Product Analytics 101: Onboarding Funnels
In this 4-part series, I outline four common metrics or charts I use in my day-to-day work, and how I derive actionable insights from them. I’ll also give you a little peek into the product analytics tech stack I use for B2B startups.
Detailed onboarding funnels (today’s post!)
User or account-level retention
Feature adoption and retention
The difficulty with onboarding
Most SaaS companies I work with try to make Product Led Growth (PLG) work for them. The goal is that new users can figure out the value of the product without any assistance, within a reasonable timeframe (Time To Value).
As Product or Growth people, we spend a lot of time thinking about the different user personas that enter our onboarding flow, so we can help them achieve their primary goals as smoothly as possible, after which we slowly let the magic of our product unfold in a continuous onboarding flow.
In B2B SaaS things get tricky because:
Our product might have a lot of interesting features, and we’re not sure what our new users might want to see first
We might be trying to target multiple ICPs (ideal customer profiles) with multiple goals or use cases. Long story short: Please stick with 1 ICP if you don’t have product-market fit yet, meaning you can sustainably resell a standardized product to the same ICP.
We need to think about different onboarding flows for different members or roles within a team. The Account Owner will usually have different goals from the admin or a team member.
Some B2B products are inherently difficult to learn and it’s not so easy to break down a complex, usually human-assisted onboarding process into bite-sized product-driven onboarding.
We’re operating in a red ocean and need to identify which ‘right-to-play’ features our users need to see to even consider us, but also guide them to our special sauce quickly enough (do we even know what our special sauce is?)
We need to handle both new user onboarding and continued onboarding. After making new users initially comfortable with our product (new user onboarding), we need to show them the expansive value of our product over time, at a learning pace that’s not too fast and not too slow.
Removing complexity
It’s important to understand these layers of complexity so we can consciously remove them. We can go from a highly complex onboarding flow to something that looks a lot more linear.
It bears repeating: We can identify a number 1 ICP to focus on if we don’t have PMF.
We can focus on one specific role first. For example, if your product is built for SME’s, the account owner ‘hat’ might be worn by the person experiencing the most pain, who is also the champion - the person committed to bringing the product into their company.
It might make sense to start with a singular focus on improving the onboarding flow for that account owner.
But don’t forget to tackle the onboarding journeys for other team members later!
Different onboarding paths for different roles & primary goals. Are you crying yet?
By focusing on one ICP and persona at a time, we can build a deeper understanding of their primary goals - what’s the first thing they want to achieve in your product - so that we can guide them there in a straight line.
We can also learn about the alternatives they're using so we can strive to become 10x better, giving them a reason to stick with us. ‘Customer value’ is one of the vaguest and most meaningless terms in product management. By understanding who we are serving, we can turn it into something concrete.
Now that we know which onboarding journey we are focusing on first, we can build a detailed onboarding funnel report to show step-by-step where our new users are dropping off.
Funnel or path?
A funnel report shows how users move through the various stages or steps in your journey, indicating a linear flow. The users who dropped off between steps 1 and 2, will no longer be considered between steps 2 or 3.
A user path is more flexible. It refers to the sequence of steps or interactions a user takes to complete a specific goal. Paths can vary widely between users, depending on how they navigate through a website or application.
In June you can build flexible onboarding funnels where a step in the funnel can be triggered by a variety of events (you can choose between AND or OR statements).
Getting actionable insights: Example onboarding funnel
You’re a Product Manager at the fictional B2B SaaS company Wednesday.com, building an all-in-one project management tool. Your tool allows users to create internal project budgets, build client proposals, and track actual time worked on projects.
Your user onboarding flow starts with a short onboarding survey/wizard to help new users get set up, which asks them what they want to do first so you can send them to the right section of the product and walkthrough:
By triggering events for the primary CTAs on each step (‘sign up’; ‘continue’; selecting either ‘internal’ or ‘external’; etc.) we create the foundation for a detailed onboarding funnel, which could look like this:
The dramatic drop-off between steps 2 and 3 is instantly noticeable. It appears that users are overwhelmed by the question ‘What do you want to do first?’. We have a few options:
Remove the step. This seems like a simple fix, but it’s not the best option in our case. There’s such a thing as positive friction! Since we’re building a multi-use-case product (creating budgets, proposals, and tracking time), we need to somehow figure out what our new users might want to do first, so we can send them to the right feature.
Make the step skippable, or allow users to select “I just want to check out the product”.
Improve the step. Perhaps users can’t grasp what the options mean. Perhaps we should explain them better with text, moving images, or product videos.
Before we can select the right option, we need to understand why users are dropping off here. Qualitative data can help us uncover that ‘why’. I rely heavily on shadowing sessions, where I invite new users, or non-users who fit my ICP to 30-minute moderated or unmoderated shadowing sessions, where I ask them to read through our website and try our product for the first time whilst narrating their thoughts.
We also notice a drop-off between steps 3 and 4. Perhaps asking users to invite their team members before they’ve been able to explore the product is a turn-off. We can find out by supplementing with qualitative data and experimentation.
Don’t get bogged down just tweaking the funnel. Zoom out!
Although it might be tempting to bury yourself in the onboarding funnel, don’t forget to zoom out and look at the more overarching reasons why users might not make it through your onboarding flow.
Your messaging/landing page is drawing in the wrong type of users, or making false promises
Your product isn’t compelling or differentiated enough. Especially as a new player, you need to be significantly better or cheaper than the market leader to convince users to switch to you.
You can optimize your funnel until the cows come home, but if your product isn’t anything special to begin with, you won’t get far.