Onboarding as a Growth Strategy

Insights from Theo Ohene, Founder of Growth Roadmaps

Happy Saturday to the 8,875 builders, marketers and unicorns reading this newsletter.

Today we're going to look at product onboarding as a growth strategy.

We'll hear from Theo Ohene about onboarding best practices and common mistakes startups make around onboarding new users.

Theo is the Founder of Growth Roadmaps and Growth Expert-In-Residence at Kings College, University of London. He advises early-stage teams on product-led growth strategy and user onboarding.

The average app loses 77% of users within 3 days. That's scary stuff.

Read on to learn how to deliver value fast and retain users longer.

Time to read: 4 minutes

Growth stage: Early

Difficulty level: MEDIUM

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" Without an excellent product, acquisition is futile. It's your competitive advantage."

- Theo Ohene, Growth Advisor

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Theo and I discussed how startups should think about user onboarding.

What I love about Theo's approach is that he focuses on how products can provide value quickly to users and minimize cognitive friction (aka "Don't make me think"). Great products make growth so much easier and less dependent on marketing tactics.

If you want to increase product adoption and retention, I highly recommend you get Theo's free onboarding checklist.

Here are excerpts from our conversation that will help you wow new users faster and get them to stick around longer.

What Does Great Onboarding Look Like?

The best onboarding experience helps someone hit their goals quickly. It's about giving value.

I compare it to a great host. When you go to someone's house for the first time, a great host makes you feel welcome, tell you where you might want to sit for the best view of the game, they warn you about the cat. They ask about your preferences, so that your experience is specific to your needs.

You get the right information when you need it. They ask the minimum questions to create the right experience and then help you get there without fuss.

What's one of your favorite onboarding flows?

I really like Klaviyo's onboarding flow.

The goal with Klaviyo is making money from email. Let's say you have a Shopify store. They welcome you to the product, make it really easy to import your data to the app and then you're straight in. They take you through the process of setting up a welcome flow. They personalize it with your colors and brand name. They do a lot of the heavy lifting for you. It takes 5 minutes.

The goal for the user is to start making money from email, and their welcome flow is designed for just that. It's a little bit meta, but they know what they're doing.

What are the most common mistakes startups make with onboarding?

Setting it up once:

Building an onboarding experience is not a one-and-done thing. It's really an ongoing process to improve it. A lot of times it gets lost within a company and falls through the cracks. It's not necessarily marketing, not necessarily product or UX. Often it's not owned by anyone and as a result there's no ongoing improvement. This is a massive error because it's such an important part of the user experience, both for the user journey and getting users to revenue. It has to be improved continuously.

Leaving users lost:

If someone comes into your app and they don't know what to do, they have to play around...One of my favorite mantras is "Don't make me think."

It's a reference to the book by Steve Krug.

It should be obvious what a user should do, where they click. Don't assume your app is intuitive.

Be very clear on the value and how people get there.

Not observing and testing their own onboarding:

Many startups don't sign up for their own product. They haven't seen real users go through the experience. They haven't watched any user recordings, they don't do any user testing. Maybe they tested it months ago but they're not interviewing users to understand their experience.

I'll often see with clients who are frustrated with low conversions that there are bugs. I'll sign up and go through the flow and find issues they didn't even know about. Empathize with users and understand their experience. Go back regularly and use the product.

Not having a cohesive experience.

Oftentimes there will be a landing page done by marketing, the sign-up flow might be done by engineering, and then the inside of the product is done by Product. It's not cohesive. The messaging doesn't match. The look, feel, messaging should all cohere.

Not valuing the importance of onboarding early on.

You've got conversion rate for sign ups and then activation rate. Working on those percentages, making sure you've thought about onboarding and conversion. Otherwise you'll miss a lot of opportunities if you're paying for advertising or launching on Product Hunt. You've got a leaky bucket.

What tools are available to run onboarding tests?

Google Optimize is going away so the majority of tools are actually pretty expensive. You've got Optimizely, VWO, Chameleon, AppCues, Intercom to some degree.

I wouldn't say startups should focus on testing too early. But that they should be deliberate about onboarding. Later on as traffic increases, you can then increase your volume of experiments. Before then, just be very thoughtful about your experience and use qualitative feedback.

How are onboarding and retention related?

For mobile apps, 25% of users abandon an app after just one use. the average app loses 77% of its daily active users in the first three days after install.

So most apps don't even get to real retention. The focus must be on onboarding. There's a direct correlation between onboarding and retention.

The key is to think that you've only got one shot. If you don't make the right first impression, you'll never win that customer. So your focus should be on time to value.

Reforge breaks product engagement down into 3 steps:

  • set up

  • aha moment (first value)

  • habit formation / product adoption

Most users never get to habit formation, which is key to retention and monetization. Habit formation is about transformation.

How do you get people across the free to paid chasm?

The average free to paid conversion is 5%.

For freemium saas:

If you don't ask for cc up front, free to paid is 10%.

If you do ask up front it's 25%.

Why it's so low:

  • people don't get to aha moment

  • they never activate

  • they don't get to habit formation

Bumble, for example, has 3.3 million paid subscribers. Does $944M in revenue. When you get into the app and start seeing people in your area, you get a taste for the value and want to upgrade to hit their goals quicker.

B2C is single-player. A single habit.

But for product-led, B2B SaaS, now you're talking about getting multiple people to develop habits around your software. You need multiple people to see value and start creating habits. Miro, for example, starts with a single player to use the white board or mind map, and when you need others to collaborate with it, it becomes part of other peoples' workflow. One key is to get to that multi-player mode as soon as possible.

How should a startup build an onboarding testing roadmap?

Follow the data.

Map out your funnels in a tool like Mixpanel, Amplitude or Heap.

Look at which points in your funnel have the highest drop-off. Set aside time to watch user recordings. Get people from different parts of the company to brainstorm about reducing friction and getting people to value quicker. In some cases you want to personalize (which introduces friction), to create a better experience.

You need to get buy-in to make sure people from across the org are bought in.

Then rank the best experiments. Which are going to have the highest impact and are the easiest to do. I like the ICE framework. And then iterating on the process.

How should one get user feedback?

User feedback - a lot of people miss this.

They don't know what the jobs to be done are for the user. Jobs to be done are a critical part of onboarding. It's 'What is the goal?' Why does someone use the product in the first place?

A lot of people skip this step. But it's critical.

I like to send out an automated email on day 1 that asks what are you trying to achieve? Over time you'll start getting insights. Another way to do it is to ask within the product. And once you've got a few themes, you can give them an option that then personalizes the onboarding experience to serve their goals. Asking people what they want in the product and then personalizing it is critical.

Also, asking active users if the product is useful, what can be improved, etc.

And then the same with churned users. If we know users churned because they didn't achieve their goals, we can learn why they didn't achieve their goals.

A lot of times people aren't even aware of product features that would have helped them achieve their goals. So it's critical to know what people want and then give it to them.

I'm a big fan of personalization and templates. Asking people what they want and then giving them templates that get them to value quicker. Notion, Canva and Miro do this really well.

Understand what they want and how can you surface it in a way that's useful to the person.

What are some tests you've run that were particularly impactful?

Have you ever had the experience of installing an app and you're excited to get in and use it, and then you've got to go away and sign up for it with double opt-in email verification? For me, this is an example of unnecessary friction. I think people think you have to do this. The point of good onboarding is that we increase motivation, make it exciting to come in, and we want to keep this going through because we may need to ask things.

I was working with Republic, a platform to invest in startups, crypto, video games and more. People sign up excited about investing for the first time. But before they can, there’s legal questions they have to answer. We didn’t want to add further friction to this process. So we took out the need for upfront verification before you see the product - we created a process to verify emails on the backend. This change caused a big lift in the number of investments made by Day 1 users.

I was working with acasa, a bill-splitting and home management app. People were giving us lots of poor ratings and leaving straight away. People didn't know how to use it - so we made a walkthrough where people had to create their first payment rather than figuring it out themselves. It increased the activation rate by 45%. This had a direct correlation to Day 30 retention, which was really important to app store ranking and growth for mobile apps.

How do you conduct an onboarding audit?

The process is fairly simple:

  1. You fill out a survey

  2. I record a video walkthrough of the entire user experience

  3. I go through each step within the product

  4. I fill out a few checklists for each screen

  5. I write up specific recommendations for each step of your funnel

  6. We get on a call to go through my findings

  7. We touch base a few months later to discuss progress

By the way: you can hire Theo to run an onboarding audit for you.

What's your framework for onboarding optimization?

1. Understand jobs to be done. What is the product value? Define what activation and onboarding success is

3. Map out the user journey

4. Data - create the funnels and watch recordings

5. Analyze the time to value. How quick to activation step. Is there unnecessary friction?

5. Set KPIs/goals

6. Brainstorm experiments

7. Test and measure

Thanks again to Theo for his insights into product onboarding.

What type of growth strategies do you want to learn about most?

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✨ That's it for today.

Onboarding users effectively is key to creating sustainable revenue.

Between Theo's onboarding optimization framework, common mistakes and his free checklist you'll be on your way to more product-led growth.

I hope these insights help you in your growth journey.

-Brian 🦄

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