Product-Led Onboarding

Product-Led Onboarding

Author
Wes Bush and Ramli John
Year
2021
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Review

Product-Led Onboarding by Ramil John is a valuable and thorough guide that explores the creation of effective user onboarding experiences. John highlights the significance of comprehending user needs and guiding them through a series of "Aha" moments to encourage habitual product usage. The book offers practical strategies and frameworks to assist companies in optimising their onboarding process.

If you have overlooked onboarding, you may be able to leverage it as a means to enhance user retention and have a significant impact on monthly recurring revenues.

Pair with Wes Bush’s ‘Product-Led Growth’ to get a great introduction to the Product-Led universe.

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Key Takeaways

The 20% that gave me 80% of the value.

  • If you’re neglecting the needs of first time users, you’re likely wasting a large portion of the money you’re spending on sales, marketing and product teams.
  • The user onboarding journey is about guiding users through a series of "Aha" moments.
  • User onboarding starts with acquisition, when the product’s positioning and perceived value are communicated. Set clear expectations and screen out users who shouldn't be signing up.
  • Remember a paying customer doesn't always equate to a happy customer.
  • The end goal of user onboarding is not only to convert users into paying customers but to make sure they stick around for a long time.
  • The initial user onboarding experience concludes once a signal is received indicating that the user is deriving significant value from the product and is highly likely to continue using it.
  • The goal of onboarding is help users improve their lives (to make them successful) NOT to teach them how your product works.
  • Onboarding Value Stages:
    • The Moment of Value Perception (MVP): This is when users first visualize a product in the context of their situation. The MVP usually occurs before signing up.
      • For Slack: Users understand how Slack could help their team communicate and share information more efficiently than email or other messaging tools.
    • The Moment of Value Realisation (MVR): This is when users first experience a product’s value and achieve their desired outcome with the product for the first time.
      • For Slack: A users sends their first message to a colleague.
    • The Moment of Value Adoption (MVA): This is when users start using a product regularly and integrate it into their life or workflow.
      • For Slack: Users from the same team exchange 2,000 messages with each other.
  • Habit-forming onboarding requires users to experience the product's value multiple times.
  • Onboarding isn’t strictly about first use. Think of users as going through cycles of perceiving, experiencing, and adopting your product to solve problems they have. Onboarding is critical for revenue expansion (increasing ARPU).
  • User onboarding is the crux of product-led growth: it’s a huge retention lever.
    • Retention plays a significant role in boosting revenue, retention has an outsized impact on monthly recurring revenue (MRR).
    • Good user onboarding leads to lower CAC, as higher activation rates make marketing more cost effective.
  • Onboarding is often under-optimised, or treated as low priority.
  • Five challenges you might face when trying to improve this experience:
    • No clear ownership of user onboarding.
    • Only the product team works on improving user onboarding.
    • Misaligned definition of user onboarding across teams.
    • No clear quantitative criteria for successfully onboarded users.
    • No clear strategy to continuously improve user onboarding.
  • Five Common Signs of Bad User Onboarding:
    • Users don’t complete your signup process.
    • Users sign up and don’t come back.
    • Users don’t upgrade to a paid account.
    • A high volume of new customers leaves after paying their first invoice.
    • The customer acquisition cost (CAC) is high or continues to rise.
  • Help new users repeatedly find value from your product, and they’ll stick with you
In the first 15 seconds of every new experience, people are lazy, vain, and selfish. Scott Belsky, Chief Product Officer at Adobe.
  • Time-to-Value (TTV): Minimising the time it takes for new customers to realise value from a product is crucial for user onboarding.
    • It's not about having the shortest possible TTV, but rather ensuring that people experience the product's value in the minimum amount of time, in such a way that they continue using it.
  • In a product-led world, users are easy-come-easy-go, the tolerance for delays and frustrations is much smaller.
  • The EUREKA Framework The six-step process to shorten the TTV for more new users to be successfully onboarded to your product.
    1. Create a collaborative onboarding team across functions and departments.
    2. Identify user's desired outcomes and understand their perception of value.
    3. Define clear success `using it.
    4. Optimize the onboarding path to minimize time to value.
    5. Engage new users with triggers both inside and outside the product.
    6. Continuously analyze results, make changes, and iterate on the onboarding experience.
  • Create a cross-functional onboarding team, involving different departments, to capture their knowledge and expertise
  • Start by identifying which teams contribute to the success of new users.
    • Product managers orchestrate the in-app user onboarding experience.
    • Marketers communicate the value of the product.
    • Customer success teams show users immediate value.
    • Salespeople motivate users to build a deeper habit with the product
  • You need high-level executive sponsorship → you’ll need that authority to cross the bounds of established departmental responsibilities.
  • Don’t expect colleagues to magically understand the need for an onboarding team. Create the retention curves for users who did and didn’t complete your current onboarding process to make the case.
  • The key to improving user onboarding is having an onboarding team that have a clear understanding of the desired outcomes of your users.
  • Onboarding is about changing someone’s behaviour to improve their life. The primary goal of onboarding is to help users become better versions of themselves.
  • Onboarding shouldn’t focus on the product, or its characteristics, it should focus on creating a better life. People are buying a better version of themselves.
  • You want to know:
    • The functional, emotional, and social jobs that your users are looking to hire a product or service for.
    • What their desired outcome is.
    • Any anxieties, objections, and frustrations they might have to switch from their Other existing solutions they’re currently considering.
    • The number one reason why they chose your product or service over others.
  • Use JTBD Interviews to uncover your product's functional, emotional, and social jobs, along with the progress-making forces.
  • Talk to these different groups: new users, Shoppers, Active customers, Inactive customers, and Churned customers.
  • Involve your whole onboarding team, so everyone is on the same page. Summarise your findings on a User Success Canvas.
  • There are three moments that matter the most to measure onboarding success:
    • The Signup: A signal of a user's interest. The higher the friction is during the signup process, the higher the signal of interest.
    • The First Strike: Helping users achieve their desired outcome, or Customer Job, as quickly as possible.
    • The Product Adoption Indicator - The second measure of success is the moment users start using a product consistently.
  • The Product Adoption Indicator is a leading indicator of user retention and product adoption. It’s an early but strong signal that users are likely to continue using a product going forward.
    • At Facebook, users who add seven friends in ten days.
    • At Twitter, users who follow 30 people
    • At Slack, teams who have exchanged 2,000 messages
  • Good PAIs have a few common characteristics:
    • PAIs should be leading indicators of user retention.
    • PAIs should focus on the repetition of one key product engagement action.
    • PAIs should be easy to understand and communicate with others.
    • PAIs should be time-bound.
    • PAIs should come early in the user's journey.
  • Action Items to Improve Your User Onboarding:
    • Get a baseline measure of cohort retention.
    • Create a product Adoption indicator hypothesis:
      • Create a hypothesis about your retention indicator in this format:
        • If new users perform at least [X] of [Product Action]…
        • …. during the first [SHORT TIME PERIOD]….
        • …. they’re likely to continue using our product for [LONGER TIME PERIOD]…
      • E.g. for WhatsApp: If new users send at least 3 messages on day 1, they’re more likely to continue using it after 21 days.
      • The point at which your retention curve flattens is going to provide the most informative measure (where most of those who are going to drop out, have dropped out)
    • Gather data to validate your hypothesis.
      • Play around until you have maximised the overlap between:
        • Users who continue using your product for [LONGER TIME PERIOD]…
        • And Users who do at least [X] of [Product Action] in [SHORT TIME PERIOD]
      • Gather data for three segments:
        • Users that retained BUT didn’t do [X of Product Action] in [SHORT PERIOD]
        • Users that retained AND did [X of Product Action] in [SHORT PERIOD]
        • Users who didn’t retain but did [X of Product Action] in [SHORT PERIOD]
    • Compare the retention curves and validate the PAI. Plot a retention curve for a cohort that did [X of Product Action] vs all users. If you have a strong measure, they should be have significantly higher retention over the [LONGER TIME PERIOD]
    • Communicate your PAI widely and often until it’s adopted by your entire organisation.
  • The Bowling Alley Framework was first introduced by Wes Bush. The goal is to help get first-time users achieve their desired outcome (a strike).
  • Two types of bumper can help onboard new users:
    • Product Bumpers: In-app triggers that guide users to experiencing value (e.g. welcome messages, product tours, and progress bars).
    • Conversational Bumpers: External triggers that bring them back into the application. E.g. onboarding emails, SMS, browser notifications
  • ‘Straight-Line Onboarding’ refers to the minimum number of steps a user needs to take to achieve value. Most onboarding experiences aren’t a straight line, often over 30% of steps are superfluous, and end up creating more friction for new users than necessary.
  • Try and decrease the time-to-value (TTV), the amount of time it takes a new customer to realise the value of a product.

How To Build Your Straight-Line Onboarding

  • Map out your onboarding path, document each step that's required for users to achieve before they become highly engaged users. Start with the first customer touchpoint.
  • Evaluate each step. Score each step against necessity, ease and simplicity
  • Necessity: remove or delay any steps that don’t lead to ‘the first strike’. Evaluate with your team if the value of each step outweighs the risk it poses of a drop-off.
    • You may be able to benefit from the ‘The Ikea Effect’. People place a higher value on products they’ve created or customised.
    • Questions to ask before cutting an onboarding step:
      • Does it directly help users to the next step in the onboarding process and toward the ‘first strike’?
      • Does it help personalise the onboarding experience for users?
      • Does it delight users and get them excited about the product?
  • Ease
    • Reorganise the steps from easiest to hardest The smaller the initial ask, the more likely the user is to agree to bigger requests (as per the Principle of Commitment and Consistency). So start small then gradually increase difficulty.
    • Consider showing only the core features of a product first, then unveil new options as customers start to use your product.
    • Get users to invest time into personalising or using the product… before you ask them to sign up. You’ll benefit from the sunk cost effect
  • Simplicity: show fewer options and break down complex signup and setup processes into smaller steps. If you can’t remove or delay the step simplify it.
    • Hick’s Law: the time it takes for users to make a decision increases logarithmically as you increase their number of choices.
    • Consider progressive disclosure (show only a few options, reveal more as appropriate)
    • Simplify complex forms by breaking them up into multiple pages. Move the majority of the fields to the later pages.
  • Segment your users and your onboarding. Segmentation is conversion steroids for user onboarding. If you cater to different Jobs To Be Done or user needs, then your onboarding shouldn’t be one-size-fits-all. Tailor the onboarding experience to each Customer Job.
    • Have a number of onboarding flows aimed at each job. Use different bumpers to help users accomplish the job they hired your product to do.
  • The EUREKA Framework emphasises the three elements from the BJ Fogg Behaviour Model that must converge simultaneously for a behavioural switch to occur:
    • Motivation (M): The desire or willingness to perform the new behaviour.
    • Ability (A): The ease of performing the new behaviour.
    • Prompt (P): The cue or trigger to perform the new behaviour.
  • Make It Easy: Learn how to use visual cues, helpful empty states, and content templates to make user onboarding easier.
  • Increase Motivation: Discover different ways to increase your users’ motivation inside and outside the product. Refrain from using incentives, instead speak to your users desires, show them progress, welcome them, celebrate wins and use social proof.
  • Create Behaviour-Based Prompts to nudge users into actions. The two critical moments for prompts are:
    • To help them achieve their their desired outcome experience the value of the product
    • To help them continue to use a product until habitual
  • Effective prompts should be omni-channel, personalised, timely and reiterate the value of the product.
  • For onboarding, iterative improvement beats big launches
    • Learn by doing
    • Analyse results, reiterate and implement changes quickly
  • Companies that learn the quickest have a competitive advantage
  • Use the ‘Triple A Sprint’ process: Analyse, Ask, Act
  • Use a simple impact/effort matrix to prioritise.
  • Split test any onboarding changes. Compare retention rates between different onboarding processes.
  • Share learnings from and success stories widely across the organisation.
  • Go beyond the traditional onboarding. Apply EUREKA process to different steps in the user journey, entry points and customer jobs.
  • Try and get users to go wider and deeper with your product. Revenue will follow
  • Salespeople can enhance the buying process and increase conversion rates by 3.5x compared to a low-touch, product-led approach.
  • Most product-led companies eventually hire a sales team. Slack is product-led BUT has a sales team that secures 40% of revenue.
  • Sales-assisted or hybrid onboarding is using a combination of product-led and sales-led strategies for onboarding new users.
  • What you’re hunting for and how complex your buying process should help determine your approach.
    • If annual value is high, and the buying process is complex use high-touch sales (e.g. Cisco).
    • If annual value is low, and the buying process is easy use self-checkout, and onboard new users with a low-touch, product-led process. (e.g. Netflix)
    • If annual value $2,000 is $100,000 then consider a mix (e.g. Slack)
  • Onboarding is a continuum, from low-touch, product-led user onboarding to high-touch, sales-led onboarding. The best place for you depends on your product, pricing, market, and buyer preferences.
  • Sales can complement Self-Serve Onboarding:
    1. They can direct users to experience the value of your product.
    2. They can facilitate product penetration or expansion. E.g. account managers help get other teams within that organisation to use Slack.
    3. They can guide users in the buying process if it isn’t straightforward (e.g. security audits, procurement sign-offs, requests for customised Service Level Agreements)
  • Sales in a product led growth model should…
    • Sales shift from chasing leads to coaching users.
    • Sales need to frame the product in different ways to different audiences.
    • Sales leverage product engagement data in the sales process.
  • Sales should start using a Product Qualified Lead (PQL) instead of Marketing Qualified Lead (MQL):
    • A PQL is a measure of new user engagement, a combination of:
      • Activation: completing straight-line onboarding
      • Engagement: How often are they using the product, especially the core features?
        • Define your own criteria and rank users by engagement
          • Example criteria: Product visions, features tested, feature adoption speed
    • Focus sales-assisted onboarding energy on PQLs who fit your ideal customer profile.
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Deep Summary

Longer form notes, typically condensed, reworded and de-duplicated.

Full Summary

Introduction

  • User onboarding is the only part of a product that everyone will experience. For most products 40% to 60% of users will sign up once and never come back.
  • If you’re neglecting the needs of first time users, you’re likely wasting a large portion of the money you’re spending on sales, marketing and product teams.
  • Your product success depends on your onboarding experience, its time to stop neglecting it.
  • A good onboarding process helps new users quickly see the value of a product. This can lead to more users having a positive experience and becoming advocates for the product.
  • Done badly, it will negatively impact growth, including user retention, revenue growth, and customer acquisition cost

Part I. The Onboarding Fundamentals

Chapter 1: User Onboarding – Your Product’s First Impression

  • A product's growth relies on the initial user experience. This is particularly crucial for companies where first impressions are made during the "user onboarding" process.
    • If a user has a bad first experience, they may quickly discard it and become critics, which can hinder your company's growth.
  • Onboarding Myths:
    1. Myth: The goal of user onboarding is for someone to experience that first "Aha" moment.
      • Reality: The user onboarding journey is about guiding users through a series of "Aha" moments. Aha moments start as early as the first touchpoint, when users picture the product solving their problem.
    2. Myth: User onboarding starts after a user signs up for a product
      • Reality: User onboarding starts with acquisition, when the product’s positioning and perceived value are communicated. Set clear expectations and screen out users who shouldn't be signing up.
    3. Myth: User onboarding ends after a user becomes a paying customer.
      • Reality: Paying users are not necessarily successfully onboarded users. A paying customer doesn't always equate to a happy customer. It’s common to see a high volume of new, paying customers cancel their account soon after their first payment.
  • Slack declares onboarding a success when a team has exchanged 2000 messages. As tgeur research showed that 93% of teams that hit that threshold never stopped using Slack.
  • Given that acquiring new customers can cost up to five times more than retaining existing ones, focus on increasing customer retention. Even a 5% increase can significantly boost profit by 25% - 95%.
  • The end goal of user onboarding is not only to convert users into paying customers but to make sure they stick around for a long time.
  • The initial user onboarding experience concludes once a signal is received indicating that the user is deriving significant value from the product and is highly likely to continue using it.
  • User onboarding bridges Acquisition, Activation and leads to Retention.
User onboarding is the process that takes people from perceiving, experiencing, and adopting the product’s value to improve their lives.
  • The goal of onboarding is help users improve their lives (to make them successful) NOT to teach them how your product works.
  • Onboarding Value Stages:
    • The Moment of Value Perception (MVP): This is when users first visualize a product in the context of their situation. The MVP usually occurs before signing up.
      • For Slack: Users understand how Slack could help their team communicate and share information more efficiently than email or other messaging tools.
    • The Moment of Value Realisation (MVR): This is when users first experience a product’s value and achieve their desired outcome with the product for the first time.
      • For Slack: A users sends their first message to a colleague.
    • The Moment of Value Adoption (MVA): This is when users start using a product regularly and integrate it into their life or workflow.
      • For Slack: Users from the same team exchange 2,000 messages with each other.
  • A key goal of onboarding is to help users transition from old habits to new ones with your product at the centre of them. Habit-forming onboarding requires users to experience the product's value multiple times. Once users have used the product enough, they're more likely to keep using it.
  • User onboarding is cyclical: users should go through a new cycle of perceiving, experiencing, and adopting additional features, capabilities, or use cases of your product. User onboarding is critical for revenue expansion and increasing the average revenue per user (ARPU).

Chapter 2: The Crux Of The Product-Led Growth Strategy

  • User onboarding is the crux of product-led growth:
    • User onboarding is a retention lever.
    • Retention plays a significant role in boosting revenue, retention has an outsized impact on monthly recurring revenue (MRR).
    • Good user onboarding leads to lower CAC, as higher activation rates make marketing more cost effective.
  • Onboarding is often under-optimised, or treated as low priority.
  • Five challenges you might face when trying to improve this experience:
    • No clear ownership of user onboarding.
    • Only the product team works on improving user onboarding.
    • Misaligned definition of user onboarding across teams.
    • No clear quantitative criteria for successfully onboarded users.
    • No clear strategy to continuously improve user onboarding.
  • Five Common Signs of Bad User Onboarding:
    • Users don’t complete your signup process.
    • Users sign up and don’t come back.
    • Users don’t upgrade to a paid account.
    • A high volume of new customers leaves after paying their first invoice.
    • The customer acquisition cost (CAC) is high or continues to rise.
  • Help new users repeatedly find value from your product, and they’ll stick with you
Good OnBoarding
Bad onboarding
Complements the product
Gets in the way
Helpful, topical and contextual
Isn’t relevant to users
Focuses on helping users experience value
Overwhelms users and ‘teaches’ them too much
Personalised based on desired outcome
One size fits all, regardless of desired outcome

Chapter 3: An Overview of the EUREKA Framework

Building a good customer experience does not happen by accident. It happens by design. - Clare Muscutt
In the first 15 seconds of every new experience, people are lazy, vain, and selfish. Scott Belsky, Chief Product Officer at Adobe.
  • We are lazy: we don’t have time or energy to figure out what a new product is or what it’s not.
    • How will this product help me?
    • How is this product better than what I'm doing right now?
  • We are vain: We care about how our friends and colleagues perceive us.
    • How will I look if my friends or colleagues found out I'm using this product?
  • We are selfish: We want to know what’s in it for us.
    • Why would I want to drop what I'm currently doing and replace it with this?
  • Time-to-Value: Minimizing the time it takes for new customers to realize value from a product is crucial for user onboarding. It's not about having the shortest possible Time-to-Value, but rather ensuring that people experience the product's value in the minimum amount of time, in such a way that they continue using it.
  • In a product-led world where users are easy-come-easy-go (because there is usually no upfront cost), the tolerance for delays and frustrations is much smaller. If your TTV is too long, new users will leave… for good.
  • Process over Prescription
    • Instead of explaining what you should and should not do with user onboarding, my goal is to provide a framework and process to help your users perceive, experience, and adopt your product.

The EUREKA Framework

  • This six-step process will shorten the TTV for more new users to be successfully onboarded to your product.
    1. Create a collaborative onboarding team across functions and departments.
    2. Identify user's desired outcomes and understand their perception of value.
    3. Define clear success `using it.
    4. Optimize the onboarding path to minimize time to value.
    5. Engage new users with triggers both inside and outside the product.
    6. Continuously analyze results, make changes, and iterate on the onboarding experience.

Part II. The EUREKA Framework

Chapter 4: Establish an Onboarding Team

  • User onboarding, often sits between a number of teams.
  • Create a cross-functional onboarding team, involving different departments, to capture their knowledge and expertise
  • There’s no one size fits all team shape, it’ll vary by product, company and scope of work.
  • Start by identifying which teams contribute to the success of new users.
    • Product managers orchestrate the in-app user onboarding experience.
    • Marketers communicate the value of the product.
    • Customer success teams show users immediate value.
    • Salespeople motivate users to build a deeper habit with the product
  • Decide on who should be involved and what their primary responsibilities are.
  • Whoever owns user onboarding needs to ensure it’s a cross-functional effort
  • You need high-level executive sponsorship:
    • Have them visibly delegate responsibility.
    • Your team will need that authority to cross the bounds of established departmental responsibilities.
    • You’ll have to battle bureaucracy, inefficiency, and inertia.
  • Gaining Support: Don’t expect colleagues to magically understand the need for an onboarding team. Create the retention curves for users who did and didn’t complete your current onboarding process to make the case.
  • Help your team come to a common understanding of what onboarding means to your company.
  • Everyone needs to be aligned. Ask the following questions:
    • How do you define user onboarding?
    • Why is user onboarding important to your product’s growth?
    • When does user onboarding start?
    • Is it after a user has already signed up for your product?
    • When does user onboarding end?
    • How do you define a successfully onboarded team or user?
    • What are the biggest opportunities and challenges in your product’s onboarding?
  • Consider a kickoff meeting to do the following..
    • Agree the common goal of the onboarding team
    • Identify the core team members and their functions
    • Emphasise the critical role of the onboarding team in company growth
    • Define what success looks like and document it
    • Agree who’s going to gather the data you’ll need to understand your user’s desired outcome:
      • Who are your best customers?
      • What do they do early on in the user onboarding process?
      • How many new users sign up for the product and never come back?
      • What are some reasons why?
      • Why did new users sign up for your product?
      • What triggered them to sign up?
      • Where are users getting stuck and dropping off in the user onboarding journey?Why?

Chapter 5: Understand Your Users’ Desired Outcomes

  • When individuals register for a new product, it signifies a sense of optimism, as they do so with the belief that it will enhance their life.
  • The ability to deliver on this belief depends on your comprehension of what they are hopeful for. What drove them to sign up for your product?What were their aspirations that they couldn't fulfil previously?
  • Your onboarding team must have a clear understanding of the desired outcomes of your users.
  • If you make a misstep in this crucial stage of the Eureka framework, everything else will falter, as you need to discern the users' preferences in order to design a dependable onboarding process
  • Onboarding is about changing someone’s behaviour to improve their life. The primary goal of onboarding is to help users become better versions of themselves.
  • Onboarding shouldn’t focus on the product, or its characteristics, it should focus on creating a better life. People are buying a better version of themselves.
Upgrade your user, not your product. Don’t build better cameras, build better photographers. Kathy Sierra.

Your Product’s Job Interview

  • Use the Jobs to be Done framework. JTBD enable a life transformation, customers "hire" products to solve a problem or to satisfy a need.
  • Three implications of the JTBD framework:
    1. Customer Jobs are solution agnostic. Focus on users' needs and problems, not the solution. Dig deep to understand the root problem that led them to seek a solution.
    2. "Job openings" are created by circumstances in users' lives. Understanding their circumstances and pain points is more important than product features and customer characteristics.
    3. User onboarding is like a job interview for the Customer Job. To succeed in the interview, you need to know the job you're being interviewed for.
  • The Three Components of Customer Jobs:
    • Functional: Customer Jobs involve specific outcomes the users experience after working with a product.
    • Emotional: Products meet an emotional need for people who use them. When it comes to your product, what emotions do you want your customers to feel or avoid feeling as a result of using it?
    • Social: We invest time and effort into a product in a social context. What impact does your product have on how others perceive your customers?
  • Progress-Making Forces: To onboard customers successfully to a complex product, you need to understand the push, strengthen the pull, calm anxiety, and overcome inertia.
  • Understanding your users through customer research is the key to improving user onboarding and retention.
  • Use JTBD Interviews to uncover your product's functional, emotional, and social jobs, along with the progress-making forces.
  • Talk to these different groups: new users, Shoppers, Active customers, Inactive customers, and Churned customers.
  • The useful insights from user interviews can help the onboarding team deliver a more engaged, relevant, and impactful user onboarding experience.
  • Involve your whole onboarding team, so everyone is on the same page. Summarise your findings on a User Success Canvas.
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Chapter 6: Refine Your Onboarding Success Milestones

  • There are three moments that matter the most to measure onboarding success: These three success criteria are tied to key milestones in the user onboarding: the Moment of Value Perception, Moment of Value Experience, and Moment of Value Adoption.
  • The Signup: A signal of a user's interest. The higher the friction is during the signup process, the higher the signal of interest.
    • Opt-out free trials that require credit card info attract fewer but higher-quality signups who are more likely to convert. Conversion can be as high as 60%.
    • Opt-in trials that don't require credit card info upfront will increase number of users, buy conversion could be as low as 5% =
    • If your intent is to get more people to try your product, the best option is to make your signup process as frictionless as possible.
    • A stronger signal of onboarding success is when users first experience the product's value…
  • The First Strike: Helping users achieve their desired outcome, or Customer Job, as quickly as possible.
    • A necessary product action users must take to accomplish their desired outcome or Customer Job. Examples:
      • For Canva, it’s exporting or sharing a finalised design.
      • For Zoom, it's hosting or attending a Zoom meeting.
      • For eCommerce stores, it's a purchase.
    • The more problems your product solves the harder it is to define. Context and segmentation are key, there could be different first strikes,
  • The Product Adoption Indicator: the moment users start using a product consistently.
    • At Facebook, users who add seven friends in ten days.
    • At Twitter, users who follow 30 people
    • At Slack, teams who have exchanged 2,000 messages
  • Habit-forming user onboarding requires users to experience the value of a product more than once. If new users have used the product enough times, they're more likely to continue with it going forward.
  • The Product Adoption Indicator is a leading indicator of user retention and product adoption. It’s an early but strong signal that users are likely to continue using a product going forward.
    • Others call it the magic number
  • Good PAIs have a few common characteristics:
    • PAIs should be leading indicators of user retention.
    • PAIs should focus on the repetition of one key product engagement action.
    • PAIs should be easy to understand and communicate with others.
    • PAIs should be time-bound.
    • PAIs should come early in the user's journey.
  • The Five Steps To Determine Your PAI:
    1. Get a baseline measurement of your retention.
      • Perform a cohort analysis.
      • Plot a retention curve
        • E.g. The 10k people who download your app on Jan 1st are your cohort
        • Plot how many of them are active on day 1,2,3,4,5,6 and 7
        • Divide those left vs those who started, and x100 to get your retention rate %
        Users
        Day 0
        Day 1
        Day 2
        Day 3
        Day 4
        Day 5
        Day 6
        Day 7
        10,00
        100%
        28.1%
        17.9%
        20.6%
        22.7%
        18.7%
        15.3%
        15.1%
    2. Create a PAI hypothesis.
      • Create a hypothesis about your retention indicator in this format:
        • If new users perform at least [X] of [Product Action]…
        • …. during the first [SHORT TIME PERIOD]….
        • …. they’re likely to continue using our product for [LONGER TIME PERIOD]…
      • X shouldn’t be 1, as habits are built with repetition
      • We use a short time period as we want to create a leading indicator that has predictive power. We want a fast signal.
      • The point at which your retention curve flattens is going to provide the most informative measure (where most of those who are going to drop out, have dropped out)
      • For WhatsApp: If new users send at least 3 messages on day 1, they’re more likely to continue using it after 21 days.
  • Gather data to validate your hypothesis.
    • Play around until you have maximised the overlap between:
      • Users who continue using your product for [LONGER TIME PERIOD]…
      • And Users who do at least [X] of [Product Action] in [SHORT TIME PERIOD]
    • Gather data for three segments:
      • Users that retained BUT didn’t do [X of Product Action] in [SHORT PERIOD]
      • Users that retained AND did [X of Product Action] in [SHORT PERIOD]
      • Users who didn’t retain but did [X of Product Action] in [SHORT PERIOD]
      Create a table than varies this for each value of [X] to see which will be the best measure.
      image
  • Compare the retention curves and validate the PAI.
    • Plot a retention curve for a cohort that did [X of Product Action] vs all users.
    • If you have a strong measure, they should be have significantly higher retention over the [LONGER TIME PERIOD]
  • Communicate your PAI widely and often until it’s adopted by your entire organisation.
  • Product Qualified Leads and the PAI.
    • PQLs are users who have achieved meaningful value in a product.
    • A PQL could be the same thing as a PAI, but it doesn't have to be.
    • Consider setting your PQL to the moment users achieve their desired outcome for the first time.
  • All of this required the implementation of a Product Analytics Tool to track meaningful product events and metrics.

Chapter 7: Evaluate Your Onboarding Path

Straight-Line Onboarding

image
  • The Bowling Alley Framework was first introduced by Wes Bush.
  • The goal is to help get first-time users achieve their desired outcome (a strike).
  • Two types of bumper can help onboard new users:
    • Product Bumpers: In-app triggers that guide users to experiencing value (e.g. welcome messages, product tours, and progress bars).
    • Conversational Bumpers: External triggers that bring them back into the application. E.g. onboarding emails, SMS, browser notifications
  • ‘Straight-Line Onboarding’ refers to the minimum number of steps a user needs to take to achieve value. Most onboarding experiences aren’t a straight line, often over 30% of steps are superfluous, and end up creating more friction for new users than necessary.
  • Creating a Straight-Line Onboarding experience is critical in getting more users to experience a product’s value.
  • Try and decrease the time-to-value (TTV), the amount of time it takes a new customer to realise the value of a product.
  • If TTV is short customers are getting a faster return on their investment of time

How To Build Your Straight-Line Onboarding

  • Map out your onboarding path
    • Sign up for your own product as if it's your first time.
    • Map out and document each step that's required for users to achieve before they become highly engaged users.
    • Reference every field that you're asking users to complete, include each button they need to click.
    • Grab screenshots of each step for later reference.
    • ⚠️ Remember onboarding begins with the first customer touchpoint ⚠️. Study your product from the begin of their user journey, that could be a Google Search or a marketing blog post.
  • Evaluate each step. Score each step against necessity, ease and simplicity
  • Necessity: remove or delay any steps that don’t lead to ‘the first strike’.
    • Evaluate with your team if the value of each step outweighs the risk it poses of a drop-off.
    • Label each step:
      • Green: absolutely necessary to achieve a first strike
      • Yellow: steps that can be delayed after the first strike
      • Red: steps that can be removed completely
      ℹ️
      Requiring users to confirm an email address is a big conversion killer. Expect to lose 10%-30% of users at this step.
    • Remove or delay what steps you can.
    • Don’t cut too deep, sometimes friction can help with onboarding:
    • If clever you can benefit from the ‘The Ikea Effect’. People place a higher value on products they’ve created or customised.
    • Questions to ask before cutting an onboarding step:
      • Does it directly help users to the next step in the onboarding process and toward the ‘first strike’?
      • Does it help personalise the onboarding experience for users?
      • Does it delight users and get them excited about the product?
  • Ease: reorganise the steps from easiest to hardest
    • Three big ideas:
      • Reorganise the steps from easiest to hardest. The smaller the initial ask, the more likely the user is to agree to bigger requests (as per the Principle of Commitment and Consistency). So start small then gradually increase difficulty.
      • Consider showing only the core features of a product first, then unveil new options as customers start to use your product.
      • Get users to invest time into personalising or using the product… before you ask them to sign up. You’ll benefit from the sunk cost effect
  • Simplicity: show fewer options and break down complex signup and setup processes into smaller steps
    • If you can’t remove or delay the step simplify it.
    • Hick’s Law: the time it takes for users to make a decision increases logarithmically as you increase their number of choices
    • Consider progressive disclosure (show only a few options, reveal more as appropriate)
    • Simplify complex forms by breaking them up into multiple pages
      • Move the majority of the fields to the later pages
  • Finalise your Straight-Line Onboarding.
    • The first iteration of your straight-line onboarding should be those steps you marked as essential.
    • Share and communicate the list of steps widely inside your company.
    • Does everyone agree? Would they add or remove anything?
  • Segment your users and your onboarding
    • Segmentation is conversion steroids for user onboarding
    • If you cater to different Jobs To Be Done or user needs, then your onboarding shouldn’t be one-size-fits-all
    • Tailor the onboarding experience to each Customer Job.
    • Have a number of onboarding flows aimed at each job. Use different bumpers to help users accomplish the job they hired your product to do.
    • Segmentation can make it easier for a user to get to value if you highlight the right features at the right time. Giving the users only the tools they need to execute on the the specific job they care about.
    • Segmentation allows you to tailor your positioning and messaging to target their needs and help motivate them toward their goal.

Chapter 8: Keep New Users Engaged

  • Once you’ve created your Straight-Line Onboarding, add bumpers so users remain engaged and eventually adopt the product into their life or workflow.
  • The EUREKA Framework emphasises the three elements from the BJ Fogg Behaviour Model that must converge simultaneously for a behavioural switch to occur:
    • Motivation (M): The desire or willingness to perform the new behaviour.
    • Ability (A): The ease of performing the new behaviour.
    • Prompt (P): The cue or trigger to perform the new behaviour.
Behavior=MotivationAbilityPromptBehavior= Motivation *Ability * Prompt
  • You’re not onboarding people to a product → You're onboarding them to a new way of accomplishing something, a new way of life. It’s a behavioural switch for users.
  • The BJ Fogg Behaviour Model prompts us to answer:
    • Is the new behaviour as easy to do?
    • Are users motivated to perform the behaviour?
    • Are there prompts inside and outside the product to help users perform the desired behaviour to complete the user onboarding?
  • Make It Easy. Make the behaviour as easy as possible to do.
    • Consider measuring the ease of user onboarding using cognitive load.
    • Onboarding is often overwhelming, leading to cognitive overload and potential abandonment.
    • Implement a straight-line onboarding approach to avoid overloading users.Remove or delay unnecessary steps that don't contribute to the first strike.
    • Organise the onboarding steps from easiest to hardest.
    • Simplify the onboarding process by showing fewer options and breaking down complex steps into smaller ones.
    • Steps to a great first experience:
    • 1.    Provide visual cues to guide them to the next onboarding step
      • Insert small cues to encourage users to make a certain decisions.
      • Product tours, tooltips and hotspots can all help nudge the user in the right direction.
      • Checklists, progress indicators, and welcome messages are also effective.
      • Product tours > unending blast of tooltips.
      • Don’t use Product Bumpers as a band-aid for bad user experience.
      • Explain why features are important to helping users achieve their desired outcome.
      2.   Show a helpful empty states
      • First time users experience empty products (without any activity, history, or data)
      • It can be disheartening to see a bunch of zeros and placeholder images on the main page.
      • Empty states are often overlooked as a helpful way to guide users to achieving their First Strike.
      • Use empty states to emphasise the value of taking action and direct them toward action.
      • Avoid using dummy data.
      3.    Provide templates, cheat sheets, and other resources
      • Content like templates, cheat sheets, and education articles can help speed up the onboarding process.
      • Provide them with templates to copy and paste easily.
      • Craft content around user skill gaps to place in the empty state.
  • Increase Motivation:
    • Speak to your users’ desires by showing them how the product can improve their lives. Use content to amplify the solution to their current pain points, calm their anxieties, and remind them they can overcome their existing habits.
    • Show the progress. Use progress indicators to inform users of their status of completion.
      • Zeigarnik Effect: when people feel the need to finish incomplete tasks.
    • Welcome new users. Create a common bond, build a connection, and relate to a shared mission. We like people who are similar to us, people who pay us compliments, and people who cooperate with us to attain mutual goals.
    • Celebrate users’ wins and achievements keeps them interested and creates a correlation between their success and your own. When users achieve a meaningful milestone, congratulate them with an in-app message or email.
    • Use social proof. Users look to the behaviour of others to determine their own.
      • Add social proof to onboarding emails. Case studies, reviews, endorsements, or testimonials from happy customers.
      • Social proof builds trust and motivates.
        • Use social proof near your ‘Call to Action’.
        • Use social proof to address objections.
        • Humanise marketing with social proof.
  • Create Behaviour-Based Prompts
  • Prompts (or triggers) are one of the most powerful forces that shape our lives. Most habits start with a Prompt
  • Prompts are critical during two moments:
    • To help users achieve their desired outcome and experience the value of a product soon after signing up.
    • To help users continue to use a product until they adopt it into their life and workflow.
  • During user onboarding, prompts can occur inside or outside the app.
    • Important for creating an engaging environment and evaluating product fit.
    • Prompts used as an afterthought can hide poor UX design.
  • Prompts are effective when users are motivated and capable.
  • Successful onboarding prompts have three qualities:
    1. Prompts should be omnichannel and consider the user's onboarding journey, including email.
    2. Prompts should be personalized and timely, based on user actions.
    3. Prompts should reinforce the product's value, tailored to user behaviors.
  • Added on as an afterthought, prompts become a crutch to mask poor UX design.
  • The Three Step Prompt Process:
  • Step 1: Identify key milestones in your Onboarding process:
    • Sign-up: Welcome users after they sign up.
    • Critical onboarding steps: Ensure users complete necessary steps to experience the product's value.
    • First Strike achievement: Recognise when users achieve their first success.
    • Free trial period: Provide guidance before, during, and after the trial ends.
    Step 2: Add behaviour-based prompts:
    • Include prompts based on user actions.
    • Send relevant emails with content tailored to their needs.
    • Share specific information at the right time to avoid repeating details.
    • Segment emails based on product and user data.
    • Determine the information or content needed for each step.
    • Motivate users with content that amplifies their pain.
    • Provide resources and support for users who lack ability.
    • Use value-based emails to communicate the benefits of the product.
    • Offer usage tips to guide users towards success.
    • Share case studies to inspire users and address objections.
    • Send trial expiration warnings and extension offers.
    • Utilize sales touches to reach out to users.
    Step 3: Fill in the details (conversational prompts)
    • Set a primary call-to-action (CTA) for each onboarding email.
    • Personalise the content.
    • Keep the emails simple and easy to digest.
    • Optimise emails for mobile viewing.
    • Segment emails based on user journeys.

Chapter 9: Apply the Changes and Repeat

Iterative Process > Big Launches

  • Multiple Iterations Usually Beat a Commitment to the First Idea and Making it Work
    • Learn by doing
    • Analyse results, reiterate and implement changes quickly
  • The Growth Process
    • Companies that learn the quickest have a competitive advantage
    • Triple A sprint: Analyse, Ask, Act
  • Prioritising Onboarding Improvements
    • Use the Action Priority Matrix:
      • High-impact, low-effort (low-hanging fruits and quick wins)
      • High-impact, high-effort (big swings and transformational)
      • Low-impact, low-effort (momentum builders)
      • Low-impact, high-effort (avoid)
  • Split Testing Growth Ideas
    • Split test any onboarding changes
    • Compare retention rates between different onboarding processes
  • Share Wins and Learnings
    • Share learnings from growth experiments across the organization
    • Create teamw-ide empathy and excitement
    • Share successes and impact of onboarding
    • Methods: "Onboarding Wins" email, ongoing lunch-and-learn program
  • Beyond The Initial Onboarding
    • Onboarding is an ongoing process
    • Apply EUREKA process to different steps in the user journey
    • Consider different entry points, customer jobs, and UI/product changes
    • Onboard users to go deeper or wider with the product
      • Going Deeper: Educate about advanced configurations and features
      • Going Wider: Introduce solutions to different problems
    • Revenue expansion depends on onboarding to additional capabilities and use cases of the product

Part III: The Next Steps

Chapter 10: Sales-Assisted User Onboarding

  • Salespeople can enhance the buying process and increase conversion rates by 3.5x compared to a low-touch, product-led approach. This applies to all deal sizes for free trial B2B products.
  • Most product-led companies eventually hire a sales team. Slack is product-led BUT also has a sales team. In 2019, 40% of Slack's revenue came from their sales team closing deals with larger organisations.
  • Sales-assisted or hybrid onboarding: using.a combination of product-led and sales-led strategies for onboarding new users
  • Christoph Janz explains in ‘5 ways to Build a $100 Million Business’ you need to decide what you’re doing to hunt for…
    • 1,000 “elephants,” or enterprise customers who can each pay $100,000 or more per year.
    • 10,000 “deers,” or medium-sized companies that each pay $10k or more per year.
    • 100,000 “rabbits,” or small businesses that each pay $1k or more per year.
    • 1,000,000 “mice,” or consumers who each pay $100 or more per year.
    • 10,000,000 “flies,” or active users that you can monetise $10 or more per year each.
  • What you’re hunting for and how complex your buying process should help determine your approach.
    • If annual value is high, and the buying process is complex use high-touch sales (e.g. Cisco).
    • If annual value is low, and the buying process is easy use self-checkout, and onboard new users with a low-touch, product-led process. (e.g. Netflix)
    • If annual value $2,000 is $100,000 then consider a mix (e.g. Slack)
    • Avoid low annual contract values with a complex buying process!
  • Onboarding is a continuum, from low-touch, product-led user onboarding to high-touch, sales-led onboarding. The best place for you depends on your product, pricing, market, and buyer preferences.
  • Sales can complement Self-Serve Onboarding:
    1. They can direct users to experience the value of your product.
    2. They can facilitate product penetration or expansion. E.g. account managers help get other teams within that organisation to use Slack.
    3. They can guide users in the buying process if it isn’t straightforward (e.g. security audits, procurement sign-offs, requests for customised Service Level Agreements)
  • How sales differs in a PLG organisation:
    1. Needs-based (conservative) selling is complementary to a PLG approach.
      • Put the needs of users front and centre throughout the customer journey
      • Maintain a clear focus on helping users achieve their desired outcome
      • Make the customer feel heard (not sold to).
    2. Sales shift from chasing leads to coaching users.
    3. Sales need to frame the product in different ways to different audiences.
    4. Sales leverage product engagement data in the sales process.
  • Sales should start using a Product Qualified Lead (PQL) instead of Marketing Qualified Lead (MQL)
    • A PQL is a measure of new user engagement, a combination of:
      • Activation: completing straight-line onboarding
      • Engagement: How often are they using the product, especially the core features?
        • Define your own criteria and rank users by engagement
          • Example criteria: Product visions, features tested, feature adoption speed
    • Focus sales-assisted onboarding energy on PQLs who fit your ideal customer profile.
  • Sales outreach generally fits into two buckets: hand-raisers and proactive campaigns.
    • Hand-raisers are those who ask for help. Sales reps should act more like a customer success team in these instances.
    • Proactive campaigns are manual or automated outreach to current users, generating demand for paid or higher-tier plans.
    • Focus on high-value accounts that fit the ideal customer profile
    • Find ideal moments in the user onboarding journey for sales outreach:
      • After signing up: help users set up their accounts correctly and use the product to its full extent
      • Celebrate wins: congratulate users when they achieve meaningful milestones and offer additional support
      • Going top-down: initiate outreach once enough users sign up from one company, tailor the pitch to the executive pain point and provide personalised insights based on existing user behaviour