In the SaaS industry, onboarding new users effectively is crucial for long-term success.

A smooth and efficient onboarding can significantly enhance user engagement, reduce churn, and increase customer lifetime value (CLTV).

This article will explore the seven essential onboarding KPIs you can't afford to miss. These key metrics will help you optimize your onboarding efforts and ensure a seamless customer experience from day one.

You'll learn:

• Why measuring customer onboarding metrics is important
• The seven critical onboarding KPIs for SaaS
• Tools you need for tracking onboarding metrics
• Industry benchmarks and setting realistic targets
• Avoiding common pitfalls in tracking onboarding metrics
• The role of email marketing in the customer onboarding success

By the end of this article, you'll have a comprehensive understanding of the most important SaaS onboarding metrics and actionable strategies to improve your SaaS onboarding.

Let's get started.

Why measuring customer onboarding metrics is important

Measuring customer onboarding metrics is crucial for SaaS companies to ensure a smooth onboarding process. These metrics provide insight into the customer onboarding experience, helping to optimize the onboarding flow and improve overall customer satisfaction.

By focusing on the right customer onboarding metrics, SaaS businesses can increase customer engagement, reduce churn rates, and enhance CLTV.

Tracking onboarding metrics helps identify pain points in the customer journey, enabling the customer success manager to intervene promptly. This proactive approach ensures that new customers quickly realize the value from your product, leading to higher satisfaction and retention rates.

💡 Effective customer onboarding drives user onboarding success, resulting in a higher free trial conversion rate and more paying users.

Regularly monitoring key performance indicators (KPIs) allows SaaS companies to fine-tune their onboarding efforts. You can also use customer feedback from onboarding surveys to continuously improve your onboarding processes and enhance the overall customer experience, leading to loyal, long-term users.

7 SaaS onboarding KPIs you can't afford to miss

1. Time-to-value

Time-to-Value (TTV) measures the time it takes new customers to realize their first significant value from your product - also known as the Aha moment.

In SaaS onboarding, TTV is crucial as it directly impacts customer satisfaction and retention.

The shorter the TTV, the quicker customers experience benefits. This leads to higher engagement and a greater likelihood of converting free trial users into paying customers. A swift TTV enhances the onboarding experience, fostering a positive first impression and increasing customer loyalty.

For SaaS companies, minimizing TTV is vital for boosting CLTV and preventing customer churn rate. It drives feature adoption and ensures the onboarding stage is effective.

Moreover, a shorter TTV can result in positive user feedback and higher satisfaction scores, which are essential for your SaaS business's overall success.

How to improve it:

• Simplify the onboarding flow: Design an intuitive and straightforward onboarding that quickly guides users to the first value.

• Provide quick wins: Highlight features that immediately benefit users, helping them achieve their goals faster.

• Offer guided tours and tutorials: Use interactive walkthroughs to help new customers understand and utilize key features efficiently.

• Leverage customer support: Ensure the customer support team is readily available to assist new users and address their questions promptly, reducing the time spent overcoming initial hurdles.

• Monitor and optimize: Continuously track and analyze customer onboarding data to identify bottlenecks and refine the process for faster value realization.

• Implement drip email campaigns: Send a series of automated, well-timed emails that guide new users through the onboarding process, offer tips and best practices, and highlight key features to help them achieve value quickly.

2. Customer engagement rate

Customer engagement rate measures the level of interaction between customers and your product. This metric encompasses various activities such as logins, feature usage, and time spent within the application.

A high customer engagement rate for a SaaS company indicates that users find value in the product and are actively incorporating it into their workflows. Engaged customers are more likely to become loyal users, advocate for the product, and contribute to a higher customer lifetime value.

💡 Monitoring customer engagement rate is essential for understanding how effectively the onboarding process fosters interaction. It helps identify which features are most valuable to users and which aspects may need improvement.

High engagement rates correlate with better customer satisfaction and lower customer churn rate, making it a critical metric to track.

How to improve it:

Tailor the onboarding to meet different customer segments' specific needs and goals, ensuring relevance and increased engagement.

• Interactive content: Use engaging materials such as videos, tutorials, and interactive guides to help users understand and utilize key features.

• In-app messaging: Implement contextual in-app messages and tips to guide users through features and encourage deeper engagement.

• Regular check-ins: Schedule follow-up communications from the CS manager to address issues and encourage ongoing usage.

• Gamification: Incorporate gamification elements, such as achievement badges, email notifications, and progress tracking, to make the onboarding experience more engaging and motivating for users.

3. Free trial to paid conversion

The free trial to paid conversion rate measures the percentage of users transitioning from a free trial to a paid subscription. This metric is crucial as it directly affects revenue growth and long-term viability.

A high conversion rate indicates that users find significant value in the product during the trial period, making them willing to pay for continued access. It also reflects the effectiveness of the onboarding process and the overall customer experience.

Monitoring and improving this conversion rate is essential for maximizing ROI in marketing and onboarding. A seamless and positive onboarding experience helps free trial users quickly understand the product’s value, increasing their likelihood of becoming paid customers.

Focusing on this metric boosts customer satisfaction, drives sustainable growth, and increases monthly recurring revenue.

How to improve it:

• Optimize onboarding: Ensure the customer onboarding process highlights core benefits quickly, reducing the time to first value.

• Targeted communication: Use personalized email campaigns and in-app messages to engage trial users, offering tips and tutorials relevant to their needs.

• Show relevant use cases: Present use cases tailored to the user's specific needs to increase the perceived value of the product.

• Monitor usage data: Track user behavior during the trial to identify and address obstacles preventing conversion.

• Engage customer success: Have the CS team proactively reach out to trial users to offer assistance and demonstrate the value of upgrading to a paid plan.

4. Customer retention rate

Customer Retention Rate measures the percentage of customers who continue using your product over time. This metric is crucial as it indicates long-term customer satisfaction and loyalty.

High retention rates mean customers consistently find value in the product, reducing churn and increasing customer lifetime value. Retaining customers is more cost-effective than acquiring new ones and signifies product success and stability.

💡 For a SaaS business, a high retention rate ensures steady revenue and builds a loyal customer base, leading to valuable word-of-mouth marketing. Engaged and satisfied customers are more likely to advocate for the product, enhancing its reputation and attracting new users.

Focusing on retention helps build a sustainable business model, supporting long-term growth and stability while fostering trust and loyalty between the company and its customers.

How to improve it:

• Enhance customer support: Ensure your customer support team is responsive and efficient in resolving issues.

• Regular updates: Continuously improve and update the product to meet evolving customer needs - don't forget to communicate on it via email.

• Personalized engagement: Use customer data to tailor communications and offers, keeping users engaged and satisfied.

• Customer success initiatives: Implement programs to educate customers on best practices and new features, reinforcing the value of your product.

• Feedback mechanisms: Regularly collect and act on user feedback to address concerns and improve the overall user experience.

Incentivize annual plans: Users on annual plans tend to churn less, so encourage customers to switch to annual plans with attractive incentives.

5. Onboarding completion rate

The onboarding completion rate measures the percentage of new users who finish the entire onboarding. This metric is crucial as it indicates how well the onboarding process is designed and executed.

A high completion rate suggests users find the process intuitive and beneficial, leading to a better customer onboarding experience. Effective onboarding equips users with the necessary knowledge to utilize the product fully, boosting satisfaction and reducing churn rates.

💡 Tracking onboarding completion helps identify where users drop off or face difficulties. By addressing these issues, you can streamline your process, making it more user-friendly.

A high completion rate drives feature adoption, maximizes product value for customers, and often correlates with higher engagement and better long-term retention, contributing to the SaaS business's success.

How to improve it:

• Simplify the process: Break down the onboarding process into smaller, manageable steps that are easy for users to follow.

• Provide clear instructions: Use tooltips, guides, and tutorials to help users understand each step of the process.

• Interactive elements: Incorporate interactive elements such as progress bars and checklists to keep users motivated.

• Personalized onboarding: Tailor the customer onboarding to individual user needs and use cases.

Segment email list: Segment your email list based on user behavior to ensure the right emails are sent to the right person, providing relevant information and support.

• Monitor and optimize: Regularly review SaaS onboarding metrics and user feedback to continuously improve the process.

6. Core feature adoption rate

Core feature adoption rate measures the percentage of users who utilize a specific feature within a given period. This metric is crucial for understanding how well new features resonate with users and their impact on overall product engagement.

For SaaS companies, a high feature adoption rate indicates that users find the new features valuable and are integrating them into their regular workflows. This drives deeper engagement, increases user satisfaction, and encourages long-term loyalty. Monitoring this rate helps companies identify which features are successful and which may need improvement or additional promotion.

Improving feature adoption rate is essential for maximizing the return on investment in product development. Effective strategies include in-app tutorials, targeted communication, and seamless feature integration.

Focusing on the feature adoption rate provides insights into user behavior and preferences, helping identify and remove obstacles to feature usage. This enhances the overall product experience and drives sustained growth and success.

How to improve it:

• Proactive email communication: Proactively send emails to inform users about new features or features they might like but haven't used yet. Segment your email list based on user behavior and demographics to ensure targeted and relevant communication.

• Provide guided tutorials: Use interactive tutorials and guided tours to help users understand and utilize new features effectively.

• Highlight key features: Ensure essential features are prominently displayed and easy to access, drawing users' attention during their initial interactions.

• Offer real-time support: Provide readily available customer support to assist users in navigating and adopting new features without delay.

• Analyze user data: Continuously monitor user behavior to identify obstacles and refine strategies for improving feature adoption rates.

7. Customer satisfaction

Customer satisfaction measures how happy and content customers are with a product or service. This metric is critical as it directly influences customer loyalty, retention, and overall success.

High customer satisfaction indicates that users find value in your product, are pleased with their interactions, and are likely to continue using the service. Satisfied customers are also more likely to provide positive referrals and reviews, enhancing the company’s reputation and attracting new users.

For SaaS products, maintaining high customer satisfaction is essential for sustaining growth and reducing churn. It helps build a loyal customer base that stays longer and advocates for the product.

Monitoring satisfaction through surveys and feedback allows companies to better understand user needs. By addressing issues promptly and continuously improving your product, you can ensure customers remain satisfied and engaged, driving higher CLTV and net revenue retention.

How to improve it

• Enhance customer support: Provide responsive and effective customer support to address issues quickly.

• Regular updates: Continuously update the product to meet customer needs and fix any issues.

• Personalized communication: Engage with customers through personalized emails and in-app messages to make them feel valued.

• Collect feedback: Use user feedback surveys to gather insights and make necessary improvements.

• Proactive customer success team: Implement proactive initiatives to ensure users get the most out of the product and achieve their goals.

Bonus - Support tickets

Support tickets measure the number of customer inquiries or issues reported through the company’s support system. This metric is vital as it provides insight into the user experience and identifies common pain points.

A high volume of tickets may indicate underlying problems with the product or onboarding process, while a low volume suggests that the product is user-friendly and issues are being resolved efficiently.

Efficiently handling support tickets is crucial for maintaining high customer satisfaction and reducing customer churn rates. It helps build trust and reliability, showing customers that their concerns are taken seriously and resolved promptly.

By analyzing support ticket data, you can identify recurring issues and take proactive measures to address them, improving the overall product and reducing the need for future support interactions. This leads to better customer satisfaction and loyalty, enhancing the long-term success of the business.

How to improve it

• Efficient support team: Ensure your support team is well-trained and equipped to handle tickets quickly and effectively.

• Self-service options: Provide comprehensive self-service resources such as FAQs, tutorials, and knowledge bases to help customers resolve issues on their own.

• Monitor and analyze: Regularly monitor support ticket data to proactively identify and address common issues.

• Automated responses: Use automated responses to acknowledge receipt of tickets and provide immediate assistance with common problems.

• User feedback: Collect feedback on the support experience to continuously improve the process and enhance customer satisfaction.

"The One Metric" approach to user onboarding

While doing my research I found this interesting concept. Inspired by Claudiu Murari's article on userlist.com, "The One Metric" approach to user onboarding focuses on users who experience the core promise of your product for the first time. This ensures that new users quickly understand and appreciate the primary value your product offers.

The concept is straightforward: your pre-sales team presents a promise of what the customer can achieve with your product. During the customer onboarding, the critical metric is whether users reach that promise. If they do, it's onboarding; if they repeatedly achieve it, it's an activation goal; and if it becomes a habit, it's retention.

Setting the right expectations is crucial. Misaligned expectations can lead to dissatisfaction. The goal is to ensure users’ initial experiences align with pre-sales promises, leading to a smoother transition from trial to paying customers.

💡 When analyzing metrics, distinguish between correlation and causation. For example, if users who visit the settings page convert more frequently, it might indicate better engagement, not that visiting the settings page is crucial. Pinpoint activities that truly support conversion.

How to improve it

• Identify core promise: Clearly define the primary value your product offers and ensure this promise is central to the onboarding.
• Align expectations: Ensure promises made during the pre-sales phase align with the user experience during onboarding.
• Track customer progress: Use analytics tools to monitor how quickly and effectively users reach the core promise.
• Iterate and optimize: Regularly refine the customer onboarding process based on user feedback and data insights to reduce time to value and enhance user satisfaction.

The tools you need

Tracking SaaS onboarding metrics effectively requires the right tools to gather, analyze, and act on data. Here are some essential tools:

1. Customer.io: Allows for sophisticated email automation and segmentation based on user behavior, ensuring personalized and timely communication to enhance onboarding and feature adoption.
2. Amplitude: Helps understand customer engagement through behavioral data analysis across the customer journey.
3. Mixpanel: Calculates metrics at the account or company level, such as product adoption, active usage, and retention.
4. InnerTrends: Offers pre-built reports and analytics to find onboarding optimization opportunities.
5. Refiner: Improves customer feedback responses with configurable in-app survey widgets, automating actions based on answers.

Onboarding benchmarks

Industry benchmarks provide a reference point for evaluating your onboarding process. I've collected the benchmarks for each 8 metrics we discussed:

• Time-to-value: 1 day, 12 hours, and 23 minutes (Source: Userpilot).
• Customer engagement rate: No specific benchmark.
• Free trial to paid conversion rate: No specific benchmark, but 25% is considered the B2B industry average.
• Customer retention rate: 85-90%.
• Onboarding completion rate: 19.2% (Source: Userpilot).
• Core feature adoption rate: 24.5% (Source: Userpilot).
• Customer satisfaction score: No specific benchmark, but aim for 75-85%.
• Support tickets: No specific benchmark.

Set achievable goals based on industry standards and your current performance. For example, if your time-to-value is three days, aim to reduce it to two days over the next quarter.

Use benchmarks as a guide, but tailor targets to fit your business context and user needs. Regularly review these targets to ensure they remain relevant and challenging.

Be careful of tracking the wrong things

One common pitfall is focusing on vanity metrics that don’t provide actionable insights. For example, tracking the number of sign-ups without considering user engagement can be misleading.

Another mistake is interpreting correlation as causation, which can lead to incorrect conclusions about what drives success.

To ensure meaningful data collection, focus on metrics that align with your business objectives and directly impact the success of your users. Regularly review your metrics to confirm they provide valuable insights.

Use customer feedback and data analysis to refine your tracking methods, ensuring they accurately reflect the user experience and drive improvements in the onboarding process.

How email marketing can help your customer onboarding process

Email marketing plays a crucial role in enhancing the customer onboarding process.

Personalized email sequences can guide new users through the initial stages, ensuring they understand and utilize key features of your product.

Automated emails triggered by user actions can provide timely assistance and encourage feature adoption, ultimately leading to a more successful onboarding experience and higher conversion rates from free trials to paying users.

Past the onboarding stage, regular emails help maintain engagement, reducing the likelihood of customer churn by keeping users informed and supported.

🔴 If you want to improve all of these onboarding metrics, email marketing is a must.

Customer satisfaction should be your priority

Incorporating important onboarding metrics is essential for optimizing the customer journey and ensuring long-term success for your SaaS business.

By focusing on key metrics such as time-to-value, customer engagement rate, and onboarding completion, you can enhance user satisfaction and retention.

At Digi Storms, we specialize in crafting email strategies that activate, retain, and monetize your users, helping you boost your CLTV.

Get in touch with us today to transform your onboarding process and drive sustainable growth for your SaaS.