The customer onboarding process can be the beginning of a fruitful and long-term relationship between the company and loyal customers. It’s also among the most important parts of the customer journey. Keeping track of customer onboarding metrics and key performance indicators (KPIs) provides a benchmark from which you can determine what works, what doesn’t, and what areas need improvement.
There isn’t a single onboarding KPI that can reveal everything you need to know. However, all of the metrics mentioned in this article, when combined, can provide you with a holistic view of the whole customer onboarding process. In this article, you’ll learn why customer onboarding metrics matter and 10 of the most important customer onboarding metrics that you need to track in your onboarding strategy.
Disclaimer: The information below is accurate as of March 5, 2024.
Why it’s important to track customer onboarding metrics and KPIs
Alongside some best practices that you need to employ to ensure a successful transition, you also want to keep an eye on these key customer onboarding metrics. Keeping track of customer onboarding KPIs helps SaaS (software as a service) businesses to continuously optimize their onboarding strategy. A better onboarding program almost certainly improves the user experience and ensures you’re not losing out because of something preventable.
Here are the main reasons why you should always keep an eye on your onboarding metrics and KPIs:
- They help to build loyal customer relationships and loyal customers spend more money.
- They provide valuable insights into new customer thoughts and behaviors.
- They identify existing bottlenecks in the current process.
- They anticipate issues or challenges and help to address them sooner.
- They increase customer satisfaction through supportive and efficient service.
- They help to make informed decisions and continuously improve your onboarding processes.
- They identify existing trends, patterns, or areas for optimization.
- They drive product adoption which, in turn, increases customer satisfaction, retention, and lifetime value.
All of these are a plus to your bottom line and enhance the customer experience which directly translates to positive marketing and profit. One study found that customers will tell on average nine people about a positive brand experience, but 16 people about a negative one. Having a positive onboarding first impression with new customers is critical to retain and attract new business.
Now, let’s explore which metrics you should be measuring to reap these benefits and make the most of your customer onboarding process.
10 customer onboarding metrics to track
1. Completion rate
As its name suggests, the completion rate looks at the total number of new clients that underwent the program and completed it. Determining the customer onboarding completion rate helps you to evaluate the overall effectiveness of your program. It also indicates whether the customer fully understands your product or service. Generally speaking, a low completion rate suggests that you should analyze your onboarding data and recalibrate your approach.
A customer onboarding solution like Docebo can help you out in this regard. It smooths out the process and helps you personalize the customer onboarding program to the wants and needs of each individual user.
- Measurement: Percentage (%)
- Target value: Ideally, 100 percent, as it indicates that all new customers completed the onboarding process
- Measurement period: Typically measured monthly or quarterly but can vary as needed
- Data source: Onboarding tracking system or customer management software
- How to calculate: (Total number of users with a complete onboarding / total number of customers over the same period) x 100
2. Time to value (TTV)
TTV is a metric that tracks the total time it takes from when new users begin their onboarding process to when they start reaping the benefits of the product or service. In the world of SaaS customer onboarding, this moment is also known as the “eureka” or “aha moment.” The sooner new customers see a return on their investment (ROI), the better. With a good TTV, you also increase the chances of a good customer retention rate and reduce your overall churn rate.
It’s important to note that the “value” in this equation is not what you hope to deliver, but what customers expect to get from your product or service. One of the most effective ways to lower TTV is by optimizing the onboarding flow. You can do this with a professional customer training platform like Docebo. With it, you can help your new clients reap the value of your product faster by training them in all its features and functionalities.
- Measurement: Depending on your product or service, this can be weeks, days, hours, etc.
- Target value: As low as possible, depending on the functional complexity of the product or service
- Measurement period: From the time new clients enter the onboarding phase to when they first experience benefits from your product
- Data source: Onboarding tracking system or analytics platform
- How to calculate: There is no specific formula for the time-to-value metric. You need to keep an eye on the time elapsed between when the user journey begins and when clients start seeing real value from your product. Aside from customer ROI, the value can also be translated as to when a customer upgrades from a free trial period to paid, or be based on a new feature adoption rate, for example.
3. Engagement rate
Customer engagement rate tracks customer interactions across all touchpoints throughout the onboarding process. It looks at how engaged both existing and new customers are. The more engaging the onboarding experience is, the more your active users will interact.
A low customer engagement rate typically means that you need to add more engaging methods throughout your customer onboarding process. Gamification features such as rewards, badges, or score points, similar to those provided by Docebo, can help boost user engagement and even drive completion rates of your onboarding training program.
For SaaS onboarding, you need to also keep an eye on the in-app user behavior to determine which events are the most relevant to customer success. This provides a more in-depth view of which areas of the onboarding workflow are and are not performing.
- Measurement: Percentage (%)
- Target value: Ideally, 100 percent, as it indicates active customer usage and interaction
- Measurement period: Typically measured monthly or quarterly
- Data source: Usage analytics platforms and customer activity tracking tools
- How to calculate: (Total number of actively engaged customers over a set period / total number of signed-up customers) x 100
Say, for example, you have 30 customers that have signed up for your service over a set time frame. And of those, 25 have logged in and engaged in activities from the onboarding checklist. This means you have a customer onboarding engagement rate of (25/30)x100 = 83.3%.
4. Customer churn
Customer churn refers to the number of clients who have dropped your product or service. Also known as the attrition rate, customer churn is an indicator of overall customer satisfaction. It shows if your clients are getting the desired value from your product or if they’re satisfied with the overall performance of your onboarding program.
An effective onboarding strategy will help you reduce customer churn. A successful onboarding program helps customers get the most ROI from their investment in your product and will, in turn, reduce the churn rate. Make sure that your customer success team checks in with users from time to time, offering them free customer support and consultation calls, or sharing any new relevant information. The success of your onboarding strategy relies on it.
- Measurement: Percentage (%)
- Target value: As low as possible, a low churn rate directly correlates with high customer retention
- Measurement period: Typically measured monthly or quarterly
- Data source: Customer relationship management (CRM) system or customer management software
- How to calculate: (Total number of customers who churned during a specific period / total number of customers at the beginning of that period) x 100
5. Product adoption
Product adoption rate measures how well and how often customers are using a product or service. It’s based on a specific time frame like a month or a quarter and determines how many users have engaged with the product or feature.
This KPI determines the popularity of the service, telling you what to prioritize during the onboarding program. An early product adoption rate also indicates an effective user onboarding process.
In general, product adoption is set apart from activation. Product activation is a one-time event that shows users the value of your product for the first time. Product or feature adoption, on the other hand, happens when users completely embrace the product and it becomes their go-to problem-solving tool.
- Measurement: Percentage (%)
- Target value: Ideally high, indicating widespread use of product features
- Measurement period: Typically measured monthly or quarterly
- Data source: Usage analytics platform or feature-specific tracking tools
- How to calculate: (Total number of active customers using a specific product or feature during a specific period / the total number of signed-up customers in that same time frame) x 100
Say, for example, you have 200 new sign-ups and 85 of them started using your product regularly. That’s a product adoption rate of (85/200)x100 = 42.5%.
6. Retention rate
The customer retention rate refers to the total percentage of customers who remain with your business during a predefined period. The customer retention rate should generally be used in combination with the churn rate to fully understand what the onboarding process’s retention capability is. It can also help you determine which areas may need improvement.
It provides insights into the customer renewal rate in your organization so that you can anticipate the customer lifetime value. It also helps you take various steps to improve client retention. This can include anything from adding more features to the product or service to optimizing the onboarding process as a whole.
- Measurement: Percentage (%)
- Target value: Ideally high as it indicates customer loyalty and continued use of your product or service
- Measurement period: Typically measured monthly or annually
- Data source: CRM system or customer management software
- How to calculate: (Total number of customers retained at the end of a specified period / total number of clients at the beginning of that period) X 100
Note here that you shouldn’t factor in any new customers who signed in after the set period started. So, for example, if you’re trying to figure out the retention rate for July, you won’t include the new clients you start onboarding during that month.
7. Free-to-paid conversion rate
The free-to-paid conversion rate represents the percentage of users who go from a trial version to a paid account after the free period ends. This is a metric that many SaaS companies should consider.
By offering a free trial to a product, companies can help new users learn more about using it and how it can bring them value, without having to commit from the get-go. If they are satisfied, some free trial users might decide to make a purchase. Even if customers get to use your service for free, it doesn’t mean that they’ll be able to see the value by themselves. They need assistance from your customer success team. Interactive walkthroughs and well-designed customer training are a great way of improving the trial-to-paid conversion rate.
- Measurement: Percentage (%)
- Target value: Ideally high, indicating successful conversion of free users to paying customers
- Measurement period: Typically measured monthly or quarterly
- Data source: CRM system or customer management software
- How to calculate: (Total number of customers who convert from free to paid / total number of free trial users during the same time frame) x 100
8. Customer lifetime value (CLTV)
CLTV measures the average dollar amount a customer is likely to spend on your products or services throughout their entire life cycle with your business. One of the most important factors in a high CLTV is the onboarding experience. In general, the better the onboarding experience a customer has, the likelier they are to stay with your business long-term.
And the longer they stay, the more likely they are to spend money with your organization. For example, if a client subscribes to a six-month plan, the total lifetime of that customer at that moment is six months. The CLTV will be the amount of money you expect to make in those six months. Once you understand the type of customers that yield the highest CLTV rate, you can focus marketing and onboarding efforts toward that demographic.
- Measurement: Monetary value (currency)
- Target value: The ideal CLTV should be at least three times greater than the customer acquisition cost (CAC)
- Measurement period: Calculated over the entire customer life cycle
- Data source: CRM system, financial records, or customer management software
- How to calculate: Average purchase value x average purchase frequency x average customer lifespan
- Average purchase value = Total revenue / total number of purchases
- Average purchase frequency = Total number of purchases / total number of customers
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- Average Customer lifespan = Total sum of customer lifespans / total number of customers
Additionally, the CAC is calculated as follows: All sales and marketing costs / total number of new customers in a given period
9. Time to onboard
This KPI measures the total amount of time a new user is in the onboarding phase. This can last from several days to several months, depending on the complexity of the product or service.
As a general rule of thumb, it’s a good idea to shorten the onboarding time as much as possible without sacrificing quality. Shortening the time to onboard is a good idea, but not if it worsens customer engagement, retention, product adoption, or any other relevant metric on this list.
The ultimate objective of your customer onboarding program is to educate clients and help them obtain the most value from your product. The aim is not to get it out of the way as fast as possible.
- Measurement: Days or months, depending on the product’s complexity
- Target value: As low as possible, indicating a quick and efficient onboarding process
- Measurement period: Measured from the time of customer sign-up, throughout the onboarding phase, and up until they can use the product independently
- Data source: Learning management systems or other forms of onboarding tracking
- How to calculate: Determine the time between the customer purchase and when the onboarding process is completed
10. Number of support tickets
The number of support tickets is a KPI that shows the volume of issues or questions customers have during the onboarding process. By tracking this metric, businesses can determine the overall effectiveness of their onboarding processes and identify any areas of improvement.
The aim is to keep these support tickets at a minimum as it suggests that clients are easily navigating the onboarding process without serious difficulties.
Professional customer onboarding software solutions, like Docebo that cover all stages of the customer life cycle, help to smooth out the onboarding process, improve net promoter scores (NPS), and reduce the number of customer support requests.
- Measurement: Numeric
- Target value: As low as possible as it indicates minimal customer issues during onboarding
- Measurement period: Typically done monthly or quarterly
- Data source: Customer support ticketing system or helpdesk software
- How to calculate: Simply total the number of support tickets raised by customers during the onboarding process
Now over to you
Tracking and measuring your customer onboarding program can prove challenging. Nevertheless, it’s a small price to pay for customer satisfaction, retention, and success. Dedicated customer onboarding tools can help you deliver the most value and optimize your processes to a whole new level. Schedule a demo with Docebo today and see how easy it is to improve your customer onboarding ventures.