Are you onboarding active users or successful customers?

When you optimize onboarding for success, it doesn’t matter how many people come in through the top of the funnel. Successful outcomes make the difference between users and customers—and between churn and revenue growth.

Shareil Nariman

October 24, 2022

4 minutes

When you see high churn rates, what do you do? Most companies scramble to pour more money into marketing and sales in the hopes of making up for the loss with new customers. But instead of a revenue boost, all they get is more churn. This approach is doomed to failure because it focuses on the wrong thing. You don’t need more customers. You need more successful customers.

What’s the difference? Onboarding that’s optimized for outcomes—not user numbers.

Product onboarding vs. customer onboarding

Here’s the first question you should address in onboarding: do the problems a customer wants to solve match what you’re good at solving? If you can’t confidently say—and demonstrate—that your product provides the desired outcomes, then that customer is already on the path to churning. They might get through the initial onboarding and use your product for a while. They might even be active for a month or two. But being onboarded as a product user isn’t the same as being onboarded as a customer. Product users rarely generate revenue because they don’t see how spending time in the app can move them toward their goals. To turn them into customers whose contracts grow over time, you need to design onboarding as a path that leads them where they want to go.

Churn is good (sometimes)

It isn’t always possible to create that path. Not all leads are good fits for your product, and trying to retain the ones that aren’t is a waste of your money and their time.

Done right, onboarding generates objections that help you identify and address churn risks early on. Some people will realize that your tool doesn’t actually do what they want it to, and they need to try other solutions.

Let them go. They might come back to you in the future, or they might not. But they’re more likely to come back if they have a positive, no-pressure experience that leaves them feeling like you care about their success whether or not they choose your product.

Filtering out unqualified leads frees you to focus on those who will become long-term customers. It gives you the time and resources to nurture people through onboarding and into the early days of adoption. And it helps you to focus on growth instead of obsessing over retention.

Customer growth—not user numbers—leads to revenue growth. Invest in customer success to realize that growth. Provide moments of value realization during the onboarding process to give them a vision for how they can move forward.

Active users aren’t always customers

Valuable interactions are what separates users from customers. Users interact with your product; customers experience a connection between in-app actions and their desired outcomes. If they’re not seeing those outcomes, they’re a churn risk.

This is true even after users pass from onboarding to adoption. Everything might look great from the metrics: they log in consistently, complete tasks, and go through workflows. They may even spend more than the average amount of time using the app. But activity doesn’t equal outcomes. You have no way of knowing what those “active users” are accomplishing—or if they’re accomplishing anything at all.

Unless activity has meaning beyond metrics, it will be hard to convince users to renew. Your “active user base” could turn out to be a massive churn problem and send you spiraling into panicked reactivity on the marketing and sales end all over again.

Or you could invest in onboarding that provides ongoing support. As customers start incorporating your tool into daily work, they’ll encounter features or tools they need help figuring out. Offer them a knowledge base of articles, videos, and recorded webinars—or the option to hop on a call with a CS agent—to direct them toward the outcomes they want. Customer success is the true revenue driver It doesn’t matter whether you’re dealing with an SMB or an enterprise: getting customers to their outcomes should always be the goal. Successful customers keep the flywheel going—and your business sustainable.

You can only put so much money into generating leads and funneling users through your pipeline before revenue takes a hit. And if those users churn after a few months, you lose years of potential contract growth—which could amount to millions in profits you’ll never see.

What would happen if you focused on optimizing onboarding for success and building your CS team to nurture the customers you already have?

You could get more revenue from fewer customers.

Customers who grow bring in more than the original value of their contracts over time. Nurturing to success prevents them from getting stuck in onboarding or becoming just another set of metrics that look good on paper but mean nothing for revenue. The customer who sees value during onboarding has the potential to become the customer who moves to a higher-paid tier within 30 days instead of six months or a year.

Compare that to bringing in a fixed amount of revenue per customer and seeing most of them churn or downgrade. You do the math—it’s a huge difference.

Onboarding is your revenue superpower

When you optimize onboarding for success, it doesn’t matter how many people come in through the top of the funnel. Successful outcomes make the difference between users and customers—and between churn and revenue growth.

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