How this simple 5-step process can 5x your conversions

Table of contents

• What is customer onboarding?

• Customer onboarding methodology

• The 5-step customer onboarding process used by Ausmed to 5x conversions

• Your customer onboarding checklist to achieve similar results

What is customer onboarding?

Customer onboarding is the combined set of experiences, communications, and outcomes your new customers have the first time they use your product.

Customer onboarding relies heavily on the combined intelligence of the entire organization, from product to marketing, to UX, to engineering, to the sales team, to customer support and customer service, and even finance. Effective customer onboarding is not just the responsibility of the product team: in fact, it’s better to not even consider it a part of the product. Think of it as a standalone web application designed to deliver upon your product experience/brand promise the first time—yes: just that once.

Designing a great customer experience is not about luck or magic. Great customer onboarding is 100% engineered, meaning you can (and should) implement, optimize, and test your way toward the ideal experience for your product and customers.

The importance of successful customer onboarding

Have you ever wondered just how many of your users have actually used your product since signing up, even just once? It turns out that for most products, the answer is: not many.

When customers first sign up to a product, they are filled with a mix of emotions: hope, hesitation, doubt, and of course optimism. They want the product to be the solution they’ve been looking for, but are concerned that it might not be; or worse still, that they might not be able to figure out how it works. This, is a customer success problem. 

From the moment they decide to give the product a go, every touchpoint they make is worth its weight in gold. If they click correctly and are successful, they will gradually feel like they are succeeding and will be more inclined to click again.

If they click incorrectly, however, they will start to feel incompetent, which reduces the chance of them making an additional click. Usually, that’s because of a bad customer onboarding experience. 

For you, as a product owner/marketer, each click represents progress in the onboarding workflow. By thinking about a click as a binary ‘bet’ you’re getting your customers to make, you can start to break down the onboarding flow into measurable interactions.

Being able to microscopically measure each interaction inside the onboarding workflow is the key to helping you methodically design and optimize a great onboarding experience. Creating an effective first impression for those new clients that just started their customer journey with your product/service.

What is activation?

Much like we can measure the weight of an object using a metric like ‘kilograms’, we can measure the performance of our customer onboarding using a metric called ‘activation’.

MEASURING ACTIVATION

Activation refers to the first time a user experiences the core value proposition of your product/service—it’s their ‘aha’ moment. As a metric, activation is typically measured as a rate (percentage) over time.

EXAMPLES OF 'AHA' MOMENTS

How to measure activation (technical)

Warning: this is a highly technical paragraph! I’m adding it for context into how activation is measured through data, but you can skip right to the next section.

You can measure activation using stateful or stateless data:

• Stateful data allow you to create, store, and read a memory of the data generated in the lead up to a stateless change in your database (like a form submission).

• Stateless data holds no memory of the past, and merely contains the most recent version of a record (such as the information submitted by the form).

Your business will already have a stateless record of whether your customers have activated. You will just need to count the number of people who have signed up to your website or service who have also achieved the activation goal, such as ‘uploaded a file’, ‘played a song’ or ‘created a profile’ (whatever it is that you count as activation).

For example, in the case of Dropbox, we would simply need two database tables:

• How many people have signed up to Dropbox

• How many of signed up users have at least one file in their Dropbox

Let’s pretend it’s 2008 again and only 10,000 people have signed up to Dropbox, and of them, only 2,321 have at least one file in their account.

Activation = 2,321/10,000  =  23.21%

Of course, some of these people may have uploaded a file, then deleted it—meaning, they would not be really considered activated. This is where stateful data becomes a far more accurate measure of activation.

Stateful data streaming allows you to fire an ‘event’ each time a behavior you care about occurs within your product. In onboarding, you ultimately need an event that indicates when someone first demonstrates an intention to sign up, such as ‘started sign up’, and a second event that indicates a user has finished the onboarding workflow, such as ‘finished sign up’.

Activation = ‘finished sign up’ / ‘started sign up’

Customer onboarding methodology

Background

Ausmed Education is a SaaS company; we provide software and online learning as well as face-to-face education for health professionals. Think of it this way—about one in five health pros in Australia are our customers.

And a couple of years back, we launched a new online service that looked something like this…

With the first version of our service live, it was time for us to take it on the road and conduct some thorough in-the-field user experience (UX) testing.

We unplugged our laptops, tethered our phones, and walked down to the local hospital precinct near our offices. We chose to hang around in the outdoor cafeterias, looking for potential users (health professionals) who we would coax into testing our software in exchange for us buying them a coffee. Melbourne’s coffee is great, so recruiting testers wasn’t hard at all.

THE SIGN AUSMED USED TO RECRUIT TESTERS IN A COFFEE SHOP

With the Australian sun burning our pale-tech-worker-skin, we watched people sign up to our SaaS service.

Our instructions were clear: “This is a platform that helps you keep records of the education you do. Imagine you have stumbled across this website (handing them the laptop) and have decided to try it out. Can you show me how you would record your first educational activity?”

We would then hand them our laptops and watch.

Things started well…

One by one, they would move through the customer onboarding steps: create an account, add their registration and professional details, and choose a profile avatar. Great! There were very few hiccups, the design was smooth, and everyone seemed to make it through.

We would end the interview. We didn’t ask any questions; we just wanted to watch.

No one, not a single person, actually completed the task. No one recorded their first educational activity. They simply signed up and stopped there.

As we scurried back to our office, making sure to catch the shade of Melbourne’s plain, tree-lined streets as we walked, we asked ourselves, “why didn’t anyone actually document an activity?”

They understood the concept; they liked the concept. But they didn’t actually experience it. They just saw it and acknowledged it.

We learned two things from these user interviews:

• People aren’t really thinking much online, they are just clicking along… skipping along the form, distracted and vaguely trying to complete the tasks at hand. Present them with a distraction and they will happily wander, and

• Even though potential customers understood the concept, no one actually completed the task.

Upon returning to the air-conditioned comfort of our ergonomic chairs and HD monitors, we did what data-driven professionals do: we queried the database.

How many signed up users had at least one activity in their portfolios?, we asked.

ONLY 15% OF SIGNED-UP USERS HAD AT LEAST ONE ACTIVITY IN THEIR PORTFOLIOS

We realized our customer onboarding process was wrong. It was merely an extended sign up process designed around our needs being met—not the customer’s needs being met.

Note: Over the past few years since this revelation I have observed that 15% is quite normal. Most products seem to have a standing activation rate of roughly 20%.

We quickly set about establishing a truly engineered approach to optimizing our customer onboarding process. We introduced daily reporting of our activation rate and made the whole team responsible for it, using the OKR (Objectives and Key Results) model.

Each morning, at our stand-ups, we would report activation for the previous day. Then we would ideate ways we could improve activation and execute them as fast as possible.

This brings me to our first win.

Using the Jobs-to-Be-Done framework to accurately define the ‘aha’ moment

The first thing we needed to do was accurately define what would count as an 'aha' activation moment for our users, and get better at measuring it.

It’s important that I note for readers here today that, from our perspective, activation is often poorly measured by most companies. Standard examples include:

• customers setting up their profile,

• downloading a PDF,

• logging in a certain number of times, or

• returning within a specific period (7 days for example).

None of these traditional approaches really indicate an ‘aha’ moment had been delivered. We chose to align our customer onboarding around the Job-to-Be-Done (JTBD) framework taught by Clayton Christensen instead.

In this framework, a ‘job’ is “the progress a customer is trying to make in a specific context.”

You can learn more about JTBD here, but the gist is simple: users hire products to do jobs for them.

THE 'JOB TO BE DONE' FRAMEWORK HAS BEEN POPULARIZED BY HARVARD PROFESSOR CLAYTON CHRISTENSEN

We felt that once we could articulate the overarching job our users had, we would better understand what their aha moment should look like. And once we knew that, our plan was to identify the exact place in the customer onboarding journey where the desired value had been created by our platform.

The 5-step customer onboarding process used by Ausmed to 5x conversions

Step 1: surveying our customers to find out about their jobs

To figure out the job, and understand how people describe it in their words, we used Hotjar to survey our users.

We sent a survey out by email to all customers who had already signed up. From memory, the sample size was quite small, maybe only a few hundred. The survey consisted of eight questions, and the results were analyzed using the default Hotjar charts.

Here are the eight questions, taken from Sean Ellis’ little-known Survey.io tool:

The question we were most interested in was “What is the primary benefit that you have received from the Ausmed CPD app or website?” Users provided a free-form text response, and we used Hotjar word cloud tool to analyze their answers.

We realized that Ausmed’s primary benefit was the ease of documenting continuing professional development (CPD). CPD is common in regulated industries like accounting, law, and healthcare, and ‘documenting’ means writing it down, or recording what you did.

Using this we defined our 'aha' moment as a new signup documenting their first CPD activity.

Step 2: starting to measure activation

Next, we needed some tech to help us start measuring it daily.

We originally used Intercom and Google spreadsheets. We used the Intercom JavaScript to count the number of daily signups without needing to query the database; we’d also send a JavaScript event to Intercom each time a user documented at least one CPD activity (more on this later). Dividing the two would give us our daily activation rate.

Each morning, when I arrived at the office, I would add the previous day's results into our shared Google spreadsheet.

As you can see, we didn’t have lots of daily signups at this stage, and our activation rate would fluctuate around 30%—meaning 3 out of 10 daily signups would document an activity during their first visit.

You may have also noticed that column K includes a measurement of how many people ‘Viewed add activity modal’. This was an important thing for us to measure, despite us not realizing at the time: this data point provided us with an insight into the number of people who had at least started documenting their first activity. Often, it would sit around 80%, despite only ≈30% actually finishing. It gave us our global maximum, and also showed us that the real bottleneck was a 10-field form that users just weren’t prepared to complete.

The ability to gain these insights was the catalyst for our most successful lesson: building a dedicated customer onboarding workflow.

Step 3: re-thinking the customer onboarding workflow

Have you ever signed up for an app or website and upon creation of your account just been dumped on the home screen or dashboard page? Me too.

We were doing this at Ausmed. Despite designing this fantastic customer onboarding flow that seamlessly helped people create their account, upload a profile picture, and set up their professional qualification information... we never actually got around to showing them how to document CPD.

We would simply dump them on the dashboard and hope they would find the documentation form.

If they did manage to find the button, this is what they would see…

The fact that this was not front-and-center didn’t make sense: after all, the customer was only here to document their CPD, so the action should be easy and clear. To remedy this, we decided to review our process and include the documentation part in the onboarding workflow itself.

Immediately it became clear that we needed to reduce the number of fields we were collecting. The old sign-up flow was capturing around 20 data points (even including profile photos and bios), so we decided to get rid of all this noise and only collect mandatory fields for account creation.

Our review basically involved us determining which fields were mission-critical, and then only asking for those.

Boom, immediately we were down to four fields depending on a health professional’s registration type. Profile pictures were gone, bio was gone, address was gone, phone numbers, preferred topics, gone… gone… gone. Just name, username, email, and password.

Now that the number of fields had reduced, we felt that we actually had some room to start introducing steps in the onboarding flow without the process becoming exhausting for the user.

For the first screen of our new onboarding workflow, we decided it was important to feel human and familiar, and remind our customers exactly why they were signing up. We did this by saying “Hi” and reiterating our core value proposition of ‘Documenting Your CPD Online’.

Next, we added the various prompts and fields required for someone to be able to document their first activity right inside the onboarding workflow.

If you look closely, you will notice a number of subtle but important new features that assist with conversion. These include:

1. Forward flow. Users really only have one option on each screen, to move forward to the next step. They can’t go back, and there are no ‘forks in the road’ or branching points in the logic. Onboarding is a one-way street. By doing this, we were trying to simulate Azjen's theory of planned behavior—namely, that someone’s likelihood of completing a task was dependent on their intention to engage in it. By not distracting from the task at hand, it was our hope that customers would continue with their original intention.

2. Single focus. Each panel has a single focus which ensures we don’t overwhelm or exhaust the user with too many questions. This would further enhance the theory of planned behavior.

3. Ramp-up questions. We ask the easier questions first and finish with the more text-heavy fields. The reason is the psychological principle of loss avoidance: users who have already invested time into signing up are less likely to leave halfway through. Asking easier questions at the start and positioning harder questions at the end means they are more likely to persist, as ‘they have come this far’ and are ‘probably getting near the end anyway’.

4. Progress. Notice the steps being reinforced in the header. We tied the steps to individual stages, which helped us create the impression of five steps—even though there are 10 different screens users have to go through. The psychological principle here is investment: people like to finish things they have started because they feel like they have already made progress.

Our front-end web designer further improved the customer onboarding flow by decoupling it from the main web application. This was a stroke of genius as it caused us to start to think about our onboarding workflow as a completely standalone app: it was no longer a part of the normal Ausmed app, it was a separate app designed to help people document one CPD activity.

Treating the onboarding workflow as a standalone web application was a mindset shift for us.

The results were amazing. Upon going live one month later, the new workflow approach was consistently delivering us a 20% lift on the absolute number of ‘activated users’.

Absolute number means that instead of 3 out of 10 users activating upon sign up, we jumped to 5 out of 10. As a relative improvement, this would be a 66%+ increase in conversion.

But despite this huge win, still 5 out of 10 users were not documenting CPD.

We wondered why not…

Step 4: plugging the gaps with email

After many months of further testing, we started to see our results begin to flat-line. No matter what we did, we couldn’t seem to increase our activation rate from that 50% mark. And we were fast running out of ideas.

We had recently set up Vero, an event-based email marketing platform, and had been playing around with the idea of sending emails to people based on things they did within our app.

Event-based marketing, if you haven’t heard of it, is a method of marketing that enables us marketers and product owners to build ‘event’ triggers into our applications and websites (e.g. a welcome email upon first signing up). In the context of onboarding, we can use these events to accurately describe the customer onboarding journey, and exactly which stage someone is up to.

Simple examples of events include:

• Started onboarding flow

• Set up qualification

• Viewed add activity workflow

• Added an activity

• Evaluated an activity

• Finished onboarding flow

Events are important because the entire onboarding app was built on one page: ausmed.com/onboarding. If we looked in Google Analytics, we would see something like this:

Pretty useless information huh?!

We began to build out our event triggers throughout the onboarding workflow, gradually describing each possible interaction and sending this information into Hotjar, Intercom, and Vero.

I’m sure you’ve read about customer onboarding email sequences or campaigns before. These are great, and many people do them. But we decided to do things a little differently here. Another stroke of genius perhaps…

Instead of sending check-in emails to the users who didn’t activate, trying to get them to go back into the app, we decided to send them emails asking them why they didn’t document any CPD.

These emails would be sent 1 hour after the user triggered the event ‘Set up qualification’, which hadn’t triggered the event ‘Evaluated an activity’ since:

The results were amazing. Every single day people would reply to us telling us all the things that were preventing them from signing up: from small bugs to big bugs, from confusing questions to not having anything to document.

Feedback we got included:

• “I’d like to know how I document for the past 2 years, can I back-date records in my CPD Portfolio?”

• “...if I change from Android to Apple devices or vice versa, how do I retrieve the documentation? Can I import from one Apple device on to an Android device?”

• “I got distracted by something and did not get to finish entering everything. When I went back to the app to continue inputting (within 20 mins), all my previously entered details had not been saved and I lost all of it. Frustrating. Is it possible to build into your app an automatic save function so that we don't lose unfinished entries?”

This single change assisted us to methodically drive our activation rate from roughly 50% to 85% at one point over the subsequent few months. It was the single most effective change we made because it gave us so many insights into the nuances and needs of our actual customers. The wins were far more meaningful, and our customers genuinely felt like we were listening.

In fact, if you take one thing away from this article today, it’s this: the easiest way to improve your customer onboarding process is to ask your customers what’s going wrong.

We would reply to every single person thanking them and telling them we will get to work on implementing their suggestions that same day. We still use this approach today as a way to perfect our new product features and offerings. It still works.

Step 5: not aiming for growth at all costs

Throughout this process, the most common response we received was “I don’t have any CPD to document right now.” This was completely understandable, but it presented quite a problem. It was like asking our customer to fill their car with petrol and having them reply “I don’t own a car.”

Nonetheless, we believed we could still deliver a customer onboarding experience that delivered the 'aha' moment despite this minor encumbrance. We began brainstorming ideas to achieve this.

“Maybe a skip for now button…”

“Or, perhaps we give them some education to document?”

“Ah, what about we just show them a demo?”

We went with the demo idea.

We quickly added in a text link below our existing prompt to ‘document CPD’. The text link read ‘Show me a demo.’

Users who clicked it would then be stepped through the documentation process. Each time they clicked, we would simulate them filling in the documentation record. Three or four clicks and they were done.

As you can imagine, this drove our activation rate from roughly 70% at the time to a whopping 85%. Close to our original estimate of the actual global maximum available. It was a raging success. But over time, we noticed something interesting had started to happen…

Through event tracking, we learned that customer churn among these users was much higher. A lot higher. People who did the demo retained half as much as those who documented their own!

It appeared that although many more users were now ‘activating’, far fewer were documenting their own CPD. Many more had opted to watch the demo instead of choosing the former and only option of documenting their own CPD. We estimated that the percentage of people who were documenting their own CPD had fallen from roughly 70% to around 50%.

So, although our customer onboarding process had increased overall, we had sacrificed ‘true activation’ in the process. Since then, we’ve gone back and forward about whether we should have this demo feature in our customer onboarding workflow.

I suppose the lesson learned from this last example is that it’s important to not have blinders on when you’re optimizing one metric on your site. A small change in onboarding can have big ramifications (both positive and negative) for other parts of your business.

So that’s it, we’re done! I hope this article has helped you think about your customer onboarding process, and the tools and mindset you’ll need when optimizing it.

Your customer onboarding checklist to achieve similar results

Want to apply these lessons to your customer onboarding process? A simple roadmap to get started:

• Identify the job your users want to do using a survey

• Set up key events

• Measure it (even if it’s done manually)

• Email non-converters to understand why they didn’t

• Treat your onboarding as a separate product

• Don’t compromise conversions at the expense of growth

Follow these steps, and you'll make onboarded SaaS customers feel confident and ready to use your product.