ROI of everboarding
Here’s the deal: if you’re giving customers any attention at all, you’re investing in their onboarding. Whether 1-1 calls, manual emails and Slacks, or in-product flows and guides, every company with customers is already investing.
The real question then becomes: how much more to invest and in what “format”?
How much should you invest in customer onboarding?
At any semblance of maturity, a B2B SaaS product will want to offer onboarding and activation in every format, and across the whole customer journey. I.e. you shouldn’t have no humans or no help center or no in-product guidance or no product workflows to get started.
The question is how much.
And as with pretty much everything, there are diminishing returns in each facet. But that’s not helpful, so let’s look at some benchmarks:
- For companies with < $10M in ARR, target ~<20% in CS costs. That’s a lot! Above $100M in ARR? Get that closer to ~10%.
- Or put differently, anecdotally, ~20% of revenue churn can be attributed to poor or insufficient initial onboarding.
- And perhaps more importantly, on average, it costs 5 times more to acquire a new customer, than to retain an existing one, so losing a customer is expensive to replace.
On the product side, if you have an activation metric (i.e. account has launched X workflows, or that age-old Facebook 20 friends in 7 days) that is ~50% correlated with retention, then directionally, a 10% improvement in that metric could contribute 5% improvement in retention. That’s no joke. The science, of course, is finding and aligning on the right activation metric, which is different for every business.
Various experiences for customer onboarding
In the simplest terms, there are 4 formats you can use:
- Content outside your product
- Content in your product
- Native in-product workflows
Everyone starts here. Whether it’s part of a co-founder’s time, or a dedicated Implementation and Success team, B2B SaaS activation has humans involved. That’s a good thing: often we’re talking workflow and change management, which inherently requires understanding the customer’s business context and building trust and credibility beyond the tool’s features.
Yet, as we all know, this doesn’t scale. On average a B2B SaaS company will spend anywhere between 15-20% of revenue on some form of Success, of which about a quarter is spent on onboarding alone. That’s expensive.
The other thing that doesn’t scale is the physics of time. Customers may choose or want to get started at any given moment (including weekends and certainly across time-zones). Gating progress on calendars is antiquated friction.
Content outside your product
I won’t spend too much time here, but webinars, help centers, community forums, learning academies, whitepapers, etc. are all part of this category.
You have to have the basics (i.e. help center) but generally you’re catering to a pretty specific user-type who likes to sit down and consume. It can feel more academic than action-oriented, since, well, you’re not in the product.
Content in your product
Content in your product could mean in-app messages, guides, and of course, deeply embedded experiences like empty states, quick start guides, and full-page flows.
There’s a common saying that “onboarding is the only part of your product that every user sees.” (Assuming you offer onboarding not just for the 1st user, but for subsequent users – long live everboarding). Given the reach of onboarding, and the fact that any new surface area comes with low-hanging fruit, it’s wise to have something.
And yet, in-product onboarding is too often just a tour or a few pop-ups. If you’re going to do one thing in this area, consider making it an experience that matches the timeline of how your users onboard. If they onboard in minutes, then great, give them an onboarding that lasts minutes. But most B2B SaaS onboarding can take hours if not days/weeks. That means going for an experience that is available to greet them across sessions as they move towards your activation metric.
To avoid micro-optimizations, after building the basic initial onboarding experience, consider these other high leverage approaches:
- Bite-sized contextual guides, available around the most advanced features, or surfaces that feel like independent product areas. Make them opt-in, since landing on a page alone isn't a signal that the user has intent.
- Persona based onboarding. That exec coming in to check on reports doesn’t need to adopt the core workflow.
- Feature-based onboarding. As your product matures, it’s unlikely that there’s only a linear path through your product. Allow users to pick which use-case or feature to start with and show them ways of accessing the other paths when they’re done.
Native in-product workflows
Integrations are a great example of what it means to invest here. Setting up a B2B SaaS tool frequently means configuring some data integrations, so we consider this part of onboarding. Yet there’s a chasm between asking users to click a help center article, scroll three pages, open 2 new tabs, hunt down a magical API token and paste it into your app’s UI and a one-click OAuth integration. It’s not always feasible, but this is an example where the core product experience just has to be great. No amount of external or internal content or Zoom screensharing will make this delightful.
How to improve your customer onboarding experience?
At this point, you’re probably thinking:
- I should go figure out how much we’re spending on CS (and how much of their time is on onboarding)
- I wonder what our activation metric is (and how highly it’s correlated with retention)
- I wonder what “greenfield” opportunities we haven’t yet tackled
Figuring all this out has to come from your own team, because only they understand the nuances of your GTM motions and your customer pains. But once you’ve figured out the “what”, the “how” is just as important.
When it comes to building your in-product onboarding journeys (excluding native workflows like integrations), we strongly believe you should leverage third party tools.
Why use Bento for your customer onboarding checklist?
- Building initial onboarding for a Series A or B company is likely a 3-6 week effort including design, content, build, and instrumentation. After you come up with the content, building and shipping it with Bento is a day.
- That's time back to work on other initiatives
- Even better, it means your funnel is less-leaky, sooner. That means every dollar spent on customer acquisition will now yield greater returns and less churn.
It’s not “one and done”.
Think about how many times your Sales team has revamped the talk track. Or your product has iterated. The same goes for your onboarding. Resourcing a build the first time is expensive, but it’s those iterations that add up. If the initial build takes a month, every copy change or illustration update is a Jira ticket, that has to get estimated, that then has to go through code review. A lot of touch points for not that much change.
It allows you to shift the work away from engineers
- Engineers are usually better aligned to core product work, and Success (or even product) to customers.
- By giving non-engineers a way to build and iterate on onboarding, you reduce how much context has to get shared, and therefore, how much faster you can go.
- Align insights, align the work.
If you knew you could affect 20% of revenue churn with a week of planning and a day of execution, would you wait? Onboarding isn’t just Customer Success’s responsibility. It’s a company-wide responsibility because it’s the critical bridge between selling value, and delivering value. On the product side we spend months and years building the means of delivering value – now create the bridge that lets customers reach it.
How to design an effective onboarding checklist
Every onboarding checklist project includes screenshotting examples from other applications. In this post, we examine why checklists are a great form factor, as well as the most popular designs in the wild.
How to build a customer onboarding checklist
Building an onboarding checklist might seem straightforward at first blush. But creating an effective one entails thinking about its structure and more importantly, its goals.
Everything you need to start everboarding* See Bento
and reduce churn in days.
*Not a typo