Subscribe
Home
arrow left svg
Blog
arrow left svg
PLG Resources
arrow left svg
The Importance of Product-Led Onboarding

The Importance of Product-Led Onboarding

Onboarding can be a make-or-break interaction where the user decides if they will become a loyal customer. This article will cover product-led onboarding and how to create a great onboarding experience for users.

calendar icon svg
October 27, 2022
clock icon svg
5
Min Read time
The Importance of Product-Led Onboarding
The Importance of Product-Led Onboarding

The Importance of Product-Led Onboarding

Onboarding can be a make-or-break interaction where the user decides if they will become a loyal customer. This article will cover product-led onboarding and how to create a great onboarding experience for users.

calendar icon svg
October 27, 2022
clock icon svg
5
Min Read time

Table of contents

Onboarding can be a make-or-break interaction where the user decides if they will become a loyal customer or find a different solution to their problem.

Users signing up and not sticking around is a real problem for most SaaS companies.

This problem usually happens not because you don't have a great product but because you need effective product-led onboarding.
Before your product can solve a user's problem and make it easier, you must ensure they start using it correctly.

To ensure your business makes a great first impression on the users, you must create a thorough product-led onboarding process.
This article will cover product-led onboarding and how to create a great onboarding experience for users.

What is Product-Led Onboarding?

Product-led onboarding introduces the users to the product's features, benefits, and functionality based on their needs and position in the customer journey.

To create a great onboarding experience, you need to understand what you are trying to achieve and how you will do it.

An effective onboarding process welcomes users through the features that are best suited to them based on data about their behavior, purchases, demographics, and other details. You can consider it your pursuit of the customer.

Product-led onboarding can multiply revenue, creating an excellent experience for the most critical leads that can generate 80% of your income.
It attracts more customers by giving them a way to understand your offerings and a great, personalized first experience with your business.
Some of the ways to create a great onboarding process include:

  • Simple signup pages
  • Minimal data extraction early on in the onboarding phase
  • A learn-by-doing approach 
  • Addressing user issues

This approach to onboarding stems from product-led growth (PLG). PLG focuses on a "try before you buy" strategy.
They allow users to understand the product before fully committing to becoming a customer. This way, you can increase revenue and convert more customers.

Product-Led Onboarding vs. Product-Led Growth

Product-led growth is an approach that emphasizes using the product itself to drive expansion rather than using conventional sales and marketing strategies.

You can utilize a specific plan, such as product-led onboarding, to increase engagement and enhance client retention across the customer experience.

Then how do the two ideas relate to one another? To find that, we must distinguish between strategy (what are we aiming to do?) and tactics (how do we accomplish it?).

More and more companies today employ a PLG strategy to improve user experiences, customer acquisition, product usage, and retention rates. For PLG companies, onboarding:

  • Can be a retention tool: To ensure customers continue to use your product, you need to make an excellent first impression with the onboarding process.
  • Is a revenue multiplier: Customers that have a great experience are more likely to refer more users. This immediately becomes a way to boost revenue. 
  • Creates lowers acquisition costs: The product-led onboarding means there is little interaction with sales or support. This can decrease your acquisition cost because you can save time creating new customers.

Why is Product-Led Onboarding Important?

Your perception of everything is greatly influenced by the initial few seconds you spend with it. It's challenging to change the first impression after it's been established.

Everything incorporates this idea, even product experiences.

A person will likely throw away a product within minutes if they have an initial negative impression of it.
Even worse, they can start speaking out against your business, hurting your reputation.
In short, the success of your product hinges on how your users perceive it from the moment they sign up.
The following three factors, which are supported by statistics, explain why user onboarding is essential for product-led growth:

  • Product-led onboarding is a retention driver. Retention plays a big part in increasing revenue, even though it's a measure that's sometimes disregarded. That's because it raises the lifetime worth of the consumer (CLV).

    When someone first subscribes to a product, they either adore it or stop using it. Successful onboarding increases the likelihood of individuals staying around and becoming loyal customers. The evidence proves that user onboarding is the first step toward user retention.

  • Product-led onboarding increases sales. A genuinely unique onboarding process multiplies income. This is a clear benefit of increasing retention. It significantly impacts company revenue growth and lays the foundation for future success. It should therefore come as no surprise that the first impression causes the most significant deficit in development.

  • A good product-led onboarding process lowers the cost of customer acquisition. Poor onboarding can result in increased customer acquisition costs, or CAC, as it is a retention driver and revenue multiplier. Excellent onboarding offers many benefits, including increased engagement rates and decreased CAC.

It is crucial to create an excellent user experience throughout the user journey. It can be the best technique to turn a user into a regular customer.
Onboarding driven by the product is the first stage of this journey to success.

How to Create a Product-Led Onboarding Strategy

Product-led onboarding should be a part of your product strategy for customer acquisition and growth. To get started, here is a quick overview of how to create a successful onboarding experience.

Create an Easy Signup Process

You need to create a signup process to be as easy and fluid as possible.
No matter how well you design the onboarding process, if users can't access your application, it's all for nothing.

Simplifying the signup process is the first step to implementing a successful product-led onboarding process.

How can you make sure the signup process is as straightforward as possible?

A general rule of thumb is to make the sing form as short as possible and keep the form to only the necessary fields. You can always ask users to provide additional information later in their journey. It's best to keep the signup process on one screen, but if you need multiple screens, segment them to create a better experience.

It's also a good idea to wait until the user has completed their first session before requesting email confirmation. 

This allows them time to test your software. Additionally, if you can request credit card information only when they decide to make a purchase, they are more likely to continue down the journey.

Understand the User's Problem

Addressing the user's issues is one of the most important things to consider in your onboarding process... It would help if you made an effort to understand what your users want to accomplish. 

The best way to do this is to consider your company's "why," what issue you are solving, and what benefit you offer the user.

What do they believe the user will be able to accomplish? You can personalize their onboarding process if you thoroughly understand their problems. 

A monotonous, multi-purpose onboarding flow restricts delivering value as rapidly as possible.

But what are the best methods for gathering user information from within an app to customize onboarding? There must be a careful balance. 

This is because you want to collect as much information as possible without making the signup process too tedious and time-consuming. 

Keep requesting the information required to create an account from people. Increase the available "surface area" for data collection.

Drive Users to an Activation Point

To this point, you have been guiding users toward becoming a member or completing a purchase.
You have accumulated some significant data; now, you need to assist them in converting by pushing them toward an activation point.

When consumers appropriately interact with the product's essential features, they realize its worth.
You have a slim chance of turning them into paid customers if you're continually pointing them to a call-to-action or activation point on your website, landing page, or app.

What are the best methods for getting people to the activation point?

"Aha moment" is frequently used to describe the activation point.
However, activation takes place when users recognize the value of the product.
The best way to get users to signup, make a purchase, or subscribe is to make that next step as straightforward as possible.
Include clear CTAs in your pages, and explain to the user how they can benefit from your products in as few words as possible.

Using a checklist to direct buyers to interact with your product's major features is a tried-and-true technique to move them closer to that tipping point.
When appropriately used, checklists may be a valuable component of any product-led onboarding process.

Think About the Entire User Journey

Keep in mind that onboarding continues after the activation point. In addition to converting and keeping consumers, you also want to highlight the benefits of your offering and persuade them towards some upgrade.

The remainder of the user journey must be remembered! It would help if you concentrated on providing the essential information at each flow level. This is because that has increased trust and improved the product onboarding process.

Continue to Optimize your Onboarding Strategy

How can you tell whether your strategy works? Said you will know if you collect the data.
Therefore, you should request user feedback frequently to spot friction points and roadblocks.
That will provide you with ways to improve your onboarding process or change elements that need to be fixed.

The technique relies heavily on testing, learning, and iteration. User research testing can be used to discover how various in-app interactions assist users in achieving goals more quickly.

What are the best methods for gathering input and enhancing the user onboarding procedure?

One of the fastest, most cost-effective, and easiest ways to validate or evaluate your onboarding process is to run a user test online.
You will get user feedback from your target audience that helps you continuously optimize the strategy.
But remember that you can only score with a goal; before beginning any testing process, you must always set a goal.

Conclusion

Product-led onboarding is a great strategy to get users to understand the value and benefit of your product or service without talking to sales or getting guidance from your team when you present your users with the most vital information to create an "aha!" moment with your offerings.
It gives them a great user experience. While onboarding, you will ultimately increase your customer base and grow the business.

However, it's important to remember that you need to understand the users' problem, drive to an activation point, optimize the entire journey, and constantly optimize your onboarding process. 

Written by
Tags
Concepts
Guest Post
Recommended reads

Need help redefining your PLG strategy?

  • Former Sequoia VCs
  • VP-sales from $1B+ cos
  • AEs hitting 170%+ quota
  • and more...
Connect async on Slack

Need help redefining your PLG strategy?

  • Former Sequoia VCs
  • VP-sales from $1B+ cos
  • AEs hitting 170%+ quota
  • and more...
Get Started

Join Canva, OpenPhone and BrowserStack

No credit card

Related Articles

Browse All
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Subscribe to Top Of The Lyne