Successful customer onboarding is the foundation of a lasting customer relationship. And yet, it’s an often-overlooked aspect of the customer experience. When done right, customer onboarding can be an opportunity for competitive differentiation, greater efficiency, and revenue growth.
We’ll answer these questions and much more. Here’s everything you need to know about customer onboarding metrics to put your business on the right path.
Recommended read: 7 Customer onboarding trends to build better product experiences
Customer onboarding is the process of welcoming and educating new users as they move along the customer journey, with the ultimate goal of creating an engaging experience and setting the groundwork for a strong customer relationship.
Having a well-thought-out customer onboarding is crucial for SaaS and subscription-based businesses. As a matter of fact, bad onboarding is the third most important cause of customer churn.
The adoption of a new tool or platform requires a certain learning curve. That’s why companies include step-by-step tutorials, helpful guidance, and support throughout the onboarding to address customers’ questions.
But here’s the thing: Customer onboarding is not a one-and-done process. The only way to improve the experience is to constantly track customer onboarding metrics.
Measuring the effectiveness of the customer onboarding process should be a top priority for every company.
Different companies can have various metrics that mainly depend upon the goals, and the industry companies are in. Your job is to decide on the most relevant for your business.
Setting up a customer onboarding process is just the first step. You must keep a pulse on ever-changing customer behaviors to provide an engaging experience and take customers to the next level. And this is especially critical during the onboarding period.
However, deciding what customer onboarding metrics to track can be tricky. To help you define the onboarding success metrics for your business, we’ve created a list of 13 essential metrics to track in 2023 and beyond. Let’s dive in.
The customer onboarding journey is a very delicate process. To deal with all the intricacies, companies need a customer onboarding journey map — a visual representation of the customer experience during (and after) the onboarding period.
Customer journey mapping can help companies visualize the path to purchase and understand their buyer’s processes, needs, and perceptions. User testing and behavior analysis are just some techniques companies use to compare a customer journey map to a user’s real experience.
Start by identifying the basic elements of a customer journey map, such as essential milestones (aha moment, activation, feature adoption) and interaction points (opt-ins, welcome emails, platform walkthroughs, and customer support).
The next step is segmenting customers into buyer personas and creating a fitting onboarding journey map for the most relevant personas. Collect data from different touchpoints and analyze data to draw conclusions about your customer onboarding journey. We recommend reading our complete guide to B2B customer journey mapping.
The main purpose of a customer onboarding journey is to empower customers to understand and use a tool or a platform on their own. The sooner customers go through the onboarding, the faster they can move from a free trial to the paid version or adopt more features.
Time to onboard shows the number of days it takes for users to start using your product independently. The time needed for onboarding can indicate how complex the tool is. That’s why companies are trying to simplify the process and reduce the time to onboard.
Companies should pay attention to the number of days customers need to go through the onboarding from start to finish. This is how you measure and then optimize the time to onboard.
Time to onboard = Number of days to start using the product/service
Time to first value (TTFV) is the time it takes for users to get from the start of onboarding to getting value from your product — also called the ‘aha’ moment.
Why is it important to measure time to first-time value? The ‘aha’ moment is the sudden realization of a product or platform’s full potential. Reducing the time to first value significantly decreases the potential for customer churn. It’s important to pinpoint customers’ needs to help them reach the ‘aha’ moment faster.
The time to first value is the amount of time between the close of the sale and when the customer is onboarded.
TTFV= The amount of time it takes users to reach the ‘aha’ moment
Getting customers to sign up for a free trial is a small win. The real excitement is getting more paid users after the trial period. That’s why a trial-to-paid activation rate is one of the essential customer onboarding metrics to track.
The trial-to-paid activation rate represents the percentage of users that convert to a paid account from a trial period.
To measure the trial-to-paid activation rate, divide the number of free trials converted to paid users by the total number of free trials and multiply the result by 100 to get a percentage.
Trial-to-paid activation rate = (Free trials converted to paid users / All free trials) x 100
While customer education is one of the primary goals of customer onboarding, one of the essential SaaS onboarding metrics to track is the revenue the customer onboarding journey brings to the business.
Onboarding revenue is the revenue you generate through the onboarding process. This metric shows whether your conversations lead to upsells and revenue growth.
The onboarding revenue can be measured using Net Revenue Retention (NRR), which is the percentage of recurring revenue retained from existing customers over a given period. To get the NRR, you should sum the monthly recurring revenue (MRR) at the beginning of the period and the business expansion revenue and then subtract canceled MRR and downgraded MRR. Divide the result by the MRR at the beginning of the period and multiply by 100.
NRR = (MRR at the beginning of the period + Business expansion revenue) – (Canceled MRR – Downgraded MRR) / MRR at the beginning of the period)) x 100
If the NRR is high, your business is generating revenue due to retaining customers. On the contrary, if the number is low, it indicates that the revenue is affected by customer churn.
Customer information is a black box. You will be blindsided if you don’t conduct regular surveys to gather feedback. Collecting feedback is the only way to spot common pain points and optimize the customer onboarding process.
The number of answers you receive should be on the list of customer onboarding success metrics you track. Measuring customer response rates can help you determine the effectiveness of your customer onboarding process and point to any red flags you must address.
To measure the customer response rate, divide the number of people who completed your survey by the total number of survey participants and multiply the result by 100.
Customer response rate = (Number of people who complete your survey / Total number of people who received your survey) x 100
Understanding how customers use your tool more granularly is a prerequisite for a more effective future product development roadmap. What features are most adopted, the roadblocks to adopting specific features, and what features you should prioritize next are just some questions you have to answer.
The feature adoption rate measures the percentage of total users using a feature regularly. The more features a user adopts, the more they depend on the tool. That’s why tracking the adoption rate for all your features is crucial.
To calculate the feature adoption rate, you should divide the number of new users of a specific feature by the total number of product users and multiply the result by 100. Let’s say that 50 customers have adopted one of your features, and you have 200 total product users. The feature adoption rate would be 25%.
Feature adoption rate (%) = (Number of new users of a specific feature / Total number of product users) x 100
The number of logins to your tool is a tell-tale sign of the success of your customer onboarding. The more users log into your tool, the more they engage and adopt your product into their workflow.
While this seems simple to track, most businesses overlook its importance and forget to list it among their SaaS onboarding metrics.
To measure the logins to your tool, you need to count the number of logins during the customer onboarding process.
Logins to your tool = Number of logins during the onboarding period
Setting an onboarding program is just part of the process. To get results, customers need to get to the finish line. That’s why tracking the onboarding completion rate is crucial as one of the onboarding success metrics.
The completion rate is the percentage of users who finish the onboarding. The onboarding completion rate has a different meaning for different businesses.
To have a clear picture of what you are tracking, consider marking onboarding completion through a custom event or action relevant to you (e.g., switching to a yearly plan, going through the onboarding checklist, inviting more team members, etc.)
To calculate the onboarding completion rate, divide the number of users who finished onboarding by the total number of users in the onboarding cohort and multiply the result by 100. For example, if you onboarded 20 customers this month and only 12 of them finished the whole onboarding process, your completion rate for that cohort is 60%.
Onboarding completion rate = (Users who finished onboarding / Total number of users in the onboarding cohort) x 100
Getting a lot of support request tickets during the onboarding can be the canary in the coal mine. Think about it this way: the number of user support tickets indicates how many users are struggling with your onboarding process and asking for assistance.
You should take these signs as early indicators of a potential failure and figure out a solution for the most frequent roadblocks.
To calculate the user support request rate, divide the number of users that sent support requests during the onboarding period by the total number of users onboarding and multiply the result by 100. The higher percentage value strongly indicates that users need support during the onboarding.
User support request rate = (Number of users that send support requests / Total number of users onboarding) x 100
The success of your onboarding (and your business, in general) depends on customer satisfaction. To track this, you need to determine your customer satisfaction (CSAT) score. The customer satisfaction score measures customers’ satisfaction with your product and brand. CSAT indicates your company’s performance that can be used to measure specific interactions.
To measure the customer satisfaction score, divide the number of satisfied customers by the total number of responses and multiply the number by 100. So, for example, if you have 75 satisfied customers out of the total 150 surveyed, your customer satisfaction score is 50%.
CSAT = (Total number of satisfied customers / total number of responses) x 100
We can’t discuss customer onboarding analytics without mentioning the number of active users. Active user count measures how many customers log in and use your tool in a given period, typically monthly or daily.
The main challenge is figuring out how you define an active user. Businesses can simplify the definition of “active user” as a customer logging in to your platform. But then again, does that represent a person actively using your product? So while defining an “active” user is up to you, you should consider completing a specific activity as a benchmark.
Businesses can measure customer engagement rates on a daily or monthly basis to get an overview of the number of active users. This metric is usually tracked as the total number of people actively using a product in a given period.
However, the metric can also be denoted as a percentage to help businesses understand how many users in a cohort remain active over time.
Customer engagement rate = (Active users in a cohort / Total users in a cohort) x 100
The time spent using your tool is a crucial SaaS onboarding metric. The average session duration looks at how long a customer uses a tool. A higher average session duration indicates that people are engaged with your tool.
However, you should always combine multiple customer onboarding metrics to make sure you understand your customers’ journey. In rare cases having a high average session duration can also mean that customers have difficulty navigating your tool. That’s why you must check in with customers through regular surveys or analyze customer support requests.
To calculate the average session duration, divide the total time spent across sessions by the total number of users.
Average session duration = Total time spent across sessions / Total number of sessions
An effective customer onboarding experience can give your SaaS business an edge over your competitors and increase customer lifetime value. The customer onboarding period is the time of building trust.
Customers expect you to be there for them wherever they are and show them value that reaffirms their decision to work with you. Touchpoint’s Serve module helps you engage customers across channels and improve customer onboarding metrics.
Kaleigh Moore is a contributor for Forbes covering retail, e-commerce and direct-to-consumer business with a focus on the fashion, beauty and luxury verticals. A full-time freelance writer and consultant, Kaleigh’s work has appeared in Vogue Business, Fast Company, Inc., Entrepreneur, and others.
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