The future of onboarding and retention in product-led Companies
Written by
Lakshmi Gandham

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The future of onboarding and retention in product-led Companies

Published : September 2, 2021

When users are impulsive and easily distracted, your product must be simple, fast, and[G1]  intuitive. 

What are some of the strategies companies can employ to capture users’ attention and keep it? At Netcore Cloud’s Martech Mashup 3.0, Akhil Sharma, Head of Product at GoJek, Siva Teja, Sales Manager, Appsflyer, Vaibhav Padilkar, Chief Business Officer at IntrCity, and Nikhil Naik, OTT Product Expert shared their thoughts.

Customer onboarding is the nurturing process whereby a new customer-first experiences the product and gets familiar with it. Unfortunately, in contrast to its more glamorous cousin, advertising, onboarding does not receive the same level of attention and care. Onboarding begins with advertising since the product must deliver on the promises implicitly or explicitly made in marketing communications immediately upon acquisition.

The onboarding process sets the tone for the relationship between the product and the customer. When the onboarding is smooth and delightful, the customer’s purchase decision is validated. This helps drive engagement, retention and inhibit churn.

Therefore, product managers must consider some key factors when evaluating or building a product.

First impressions matter

Firstly, the user must easily and quickly identify the product USP and the feature set for which he downloaded the app on downloading the app. This should be closely followed by the aha moment or emotional reward, which is the glue that leads to stickiness. These create an onboarding experience that drives engagement and retention.

Different merchants have different needs. The motivations of the users, why they use your app need to be identified. Priming the user is therefore essential. The value proposition needs to be stated upfront. The process starts at the app store. Onboarding is the first step in the engagement journey. This is where you cue the user and set him up for success. The idea is to give the user what is needed and get personalized inputs to improve his experience with targeted workflows.

  • Onboarding from the first touchpoint

Consider Spotify, which has succeeded in this regard. Onboarding begins at the app store itself, with cues based on what’s available, such as music, podcasts, etc. This creates a strong value proposition. Users can select their music types quickly and get a personalized experience right away. An appealing layout, images, and other elements make a strong connection with the viewer. As the customer journey continues, so does the onboarding.

Apartment List, a US-based marketplace for apartment listings, is another example of how engagement can begin on Day One. Once the app opens, it asks for some basic details, and the experience is personalized. User information from the web is automatically loaded into the app. By doing this, a seamless web-to-app experience is created, driving higher engagement from day one and a higher lifetime value.

Users are acquired through organic, inorganic, and referral channels. Accordingly, the onboarding experience needs to be designed customized to each channel.

  • Understanding user motivations

There has to be a balance between what the company needs from the user and what the user is trying to accomplish when using the product. Even before the user experiences the product through onboarding, certain details are already known because of the acquisition channel. Continually asking the same questions makes the user’s cognitive load heavier since the answers have already been inferred.

The acquisition channel helps reduce the cognitive load and makes the onboarding process easy. It helps understand user intent. For example, if HBO had run an ad before a Game of Thrones show, and a user was acquired through the ad, HBO would know that the user had clicked on the ad. So instead of showing him a random onboarding page, it can show him a page specific to that episode to engage the user better. Because of that, even if it had asked him a couple more questions, he would be onboard. Onboarding plays a role in priming the user.

When designing channel-specific onboarding experiences, there are a few tools. Deep-linking and Urchin Tracking Module (UTM) are among these. Any link that directs a user past a website’s home page to content within the website or application is a deep link, while UTM is snippets of code attached to the end of a URL and are used to measure the effectiveness of digital marketing campaigns. These tools help connect the web to the app.

Travel app IntrCity uses channel-specific onboarding to convert web users to app users. The site knows the context of the user who lands on it. Take someone going from Delhi to Lucknow as an example. The page opens as a result. When the user opens the app, the same details appear, making it seamless.

  • Onboarding using psychology

A super-app ecosystem like Gojek must identify what each user will be doing and what their motivations are. The users must be kept informed regularly about what promotions are relevant at any given time and educated about features that would make their journey more convenient.

Human psychology, cognitive bias, and behavioral sciences are key elements in the onboarding process. Cognitive biases are errors in the way humans think that end up impacting decision-making. Product and growth teams have been exploiting cognitive biases, and building onboarding flows around them. A key question they grapple with is working with cognitive biases when designing a new onboarding experience.

Understanding the users’ intentions and then asking them to personalize the product will make them feel more connected. Because of the user’s investment in the product, a commitment bias is created, as the user has made conscious choices and will want to justify those choices. This is one example of how psychology can be used in onboarding.

It is not as if onboarding happens only at the beginning of the journey. Users are also onboarded to new features. You can give users the product for free to begin with, but after a while, try to nudge them to use more features by paying for the product. While this may be risky as there is no commitment bias and people may de-value the product because it is free, you could upsell by onboarding users to better features.

Bias is also used in pricing, where the first price you see anchors you to the product. Every time Apple launches an iPhone, it is priced at $699. This anchors the user. The next model is $899, so the user feels it is just $200 more. Apple does not say $900.

This brings up retention. How can metrics such as Net Promoter Score (NPS) and C-SAT gauge the success of onboarding? It is crucial to understand whether users are regularly engaged. The importance of seeing if a consumer has returned to buy another product is important for apps like Gojek and travel aggregator Expedia. It may not result in a transaction, but whether they return regularly and check out the product’s pages is something to consider.

  • Enabling value discovery

In the very first transaction, it is important to give value. Your users will recall you if you save them money or time. It is not just about looking at one or two metrics. Regardless of the metric used, listening to customers and showing empathy is the most important thing.

Understanding the metric that will deliver the greatest value to the user is essential. Subscriptions may be a music app’s most important metric, but one must identify the key metrics to encourage users to sign up. Is it songs added to a playlist or language selection? Before the subscription, these steps may be among the most important. Are users uninstalling because they cannot find their content? The discovery of value must happen early, at the top of the funnel.

Identifying and focusing on the lead indicators is also essential. As an example, you may find that you have to ensure that the user visits your platform on at least three of the first 30 days, spends at least 30 minutes in the first week, and samples a minimum of 10 shows.

To sum up

Depending on which study you believe in, acquiring a new customer can be anywhere between five to 25 times more expensive than retaining an existing customer. Regaining a lost customer would be even more costly. In contrast, retaining customers by 5% can increase profits by 25% – 95%. For achieving one’s business goals, a thorough, scientific onboarding and retention program is crucial. Else, we would be leaving money on the table.

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Written By: Lakshmi Gandham