Companies that effectively onboard users into their software products are four times more likely to outperform their competitors in terms of profitability and growth, according to a recent survey by Raleigh-based Pendo.
The survey of nearly 150 software companies concluded that user onboarding can be a significant competitive advantage, increasing customer satisfaction, reducing customer churn and cutting the number of support requests.
The survey showed that companies need to invest in the onboarding practice to show better results. Companies that excel at onboarding were more likely to allocate greater resources across the company to onboarding initiatives, use multiple channels to deliver onboarding content, and use in-app guidance as one of their primary onboarding channels.
“The importance of effective onboarding cannot be overstated in today’s competitive environment where companies can succeed or fail based on their ability to engage users quickly and deliver a great product experience,” said Todd Olson, CEO and founder of Pendo. “Effective onboarding can help accelerate customer time to value. It delivers more than user satisfaction – it delivers business outcomes.”
Onboarding, however, is not universally adopted. According to the survey, 33 percent of respondents indicated they don’t deliver any onboarding as part of their initial product experience. Far more companies supplying B2B software (57 percent) and consumer software (48 percent) delivered a user onboarding experience than eCommerce companies (29 percent).
A majority of respondents reported that their onboarding programs were not particularly effective (66 percent).
Although most of the companies in the survey had some sort of onboarding program, a much smaller percentage tailored the experience for different user segments (40 percent). Tailored onboarding can make an impact. On average, 70 percent of users dismiss onboarding walkthroughs right away, but if content is more relevant to users’ specific needs they are much more likely to engage with it.
The survey respondents consisted of a wide range of job titles: The biggest group work in customer success and support roles, while others work on products, engineering, customer training or sales. Company size varied fairly evenly from small to large enterprises in both B2B and B2C markets. Of the respondents, just over a third reported having “effective” onboarding programs that regularly met their objectives.
The effective group was four times more likely to report higher profitability and just under four times more likely to report faster growth.
“Clearly, many companies aren’t there yet, when it comes to really focusing on user onboarding,” Olson said. “To really begin building an effective program, companies need to make a series of moves, starting with understanding and measuring their current onboarding experience, bringing product resources to the table and expanding the channel mix of onboarding initiatives.”
Pendo sells a data-driven platform that it says helps companies deliver great software product experiences. Pendo was founded in 2013 by former product managers that have experienced the joys and challenges of creating great products at companies like Rally, Google, Cisco, and Red Hat, among others.
