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Maximize Customer Retention with Onboarding Metrics

Learn how to improve retention with customer onboarding metrics and find out the most important KPIs for onboarding success.

Onboarding is an important step throughout the entire customer lifecycle, setting the stage for customer success by helping clients learn how to use your product. When done well, a great onboarding strategy can demonstrate the value of your offering and help new customers build valuable relationships with your brand.

User onboarding helps new customers and prospects use your product or learn more about your company. Depending on your business, it may include signing up for a product demo or simply welcoming them to your brand and setting expectations. Your strategy will keep your customers engaged and give them a reason to use your product again and again.

But how do you measure the effectiveness of your customer onboarding and retention strategies? Customer onboarding metrics and KPIs can help you determine whether your technique is successfully helping you retain customers and identify areas of improvement to boost sales.

What are customer onboarding metrics?

Customer onboarding data, also known as key performance indicators (KPIs), are metrics you use to measure your performance and the effectiveness of your onboarding efforts. Your onboarding metrics determine if your customers obtain value from your product or services and can help them learn more about your brand and its offerings.

Customer success onboarding KPIs vary by company and goals. Still, they help businesses redefine the customer experience, allowing them to use actual client data to make more informed decisions for the onboarding program. Examples of KPIs include any metrics that align with your company's goals. For example, your KPIs might consist of growing sales by x percentage by the end of the year.

These are just a few basic ecommerce metrics you can use to make better business decisions to increase conversions, revenue, and customer satisfaction.

Top customer onboarding metrics to use

Tracking and measuring your customer onboarding KPIs can help you improve overall client satisfaction, retention, sales and revenue, and lifetime value.

In addition, customer onboarding analytics extracted from your data enables you to make more informed decisions about your onboarding strategy, reducing customer churn rates and improving sales. For example, according to Bain & Company, a global management consulting firm, a 5% increase in customer retention produced more than a 25% increase in profits in financial services.

Here are some of the most important customer onboarding metrics to use to evaluate the success of your strategy:

Client engagement

Measuring client onboarding metrics like customer engagement allows you to determine customers' interest in your products and services. Ultimately, the engagement rate measures how often they interact with your brand. Engagement is crucial during onboarding because it can help you build and manage customer relationships. However, to effectively track, measure, and use this metric, you must determine the percentage of clients using your product and how often.

Time to first value

Time to first value (TTFV) measures how long it takes customers to benefit from your product—or when they see the first value from it. This is a highly subjective metric because you must determine what value means to the customers. Your customers must find value as soon as they begin onboarding. For example, if you sell HR software, you need to determine whether customers find value as soon as they sign up or when they start using it. The TTFV is reached when a customer realizes that your product can benefit their daily lives in some form.

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Onboarding completion rate

The onboarding completion rate tells you how many of your customers are completing onboarding and using the product as intended. Since you've taken the time to create an onboarding process, you need to know how many customers actually finish it. Your customer onboarding may consist of several steps, and by tracking each step completed, you can find areas that serve as bottlenecks or prevent customers from finalizing onboarding.

Customer churn rate

Churn rate is a customer onboarding metric that tells you how long clients remain customers. Ultimately, the longer they remain customers, the more you stand to make from their business, and onboarding can help new patrons understand how to use the products and services they've purchased as quickly as possible. Therefore, your onboarding should reduce churn rate and make it easier for customers to understand the value of your product.

Free to paid conversion rate

If your product offers a free trial, you must determine if it's successful at helping you convert customers to paid users. Free to paid conversion rate tells you how quickly free trial users go from their complimentary period to a paid plan. If you use free trials to attract customers, you must determine how fast customers can see the value in the free product and choose to upgrade to the premium or paid version. Measuring this onboarding metric can help you determine whether the free trial is enough to convert prospects into paying customers.

Average response

The average customer response rate measures how long it takes for the business to respond to customers. In the digital age, customers want fast and immediate responses; they don't want to wait for an email or call, especially when they have a service issue. Therefore, to appease your clients, you must ensure swift response times.

Most companies can't afford to wait to respond to customers because they're willing to go to your competition if you don't respond fast enough. However, setting expectations during the onboarding process can help mitigate some of this risk because you can inform customers about how long it takes to receive a reply.

Retention rate

The retention rate is the opposite of the churn rate. It measures the percentage of users you keep over a specific time period. Retention rates are crucial because the more customers you retain, the higher your revenue. Onboarding can improve your retention by allowing you to set expectations with customers and provide them with quality customer service.

A quality onboarding process results in higher retention rates and customer lifetime value, meaning you make more from a single client. In fact, 62% of loyal customers will recommend brands they like to their friends.

Product adoption

Product adoption measures how many users are utilizing the product regularly. It occurs after customers have reached their time to first value, meaning they saw value in the product and have continued to use it because it solves a problem for them.

If you have a low product adoption rate, check your time to first value rate to determine if they're related. For example, a long time to first value rate can directly affect product adoption. Meanwhile, the faster your customers can see value in their product, the more likely they'll use it regularly.

Customer progress

Customer progress ensures that the training you provide through your onboarding process allows customers to use the product effectively. Based on this timeline and various customer feedback, you should measure the time it takes customers to complete any training to determine whether to shorten or lengthen the process.

There are several ways to train clients, including live training, videos, how-to articles, and FAQs. However you choose to train customers, ensure that you can provide them with all the information they need to learn how to use the product. If they can't use your product, they won't find any value, meaning you might lose them as customers.

Escalation response time

Escalation response time is the amount of time it takes for customer success teams to answer serious customer concerns and complaints. How you handle complaints can affect your relationship with customers, and you should be able to track how long it takes to resolve issues from the time a customer makes one. If you find that escalation response times are high, it means there's an issue with your onboarding process or customer service team.

Reasons to track onboarding metrics

Tracking your customer onboarding metrics can help you find areas of improvement to increase completion rates and help customers succeed in using your product. KPIs for the onboarding process can help you:

  • Identify roadblocks & issues: If you notice that only a few customers are completing onboarding, then you know there's an issue preventing the majority of your customers from finishing your training.
  • Improve completion rates: Ultimately, your customer onboarding process aims to educate customers on how to use your product so they can begin utilizing it on their own regularly. However, they are less likely to use the product if they never completed onboarding. Instead, they might cancel the service. Completion rates mean that your onboarding process was easy and didn't take too much time, which can help customers quickly learn the ropes of a new product, even if they've never worked with anything similar before.
  • Increase customer satisfaction: Onboarding goes beyond a welcome email series and may require comprehensive training. They're necessary for many products and industries, especially SaaS companies, where customers must learn new software to help them complete their daily work. Unfortunately, if your customers can't complete your onboarding process, they might cancel their subscriptions or services and move on to a new product. Measuring customer onboarding KPIs can help you determine how to increase customer satisfaction, and it will ensure you can respond to inquiries as quickly as possible.

Enhance your onboarding process with valuable metrics

Tracking your customer onboarding metrics can help you find new ways to improve customer success and help patrons see the value of your product. With several customer onboarding success metrics, you can begin experimenting with your current process and ensure clients complete onboarding quickly and efficiently with fewer roadblocks.

Mailchimp makes customer onboarding easy, allowing you to send welcome emails and begin onboarding as soon as prospects sign up. Then, you can track your customer onboarding KPIs to find areas of improvement. Try Mailchimp today.

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