User Onboarding Metrics
- 04.21.2022
- Nathan Tufts-Brown
- 6 min read
Image credit: Rodnae Production
One of the pillars of designing and maintaining a great user onboarding experience is metrics. Number of users, number of minutes for first time users to reach a goal, measuring spending behavior and quantifying satisfaction. All of these numbers are essential in measuring your user onboarding experience.
Time to break out the calculator. Or abacus, whatever’s closer.
1. Daily and monthly users
One of the cornerstone metrics for user onboarding is Daily and Monthly Active Users.
Active Daily users are defined by those that engage with the product in any way within a 24 hour period. Active Monthly users are the individuals who have engaged with the product in one way or another over the course of a month. This can mean simply logging in.
Dividing your Daily Active Users (DAU) by your Monthly Active Users (MAU) can give you a sense of your product’s “health.”
Illustration by Priyanshi Bareja, Raivix
Another way of thinking about this is your product’s “stickiness”, how many of your users are sticking around after a 30 day period. This metric is relevant to many departments, marketing, sales and business, and it should be shared.
Of these two metrics, Monthly Active Users is the one that you want to keep your eye on. It is the foundation for the majority of the other metrics in this article and beyond. It is the pillar for measuring marketing, onboarding and customer engagement effectiveness. There is no set standard for this metric, but usually apps over 20% are said to be good, and 50%+ is world class.
Both of these measurements are centered around the quantity of your user base. To determine the quality of your users, conduct user interviews. Find those that have left and those that are invested in your product to see where they differ and overlap.
2. Churn and Retention Rates
Churn and retention are two sides of the same coin.
Churn rate is how many customers are leaving a SaaS company per month. A healthy churn rate for a SAAS company is in the 3-8% range.
Calculating your churn rate is fairly easy. Number of customers who left divided by customers at the beginning of a measured period plus customers acquired during that period x 100 = your churn rate.
Illustration by Priyanshi Bareja, Raivix
Churn is inevitable and also not inherently bad. You will have individuals that were not the right users for your product under any circumstance.
Your retention rate is, well, a measure of how many customers you’ve retained in a given period of time. Usually this is measured on a monthly basis for SaaS companies.
Number of customers at the end of a period subtracted by the number of new customers during the period. This is divided by the number of customers when the measured period began multiplied by a hundred = your retention rate.
Illustration by Priyanshi Bareja, Raivix
Having a good retention rate also means that you have a good product adoption rate. The strategies for lowering your churn rate are nearly identical to improving your retention metrics.
- As mentioned above with the daily and monthly users, talk to the most active users and those that left.
- Have excellent customer service.
- Ask for feedback.
- Communicate proactively.
I have a secret for you.
Come a little closer.
There is no magical “one size that fits all” retention metric. Yes, it’s great when this number is in the 90% range and higher, but it truly varies from the company size, the cost of the product, and how many customers there are.
3. Time to value (TTV)
Time to Value is how long it takes for new users to first recognize the value of a new product experience.
This metric is connected to the core purpose of the product. This means that there’s no universal metric to strive for. Not every product can have their TTV in the first 5-10 minutes.
Beginning to notice a trend of no easy answer?
A great way to start identifying your TTV is pinpointing your aha moments, the milestones in the user experience where value is recognized. Think of TTV as measuring your AHA moments.
Imagine you are redesigning a product’s onboarding, let’s say it’s a team collaboration tool like Airtable. After looking at your DAU (Daily Active Users), MAU (Monthly Active Users) and user interviews, you see that one of the key AHA moments you want to measure is users building and sharing a task with a team member.
For new users within a month period, you see that the TTV for that particular AHA moment has an average of 9 minutes.
4. Feature adoption
Whereas product adoption is measuring how many individuals have utilized the SaaS product, feature adoption is looking at how many specific aspects of the product have been used.
With the daily and monthly user metrics, you are looking at the bare minimum interaction, logging in. Feature adoption tells a different story because it represents deeper engagement with the product. It can also be a deterrent against product bloat, where an application is filled with features that users ignore or, worse, are annoyed by.
Let’s say there’s a food delivery app that has a new message feature where you can directly communicate with the driver and the restaurant. To gauge the effectiveness of this new feature you would look at the number of people engaging specifically with the messaging feature.
Illustration by Priyanshi Bareja, Raivix
- Make sure the feature is something people want to adopt
- Do your research. Listen to your users, especially those that left your product. Maybe they were frustrated that they couldn’t message the restaurant through the app.
- Announce it right away
- Make sure your feature announcement is easy to understand and highlights how it makes the user’s life easier. This can be done through email or a mini announcement within the product.
- Treat it like a mini onboarding experience
- While you are (hopefully) adding a feature that makes the user’s life easier, they are essentially being trained to do something new.
5. Free-to-paid conversion
Free trials have practically become a standard with SaaS products. It gives users a preview of the software and it allows users to engage with the product without any upfront sticker shock. What you need to track is what happens after the trial period is over, thefree to paid conversions.
- Opt-in. This is where no payment information is required at the beginning.
- Opt-out. As you may have guessed, this is where the payment information is required at the beginning.
Each one has their strengths and weaknesses that need to be considered that will have an impact on your conversions. For instance, a 2012 study found that Opt-in had more users retained, but Opt-out out had more paid user conversions.
Considerations for Opt-In and Opt-Out
The following considerations need to be made when deciding what trial version to go with.
- How established is your brand?
- If you have a brand that’s young, people don’t know who you are and have a reluctance to hand over information right away.
- How well do you know your customers and their wallets?
- There’s a huge difference between having the money to spend and willing to spend money. Know what your customer base is willing to invest in.
- In what other ways have you built trust with your product experience?
- Has your marketing and copy shown the value of potential customers investing in your product? The answer to that question should be a yes.
6. Net promoter score
Normally, I am not the biggest fan of surveys but they have their time and place. This is one of those times.
The net promoter score (NPS) is a survey, and there’s a particular question that measures how likely an individual would recommend a company’s product and/or services, on a scale of 1-10.
- 10-9 are “promoters”, those that are giving you free advertising and loyalty.
- 8-7 are “passively satisfied”, those that are content to stay.
- This is one of the rare metrics that does have an industry standard. The average is usually around 7. At this number a good amount of customers are satisfied and a few are even happy.
- 6 and below… it starts to get ugly.
Now what does this have to do with user onboarding?
Great user onboarding is the sign of a company that has done its research, collaborated and experimented to provide the experience customers deserve. No great user onboarding experience will be part of a bad product. Stellar user onboarding helps establish trust, a means to take action and starts laying down the groundwork for customer loyalty. A NPS score is an indirect measurement of this process.
7. Conclusion
You may have noticed a trend with these metrics is that nearly all of them don’t have an industry standard number that will “fix” or automatically improve your onboarding. All of these metrics should be used at one point or another to gauge your user onboarding effectiveness and customer satisfaction.
Without numbers it’s just a guessing game.
