The 5 Most Important Customer Onboarding Metrics You Need to Track in 2024

You‘ve worked hard to acquire new customers and convince them to give your product a shot. Congrats! But your work isn‘t over — now begins the most critical phase in your customer‘s journey: onboarding.

Onboarding is where you deliver on all the promises made during the sales process. It‘s your opportunity to showcase how your product will make your customer‘s lives easier and provide real value. Get it right and you‘ll have loyal, successful customers. Get it wrong and you‘ll see high churn rates and lost revenue.

But how do you know if your onboarding program is working well? You need to track the right customer onboarding metrics. Let‘s dive into the top 5 metrics every company should prioritize in 2024 to ensure onboarding success.

1. Time to First Value (TTFV)

Your customers bought your product to solve a specific problem or achieve a certain outcome. Time to First Value measures how long it takes a new customer to reach that "aha!" moment where they first experience the value of your product.

For example, say you sell project management software. Your customers‘ TTFV might be when they launch their first project and start collaborating with their team in the tool. Or if you provide an email marketing platform, TTFV could be when they send their first fully designed newsletter to their subscriber list.

To determine your product‘s Time to First Value, talk to existing customers to understand their journey. What was the turning point when they realized how much easier your product would make their job or life? Use those insights to define "first value" and set a benchmark goal, like helping customers reach that milestone within their first week.

Then, focus your onboarding flows on guiding customers to that first value achievement as quickly and smoothly as possible. Some ways to do this:

• Welcome screens that orient new users and highlight your product‘s key benefits
• Interactive product tours that walk users through important features
• Templates and default settings to help them get started quickly
• Triggered messages encouraging them to take key setup actions
• Celebrate "quick wins" and positive reinforcement when they complete steps

By making Time to First Value a focus metric for your team, you‘ll create an onboarding experience that helps customers find success and value much faster, leading to higher satisfaction and retention.

2. Customer Churn Rate

Customer churn is the arch nemesis of SaaS growth. While some churn is inevitable, a high churn rate indicates that your customers aren‘t finding enough ongoing value in your product. And poor onboarding is often the culprit.

Here‘s why: if customers don‘t understand how to use key product features or don‘t see results quickly, they‘re unlikely to stick around long-term. Ineffective onboarding leaves them feeling confused, frustrated, and doubtful that your product can really help them.

To understand onboarding‘s impact, look at churn rates for different customer cohorts. For example, compare customers who signed up before vs. after a major onboarding revamp. If churn is significantly lower for those who went through the new onboarding program, that‘s a good sign it‘s working.

Pay attention to other indicators of poor onboarding that ultimately lead to churn, such as:

• Low product usage and engagement, especially of core features
• High volume of support tickets about basic product functions
• Uncompleted onboarding checklists or unfinished setup tasks
• Declining user happiness and satisfaction scores

Digging into churn and retention metrics through the lens of onboarding will help you identify gaps and areas for improvement. And making onboarding a priority will pay major dividends in extending customer lifetime value.

3. Free Trial Conversion Rate

For SaaS companies using a free trial model, one of the most telling signs of onboarding success is your trial-to-paid conversion rate. During a time-limited trial, your goal is to deliver as much value as possible to compel users to convert to paying customers.

Start by setting a target trial conversion rate as your benchmark — what percentage of free trial signups do you aim to convert to paid? While this varies across products and industries, a good rule of thumb is 15-20% conversion.

If you‘re falling short of your goal, onboarding is one of the first places to look. Some common reasons trial users don‘t convert:

• They‘re unsure how to complete key setup tasks in the product
• They haven‘t found their "aha" value moment
• They don‘t understand how to use the features that matter most to them
• They haven‘t engaged with the product much at all

To improve your free trial conversion rate, implement onboarding best practices like:

• Clear welcome messaging reiterating the value prop and key benefits
• A personalized checklist of setup tasks to complete during the trial
• Tooltips, guides, and walkthroughs of important features
• Proactive outreach to answer questions and offer guidance
• Prompts to take high-value actions that drive toward first value
• Reminders of trial time remaining to create urgency

Continuously test and optimize your trial onboarding flows against your conversion rate metric. Even small tweaks can make a big difference in converting more users to happy, paying customers.

4. Customer Effort Score (CES)

When it comes to customer experience, the easier the better. Customer Effort Score measures how much effort a customer has to put forth to accomplish a task or get an issue resolved with your company. A high-effort experience correlates with greater customer churn.

Onboarding is an ideal time to measure Customer Effort Score, since the goal is to help customers learn your product as seamlessly as possible. Use a CES survey at key points in the onboarding journey, such as after they complete the first login or finish a core setup task.

An effective CES survey asks the customer to rate a statement like: "Company X made it easy for me to get started with their product" on a scale of "Strongly Disagree" to "Strongly Agree." Follow up with an open-ended question asking how you could make the process easier.

To calculate CES, subtract the percentage of low-effort scores (those who somewhat or strongly agree) from 100%. A CES of 5% or less is considered good, while above 20% means your onboarding is too difficult.

Some ways to reduce customer effort and create smoother onboarding:

• Streamline your signup process and only collect need-to-have info
• Use clear language and avoid jargon in your product and help docs
• Provide proactive support and guidance at key drop-off points
• Automate repetitive setup tasks with integrations and import tools
• Personalize the experience based on the customer‘s goals and use case

Trigger outreach from your customer success team if a user gives a low CES score. A well-timed human touch can get a frustrated customer back on track before they churn.

Over time, track your CES trend and aim to lower it by continuously improving your onboarding experience. Even a small reduction in effort can have an outsized impact on customer retention.

5. Onboarding Completion Rate

If you‘ve invested in developing an onboarding program, you need to know how many of your customers actually finish it. Onboarding completion rate measures what percentage of signups make it all the way through your prescribed onboarding sequence.

Say your onboarding consists of four key steps:

1. Complete account setup
2. Invite team members
3. Connect integrations
4. Create first project

Track how many new customers complete each step, and how many finish all four. If a large portion drop off after step two, you know you need to focus on improving the invitation and integration connection experience.

You can also compare onboarding completion rates to customer churn. If 85% of users finish onboarding but you still have a high churn rate, your onboarding content may not be setting customers up for true success.

On the flip side, if only 15% complete onboarding but churn is very low, you may be making onboarding too complex and need to simplify.

To improve your onboarding completion rate:

• Set clear expectations up front about time and steps involved
• Provide a progress indicator so users know where they stand
• Trigger reminders to complete the next step if too much time lapses
• Remove unnecessary steps and focus on true essentials
• Offer incentives for completion, like product credits or a free month
• A/B test different onboarding flows to optimize for completion

Remember, onboarding completion alone doesn‘t guarantee customer success. But it‘s an important metric to track so you can identify friction points in the process and smooth the path to value.

Conclusion

Onboarding is your chance to start your customer relationship off on the right foot. It sets the tone for your ongoing partnership and has a huge influence on satisfaction, retention, and growth. By tracking these 5 key customer onboarding metrics, you‘ll be able to continually improve the experience and set your users up to find real value in your product.

But onboarding success is an ongoing process. Your team should always use these metrics to identify opportunities to optimize and test new approaches. Regularly review your onboarding data, gather customer feedback, and make updates based on your insights.

The most successful companies are those that prioritize customer onboarding and aren‘t afraid to evolve their strategies as their product and users‘ needs change. Put these onboarding metrics into practice, and you‘ll be well on your way to happier, stickier customers in 2024 and beyond.