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User Onboarding in Enterprise SaaS #prodmgmt

Guest Post by: Prakhar Agarwal (Mentee, Session 4, The Product Mentor) [Paired with Mentor, Sara Varki]


Nowadays, we all consume applications and platforms (software) over the web. “Software installation” is quickly becoming an old concept, especially for end users. Be it documents, photos, marketing, sales, or product, it’s all moving away from installing software on an operating system to just creating an account for a web-based service. This is the world of Software-as-a-Service (SaaS). Growth of SaaS companies in recent years has been explosive. Like all companies, these SaaS companies face several challenges broadly defined by the following three questions (along with the associated function of the company):

  • How do I get more visitors to our service and get them to sign-up? (Marketing)

  • How do I get more users to return to our service? (Product)

  • How do I get returning users to become customers? (Sales)

Customer Acquisition Cost (CAC), Churn, and LIfetime Value (LTV) are the KPIs used to check the health of a SaaS business. We track the funnel, calculate conversion rates, and search for repeatable patterns to make our revenue numbers. To be a successful company, the value proposition should be easy to understand, the product should be easy to use, and it should be easy to buy. If any of those three things falls short, the company fails. In my opinion, it can all be summed into Customer Experience. A blurb from Wikipedia [1]:

Hand writing Smiley on the Customer  - Customer Retention Customer experience (CX) is the product of an interaction between an organization and a customer over the duration of their relationship. This interaction includes a customer’s attraction, awareness, discovery, cultivation, advocacy and purchase and use of a service.

In this article, we will briefly explore one part of these interactions, specifically between the user and product itself. An effectively designed product will solve one or many user problems. A key element in successful user adoption is User Onboarding. While it sounds simple, it is the most critical and often the most ignored part of the product development cycle. We will explore this subject in the context of Enterprise SaaS where a solution is expected to solve multiple pains and generally has a lot of moving parts and complex workflows. We will discuss why onboarding should be a priority and how to do it correctly.

Why User Onboarding

Everything is about people.

People use things, people pay for things.
People require services, people provide services.
People use products, people develop products.

In all of the grand things in life, people are the only constant ingredient. So, it’s imperative that the experiences people have are delightful and memorable. All the functions in an organization should focus on this metric.

Above statements are a true reflection of my way of thinking about businesses as is evident from my LinkedIn summary.

1480302922795[1]Providing a great experience on all user touchpoints should be part of the core of all functions in a company. Specifically, user onboarding for the products should not be a project or a feature that gets released but then is not looked at for months or years; rather, it should be an element that is always evolving.

The essence of user onboarding is how quickly a product can provide value to the user by helping them solve their problem and getting them to the “wow” moment. For users of Enterprise SaaS products, it is critical that they feel in control of achieving their goals. There are several reasons why User Onboarding is so important:

  1. Quick Adoption and Frequent Releases: Traditionally, users are accustomed to locally-installed enterprise software, also known as shipped software. This software is not updated frequently and thereby a user gets a lot of time to become comfortable with it. Ultimately, such software gets very sticky and the companies reap rewards for a long time. So, these users bring a lot of baggage with them when they are trying to adopt new SaaS products. Therefore, it is important that the initial transition to the new SaaS paradigm is smooth and quick. The Unique Selling Point (USP) of SaaS products is mobility for users and an abstraction of several moving components. Successfully delivering such an abstraction requires replacing existing workflows while eliminating barriers. Also, this delivery model provides an opportunity for companies to introduce improvements and features more frequently. Extra care should be taken in such shorter release cycles to avoid disruption to users’ current workflows.

  1. Competition: Since SaaS products are now becoming mainstream, users have a lot of options and the cost of switching to a new product is relatively low. For the companies, the cost of customer acquisition is increasing since there is more competition. So, products can’t really win purely on functionality; achieving desired stickiness with their users will require a lot more. The usability of a product and onboarding experience is quickly becoming the differentiating factor. Consumer products were the first ones to take advantage of these notions and with a strong user-base overlap between consumer products and SaaS products, it was only a matter of time when users felt that business software needs to match the experience of non-business software, also known as “Consumerization of IT”.

  1. Lifetime Value: The goal of a great user onboarding for a SaaS product is to allow a user to extract maximum value in shortest time possible so that they become repeat users and potentially paid customers. Often, a user would be willing to pay for a premium service if it offers great onboarding experience and either eliminates a steep learning curve or manages it well. Bad user onboarding is a sure way to alienate potential customers. A user will try a product, and if they can’t reach to the value quickly, they will leave and never come back. In an Enterprise SaaS company, the sales cycles are short and the payback period is long. And, there’s always a risk of churn. So, the company should invest in right onboarding to reduce their churn and thereby increase their customer lifetime value.

Now that we understand why user onboarding is so critical to SaaS world, let’s see how it can be done right and few mistakes to be avoided.

How To Do Enterprise SaaS User Onboarding

AAEAAQAAAAAAAAw9AAAAJDdmZmFjZjNmLTJkNDItNDliMi05ZDI2LWViYWEwNGQxMTk3NA[1]One quick search about “SaaS Onboarding” will show thousands of results for books and articles advocating various methods to improve the experience for a new user. All these methods and ideologies have one thing in common – “reduce and control friction in the product”. Even with all the advice, the products that we develop and use on a daily basis have great visual appeal but less thought out user journey. In the last ten years, the advancement in application frameworks has had a significant impact on the visual layer of Enterprise SaaS products. The development is so quick that there’s a new framework every six months or so.

On the other hand, there has been less emphasis on measuring user perception and behavior and improving the onboarding based on those insights:

  1. Why did this user not use the product after signing-up?

  2. How much time does it take for the users to reach the first milestone?

  3. What percentage of the expected first-interaction behavior is the user completing?

  4. Are there any dead ends in the workflow that prevent the users to get early wins?

All these are important questions for a product manager to be able to improve the product adoption with first-time users.

Here’s a short framework to kickstart the improvement of user onboarding (and entire product in general) for Enterprise SaaS:

  1. Start from the end goal and work backward: Understand the user and their specific problems, and then design the product and market the value proposition. This way of thinking is getting standardized via the disciplines of user experience design and lays the groundwork for designing user onboarding. Result: With the user research done properly, the user onboarding will cater to the acute problems that a user faces while solving their pains and this will lead to a simple and focused product.

  1. Convey the value proposition clearly: People’s attention span is getting shorter; providing a clear value proposition goes a long way to create excitement and motivate a user to try the product. Correct messaging is a critical first step of onboarding. Find the content that led current users to the “aha” moment. Work with the sales team to learn what potential customers perceive as the value proposition. Then work with the marketing team to make sure those nuggets are presented well to the visitors in all web and print material. Show the users the promised land. Result: Users will be motivated before trying the product.

  1. framework[1]Get them in the door: Once a user understands your value proposition, it’s important to keep that momentum going by getting them into the product as soon as possible. Design the sign-up process to be quick and let the user get an early win. For example, if the sign-up process requires collecting a lot of information, it’s better to collect the most critical items first and the remaining information as the user progresses in the product. Tie the collection of these nuggets with various product actions. Result: Users will not be overwhelmed and would give you more information as they use the product.

  1. Find conversion actions: Track all the user activity in your product to identify the actions that led a user to become a customer. Or, just watch the users use your product and see what they do to reach the main goal. If available, work with the sales team to participate in potential customers’ product evaluation process. There is a heavy component of product analytics in this part of user onboarding improvement and always reveals very interesting insights! For example, if one of the conversion milestones for a data analytics product is to enable an integration, find out how much time a user takes  to get to that step and the number of steps that lead to it. In other words, work with the product analytics team to understand the user journey. Result: This will help reduce CAC.

  1. Balance Friction: Using the insights above, improve the flow to let the users reach the conversion actions more quickly. Eliminate all the extraneous steps that are not strongly tied to the value of the product. Make the flow intuitive so that a user  This will reduce the time from first interaction to conversion actions. Provide relevant feedback to the user during their onboarding to establish the notions of security, reliability and fun, wherever applicable. It’s best for the users as they extract more value and feel more confident, and it’s great for the company as the product gets sticky with user’s each new win. Result: This will drive down the churn rate.

In summary:

  1. Create meaningful experiences that let users get to the value immediately and continually

  2. Include user onboarding in the foundation layer of product development and let the entire organization strive for improving the user experience.

  3. Anything we can do to make it easier for a customer to get started with the product, the better.

Great user onboarding facilitates problem solving and gets out of the way of a user!

More About The Product Mentor
TPM-Short3-Logo4The Product Mentor is a program designed to pair Product Management Mentors and Mentees around the World, across all industries, from start-up to enterprise, guided by the fundamental goals…

Better Decisions. Better Products. Better Product People.

Each Session of the program runs for 6 months with paired individuals…

  • Conducting regular 1-on-1 mentor-mentee chats
  • Sharing experiences with the larger Product community
  • Participating in live-streamed product management lessons and Q&A
  • Mentors and Mentees sharing their product management knowledge with the broader community

Sign up to be a Mentor today & join an elite group of product management leaders!

Check out the Mentors & Enjoy!

Jeremy Horn
The Product Guy

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