9 minute read · Published April 27, 2024

How to make product-led onboarding actually work

Latest Update May 14, 2024

If you walked into a new fine-dining restaurant that’s been the talk of the town for days, where long queues have been forming outside to secure reservations – how would you feel when you manage to get in? 

Excited? Ecstatic? Like you’re about to have an experience of a lifetime?

Users who sign up for a new product kind of feel that way too. Perhaps their leaders have invested in a new platform that promises to level up the team’s sales game. Perhaps it’s an app that will keep colleagues connected even though someone works from Spain, someone lives in India and a third person is located on the shores of New Jersey. Whatever the software, it comes with a promise and a new user is excited to see that promise fulfilled. 

But just like that restaurant visit, a new user's experience can quickly turn sour if you overwhelm them with complex features or leave them fending for themselves. Imagine not getting a menu at the restaurant. Or getting a menu with a hundred options for the specials alone! No amount of soothing ambiance will help. The patron, just like a new product user, will quickly get confused or frustrated and head straight for the exit (or close button).

This is why product-led onboarding is crucial – it takes users on a journey that is meaningful to them. You've promised them change, innovation, or disruption – onboarding ensures they experience it firsthand and become the "better version" they signed up for.

Product-led onboarding vs. product-led growth – what's the connection?

There are many ways to get to the market – or in business speak, several GTM (go-to-market) motions. You can have your sales team leading the conversations with potential customers, in which case you’re invested in a sales-led GTM motion (think of traditional ways of selling). You can put your eggs in the content marketing basket (HubSpot is a great example of this), in which case you’re driving a content-led GTM motion. Or you can be a product-led growth (PLG) company and use your product itself to drive customer acquisitions. 

Image showing the different kinds of GTM motions

Product-led growth and product-led onboarding are linked – it’s the difference between a strategy and a tactic. Imagine wanting to build a city using LEGO blocks. In this case, product-led onboarding is a foundational piece of LEGO. Without it, your city risks getting wobbly and the structures you build could collapse.  

Product-led onboarding is a series of “engagements” that a PLG business sets up to help a new user get acquainted with the product. It is based on the user’s persona, their proficiency, and their priorities. This means that you’re not introducing features to users randomly. You take the time to understand how each user intends to use the product. 

Here, the selling is being done by your product, not your sales or marketing teams. Does that mean that sales and marketing becoming redundant? Absolutely not! The only change that happens is, where traditionally these teams would be interacting with customers via other channels, like in-person, or via social media, email, or YouTube ads, the marketing and sales communications in a product-led GTM motion happen within the product instead. 

A product-led GTM notion is a great choice for SaaS companies because – 

  • Users self-discover product value: It’s a great way to help customers realize the value of your product because they get inside the platform or app and experience it for themselves. Of course, this means that a customer not only needs to purchase the product but also commit to adopting and engaging with it. 
  • It reduces customer acquisition costs and promotes a wider reach: Theoretically, you can get a larger number of customers to use your product for a much lower spend. Traditional sales methods require more intensive 1:1 outreach and scalability factors end up limiting how many customers you can acquire within a given timeframe. 

The critical window of new user engagement

Leading PLG companies see an activation rate of around 33%. This means that about one-third of users of products from such companies go on to take valuable actions within the product. 

Every SaaS business will have a different way of defining an activation event. For a sales platform, this could be when a user books a meeting and blocks a calendar slot with their prospects via the platform. For a communication tool, this could be about sending that first message to a colleague. 

Once a new user signs up, a critical window of engagement opens up – you need to be able to guide the user towards that activation event, or else all your effort of building the product, selling it, and getting customers registered, will have been in vain. 

New users don’t know your product and will not take extensive trouble to get to know it any better unless you design and take them through a stellar onboarding process. This is where product-led onboarding plays a crucial role. 

The first few actions the user takes within your product can shape their entire expectation of your product. They will either start finding it useful and keep using it, or they will feel like it’s missing something, or that it's too much or too little, and not waste their time on the product anymore. 40-60% of all new users don’t bother coming back to a product the second time around. 

Neglecting onboarding can be costly – it affects customer lifetime value and could lead to churn. Yet, we often find the onboarding flow to have been designed as an afterthought. It’s almost as if the core product was given all the love but when it came to the onboarding process – it was met with a step-child treatment. 

Elements that make for a strong product-led onboarding strategy

Image showing the core elements of a product-led onboarding strategy

Always start by understanding your users from day one itself

It’s all very well to have developed the core features of your product – after all, you spend weeks or even months gathering intel on what your users need, what they love, and what they hate. But how they end up using those core features is quite a different story. 

Let’s consider the case of Canva for businesses – a popular platform for graphic designing. You’d think that when used in a professional setting, teams would make the same use of Canva – to design templates, social media posts, or even videos. However, Canva doesn’t look at it that way – and rightly so!

Image showing Canva's proposition segmented for creative teams versus sales teams

A creative team uses the platform very differently – establishing brand guidelines and maintaining brand kit, versus a salesperson who needs to be able to plug in charts and graphs and be able to easily print their brochures or pitch decks. 

Such introduction of features and workflows are very important and need to happen for new users, otherwise, you risk not being able to help the user realize what’s in the product for them.  

To do this successfully, 

  • Analyze core user actions on day one i.e., on the day they sign up, register, or interact with the interface of your platform for the first time.
  • Use the JTBD (jobs to be done) framework to understand user goals. It’s a cool way in which you frame user needs and desires with statements like “I want to…”. 
  • Take a leaf out of the product-led onboarding examples of some of the best-in-class SaaS products – all of which place a strong focus on getting to know the user and adapting the product flow to serve specific persons. 

Focus on self-serve onboarding

It is important for a new user to feel comfortable navigating through all the menus and tabs within your product. But just like if you were a stranger at a party and wouldn’t start dancing the second you stepped inside your host’s house, a new user too will not start celebrating your product’s features right away. You need to extend your hand and lead the dance. 

You can of course schedule a meeting with them and walk them through a demo, but this approach is not scalable. Also, learning by doing is always better than learning by listening. 

Product-led onboarding works better when you allow the product to be the teacher. Users can make use of self-serving onboarding resources like tooltips, product tours, in-app tutorials, progress bars, or even the welcome dashboard and messages to find their “starting point” and get to where that “aha-moment” – the moment of value realization, occurs.  

 Image showing a welcome message created using CommandBar to a first-time user

If you can invest in hosting self-serve resources like articles, videos, or even communities, you’ll find your users gaining a lot of value from educating themselves. It would make them want to stick around longer with your product because not only would your product make their lives simpler, but the resources you share with them will help them learn new stuff. 

Run experiments to uncover “activation” and “habit-building” patterns

A lot of feedback is generated from customer surveys, support tickets, and even the intel that customer-facing teams bring. This can be used to conduct A/B tests to decide where and when you should place different tactics within the product. 

For instance, say you decide to integrate tooltips as part of your product-led onboarding. The question is – when should this tooltip pop up? The first time the user lands on a specific page of the product? Sure – that way you can explain what is what on the user’s screen. 

But is that the only time to display a tooltip? How about when the user is in the middle of a task? Might it make sense to show the tooltip during their workflow? The value of the tooltip could increase when shown contextually to the user and help them understand the feature better – or it could disrupt their flow and kill their thought process! The only way to decide is by running experiments and analyzing the results. 

Make it a cross-functional effort

Product-led onboarding shouldn’t remain within the ambit of product management or product marketing teams alone. It needs to be an intentional effort across the entire business. 

Multiple departments take part in making the product successful – customer success, sales, marketing, developers, UX designers, and of course, the product folks. The customer success guys know what pains and gains the users are getting after the initial interaction with the product. This is gold for deciding what content should be a part of the onboarding process or how the flow should be designed. The sales folks understand the initial expectations and the promise the product holds for users before they start using it. It is important to align the “before” with the “after” so that the user gets what they were shown and doesn't leave disappointed. 

Making product-led onboarding everybody’s business ensures there’s a consistent messaging across all touchpoints – it’s not just the marketing campaigns and sales collaterals speaking the same language, it is also the product, its interface, even the nomenclature followed for naming all those tabs is consistent with the product’s value proposition. 

By removing friction during the onboarding process, you not only make it easy for new users to get to know the product, but you also increase the chances of them continuously engaging with the product and turning into long-term, satisfied customers – the dream of every SaaS business. 

Lead with product-led onboarding

First impressions matter everywhere – even in software! No matter the kind of industry you serve or the knowledge level of your users, the onboarding flow can spell the difference between an expedited time-to-value or churn. There is only that small window of opportunity after the first sign-up when you can hook the user, or else they may never come back for the second time (no matter how many follow-up emails you send). 

Companies that have a product capable of delivering value without the need for a high-touch customer experience do well with a product-led onboarding process. Everything from understanding your user’s goals, how they intend to use the product, and what kind of ecosystem they work in – can (and should) be captured during the first interaction with the product. This sets the stage for not only guiding users to the features that are most relevant to them but also personalizes the platform and its use cases on a more specific, segment level. 

By creating a self-guided experience you can help users get to the activation event faster – helping them feel a sense of accomplishment, even pride. This is ultimately what will drive their continuous appetite for your product and increase the lifetime value of your customers. 

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