SaaS Onboarding: Training, Engagement, and Customer Retention

As a product owner, you may know your SaaS value proposition inside out. But there's no point in advanced functionality and a tailored user interface if your clients struggle to understand the benefits they can get from using your product. That's where SaaS onboarding comes in. 

So, what is client onboarding? Why does your SaaS need it? What types of onboarding are best for your cloud service? Let's figure this out together!

Benefits of Onboarding for Your SaaS

User onboarding is the process of helping clients get familiar with the product's features and key benefits, leading them to their first success with your application.

According to Sixteen Ventures research, a client who does not perceive the value of your service during the first interaction will stop using it within 30-90 days. Since most SaaS companies operate on a subscription-based pricing model, user retention is critical to their success and prosperity.

The first experience determines whether a client will continue using the product. A thoughtful onboarding process that shows the client you care about their success will help you turn casual users into loyal customers, and loyal customers into brand advocates. 

Look at what other positive results you can achieve by optimizing the first interaction experience with your application:

• Eliminating decision-making hesitation. SaaS products are typically complex, and when a client first opens the app, they feel like they are in an airplane cockpit with dozens of buttons and triggers, not knowing where to start. The main task here is to eliminate the difficulty of choice and help users take the first step. 
• User education and engagement. According to Pareto analysis, about twenty percent of your audience comes to your SaaS with experience using a similar service, so they will easily understand how to use yours. The remaining 80% are usually unprepared audiences who need to be educated and shown what benefits they will get from using your product. 
• Retention. A user who has learned to use the product and derive value from it is likely to continue using it.
• Increasing new customers. The clearer and more effective your service is, the more likely customers are to recommend it to others (more customers - higher profits). According to the Edelman Trust Barometer, 84% of B2B decision-makers start the purchase process with recommendations — that's a strong argument for working on onboarding.

Where to Start

Clients come to your SaaS with a specific problem, and your task is to quickly show them how your service will solve it. The thing is, users find it very difficult to see results during the trial period, so the task of onboarding is to guide the client to the "aha" moment — the moment when they suddenly realize the value of your product and why they need it.

Next, we will briefly discuss what preparatory steps you need to take for creating an effective onboarding process that will lead the client to product value awareness. 

• Conduct user research to understand who your clients are and what their needs are. Based on this information, define buyer personas.
• Determine what problem the user wants to solve with your product. Your product may meet the needs of specific buyer personas in different ways. Onboarding must address each one.
• Identify the features of your SaaS that will solve user problems. The client should try these features first, rather than learning everything about the entire product at once. 
• Eliminate unnecessary steps and shorten the path to value. Once you've identified which features bring value to the client, try to find the shortest path to that value. The onboarding process may differ

After you have done all the preparatory work, it's time to start the process itself.

7 Types of User Onboarding

Onboarding is a process that requires constant testing and improvement, so there are many methods to implement it. Over time, SaaS companies may change and combine different ways of introducing users to the application, choosing the most effective options for them.

Note! Regardless of which method you choose, you must provide users with the ability to close or skip the training and continue working with the product itself. Otherwise, onboarding can cause irritation and rejection.

Here are a few of the most common types:

Product Tour

This type of onboarding is typical for many SaaS companies. Its main goal is to introduce the user to the new product and give them a clear idea of how to start interacting with the software.

After registration, the customer views brief instructions on using various application features.

Advantages:

• You can quickly convey all important information to the user.
• It is a simple and understandable method
• Does not require large development costs

Disadvantages:

• Provides too much information at once, so there is a high chance the user will quickly forget a significant part of this training
• Sometimes it may provide the user with obvious information

Proper use of white space plus short and clear copy encourages users to take the first action (adding a new customer, importing customer data, etc.).

Segmented Onboarding

This method allows you to create not a one-size-fits-all onboarding screen, but a personalized experience for different types of customers depending on their needs and goals. The segmented type asks the user to choose their goal/preferences, and based on that choice, the application shows further instructions. 

Segmentation is a great choice for SaaS products that have a wide range of features and work with various use cases. 

Advantages:

• Allows you to make the interface truly user-friendly for each buyer persona

Disadvantages:

• Requires thorough customer research
• Requires more time and effort to implement

Welcome Emails

Sending a welcome email is a traditional way to introduce customers to the product and tell them about the benefits they will get from your SaaS. This type of onboarding can educate the user, motivate them, and help them dive deeper into how to properly start using your application. 

Overall, email marketing is one of the effective ways to guide a customer along the SaaS user journey. 

Advantages:

• Users check their inbox more often than the service they just signed up for;
• No need to overload the product interface with pop-ups.

Disadvantages:

• It is harder for the user to apply the knowledge in practice if they see it in an email rather than on the website screen;
• There is a risk that the email will get lost in the numerous spam and the customer won't notice it 

Video Tutorials

This type of onboarding replaces traditional screens or tooltips. The user who has completed registration

Advantages:

• More engaging than traditional text formats
• Explains everything faster and more accessibly
• The video can easily be made memorable

Disadvantages:

• Requires serious preparation
• With poor internet connection, the impression may be blurred

Tooltips

The goal of onboarding is to tell the user what to do in the application to get a certain result. Pop-up tooltips handle this task perfectly.

You draw the client's attention to certain buttons/icons, and the visitor sees pop-up windows with a brief description of their functionality. The visitor gets a hint exactly when they need it.

Advantages:

• Users like pop-up tooltips because they appear at the right moment
• Easy to integrate into the interface

Disadvantages:

• If they provide obvious information, they can be annoying

Demos

A demo version of the product introduces new users to the program interface and shows the visitor an example of using the application. Such onboarding is effective because it allows you to quickly demonstrate all the advantages of your SaaS in one place.

Advantages:

• Fits perfectly into the interface because it consists of the same elements
• Quickly demonstrates the result of using your application
• Suitable for those who prefer visual learning

Disadvantages:

• For complex products, it's impossible to show everything in one demo, so you must prioritize and highlight only the main features

Gamification

Users love games. So why not use the addictive mechanics of games in onboarding? The idea is this: for completing certain actions, the visitor receives a reward—bonuses, a certain status, or other virtual benefits. While earning rewards, users learn to get value from your product.

Advantages:

• High level of user motivation and engagement
• Encourages the user to return and stay

Disadvantages:

• Requires very careful preparation
• Requires a solid budget to implement

Metrics

After you've done all the necessary preparatory work and implemented onboarding in SaaS, it's time to evaluate it. It is important to constantly monitor how the audience interacts with onboarding and improve the process as needed.

You can use the following metrics:

• User engagement metrics. Finding out how often people use your product, how much time they spend per session, which features they use most often, and other engagement metrics will help you optimize the onboarding process.
• Churn rate. Churn rate is the number of customers who stopped using the SaaS for any reason. Track how churn rate changes with any product or onboarding changes. Onboarding may help reduce churn among customers who didn't understand how to use the SaaS.
• Lifetime Value (LTV). This metric calculates the profit you earn over the entire relationship with a client. Quality onboarding extends the time a client works with your service and positively influences LTV.
• Retention. This metric helps you determine why customers leave. For example, if you lose most users within the first few days after registration, you can improve your welcome messages to motivate them to start using the service.

It is important to remember that all these indicators,

Summary 

Ideal onboarding is invisible to the user. It seamlessly complements the page, helping to overcome bottlenecks and appearing exactly where the user needs it. We hope that by now you have an idea of how to organize onboarding to help engage and retain customers.

And finally, remember that the better and higher quality the onboarding process, the happier your customer. And a happy customer in the SaaS industry, in turn, means a higher lifetime value, and therefore higher revenue.