• Phone support

Any of these options would aid in keeping your customers around longer and excited about using your service. So, how can you improve your overall onboarding with these metrics?

First, begin by understanding your customer retention rate.

Next, consider your onboarding process to understand where you're losing customers.

Think about using gamification to keep users involved and increase your onboarding completion rate. Who doesn't love progress tracking or a good game? Games will give you more onboarding data you can then use to reduce churn rates.

Lastly, you can send micro surveys to customers for instant feedback about your service.

One of the most important onboarding KPIs to track is the time to desired action

The faster you can complete user onboarding, the more quickly your customers can use your product. As a result, they will see value faster and have less time to look for alternatives.

You need to find a balance between the shortest time possible and a timeframe that would be overwhelmingly long. Once you find this sweet spot, you will improve your customer retention.

How can you find this sweet spot?

You do it by creating simple-to-understand onboarding materials that make your product easier to use.

Additionally, you can use gamification to help users stay motivated. Another great option is to include surveys, as mentioned previously, so you gather feedback from customers as they complete onboarding milestones.

Customer satisfaction is a metric you need to follow.

Understanding your customer's frame of mind as they complete your onboarding is necessary for understanding what you need to change or improve in your offering.

When you strictly focus on quantitative data, you undermine the needs of your users and their experiences. Doing so will lead customers to abandon your service. So, focus on qualitative data that tells you more about customers who stay with your business for long periods.

You can even jump on a call with them to understand their needs and why they have chosen your service.

It's best to try to reach out to those customers who didn't sign up for your services, too. When you reach out to these clients, you can understand where your service is lacking and improve it with the chance of winning their business later.

If you cannot schedule meetings due to a lack of customer response or time, try analyzing the number of email support or ticket requests you receive. Spend time analyzing these messages to understand the sentiment and how often users need help with a specific aspect of your service.

Here are some strategies for improving this.

You can use onboarding emails to improve customer engagement throughout onboarding.

Next, incorporate interactive videos and training that walk customers through using your product in various use cases.

Advance onboarding metrics you need to track

People have many options in today's digital world. If they cannot find what they want from your business immediately, they will find a business that offers a service that solves their problems faster. We covered basic metrics you should be following, but now we will explain advanced metrics you can use to deepen your understanding of your customer and product.

What is a customer health score?

A Customer Health Score is a composite metric that evaluates the overall health of your customer relationship.

It considers:

• product usage
• engagement
• satisfaction
• renewal intentions

A robust Customer Health Score should include metrics that reflect both the quantitative and qualitative aspects of the customer experience. Regularly monitoring and acting on this score can help proactively address potential issues.

As you collect data, you will understand how to improve your product holistically from all angles.

Leveragingonboarding data for customization

Utilizing user data to tailor the onboarding experience can improve the customer experience. The data you collect from your customers can help you customize the user journey based on:

• Role
• Industry
• Service usage patterns

Personalization makes users feel understood and supported, enhancing their overall experience.

Best tools and technologies for tracking SaaS onboarding metrics

Several tools and platforms are available to help companies track and analyze onboarding metrics.

These range from analytics tools to customer relationship management (CRM) systems.

Here are some tools you can use with use case examples to help you grow your business.

Best onboarding analytics tools

Analytics tools like Google Analytics, Mixpanel, or Amplitude can help companies collect and analyze data related to user interactions with their platforms. These tools can track user engagement, session duration, user flow, and other relevant metrics during the onboarding process.

Example: A company uses Google Analytics to monitor how many users complete each step of the onboarding process and at what stage they drop off or convert to paying customers.

Customer Relationship Management (CRM) Systems

CRM systems such as Salesforce, HubSpot, or Zendesk are not only used for managing customer relationships but can also provide valuable insights into the onboarding journey.

They allow companies to track communication and interactions with new users. In addition, you can also track how long your sales cycle is and discover ways of shortening it. Plus, CRM software is the best way to segment customers.

Example: A company uses Salesforce to record all customer interactions during the onboarding process, including:

• emails
• phone calls
• support tickets

To gain a holistic view of the onboarding experience.

User Behavior Tracking Tools

Tools like Hotjar or FullStory provide heatmaps, session recordings, and user behavior analysis, enabling SaaS companies to understand how users navigate their platforms and where they encounter difficulties. You can use the data gathered from these services to understand how users interact with your service and then visually modify your interface for their increased enjoyment.

Example: A SaaS company uses Hotjar to create heatmaps and session recordings to identify common stumbling blocks in the onboarding process, such as confusing UI elements or error messages.

Feedback Surveys and Forms: Services like SurveyMonkey or Typeform can be used to collect direct feedback from users during or after onboarding. This feedback can provide valuable insights into user satisfaction and areas for improvement.

Example: After onboarding, a company sends a Typeform survey to new users to gather feedback on their experience, including what they found helpful and what could be improved.

Integrating Technology into Onboarding Processes

Integrating technology into onboarding processes means using the data and insights collected through the mentioned tools to make informed decisions and improvements in real time.

For example, if analytics tools reveal that many users drop off at a particular step, the onboarding process can be adjusted to address the issue promptly. If CRM data shows customers are having trouble with a specific feature, support or training resources can be provided.

Example: A business uses Google Analytics to identify a drop-off point in their onboarding process where many users abandon the platform.

Based on this insight, they:

• Revamp that part of the onboarding process
• provide additional tooltips and tutorials
• monitor the impact of these changes through continuous analytics tracking

The approach mentioned is structured and iterative, ensuring the onboarding process is continually improved to meet user needs and behaviors.

Summary

In this article, we've covered the top 7 onboarding metrics you can use to understand your business and customers better. Using the metrics and tools in this post, you have all the tools you need to enhance your product and build a business that makes serious cash.

To ensure your efforts are fruitful, don't just track but make ongoing changes. You will see the biggest impact when you take action on the data you receive from these new metrics.

Frequently Asked Questions

What are the metrics for onboarding?

Onboarding success can be measured with job satisfaction, time to productivity, overall morale, employee turnover, and hiring managers' performance metrics. These give unique insights into onboarding and allow meaningful KPIs to be set for success.

How do you measure user onboarding success?

Measuring user onboarding success can be easily done by analyzing metrics such as retention rate, engagement rate, conversion rate, completion rate, time to value, feature adoption rate, activation rate, and the number of onboarding support tickets per day.

How long is the average onboarding for SaaS?

The average SaaS onboarding process takes around a week or less for most respondents. However, depending on the complexity of the product, it may take longer.

How can I improve the initial activation rate for my SaaS product?

To improve the initial activation rate for your SaaS product, focus on personalizing the onboarding process, offering proactive customer support, and creating a seamless self-service signup experience.

What strategies can help boost the conversion ratio during the onboarding process?

Optimizing onboarding, personalizing experiences, and leveraging customer insights are key to boosting trial-to-paid conversion rates.

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