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Estd 4.22.2023
In the competitive SaaS landscape, customer acquisition is just the beginning of the journey. What happens after a customer signs up can make or break your business. This is where onboarding comes into play, and more specifically, the onboarding completion rate—a vital metric that provides insight into how effectively your product introduces itself to new users.
What is Onboarding Completion Rate?
Onboarding completion rate measures the percentage of users who successfully complete your product's designated onboarding process. This process typically includes key actions such as:
- Creating an account
- Completing profile information
- Finishing a product tour or tutorial
- Configuring initial settings
- Reaching the first "aha moment" or value realization
The formula for calculating this metric is straightforward:
Onboarding Completion Rate = (Number of users who completed onboarding / Number of users who started onboarding) × 100For example, if 1,000 users begin your onboarding flow and 750 successfully complete it, your onboarding completion rate is 75%.
Why Onboarding Completion Rate Matters
1. Direct Impact on Revenue and Growth
According to research by Wyzowl, 63% of customers consider the onboarding experience when deciding whether to subscribe to a SaaS product. Moreover, customers who experience a poor onboarding process are three times more likely to churn within the first 90 days.
"The most crucial phase for customer retention is the first 90 days, and the onboarding experience is the foundation of that relationship," notes Lincoln Murphy, a customer success strategist.
2. Predictor of Long-term Success
Onboarding completion is strongly correlated with long-term customer success. Data from Totango shows that customers who complete onboarding have a 21% higher product adoption rate and are 12% less likely to churn within the first year compared to those who don't complete the process.
3. Indicator of Product Usability
A low completion rate often signals usability issues or value communication problems. If users abandon the onboarding process, it suggests they either:
- Found the process too complex or time-consuming
- Didn't understand the product's value proposition
- Encountered technical difficulties
- Were asked for too much information upfront
4. Efficiency of Customer Acquisition Spend
When users don't complete onboarding, much of your customer acquisition cost (CAC) is essentially wasted. According to Forrester Research, the average CAC for a SaaS company is around $1.07 for every dollar of revenue expected from that customer in the first year. A high onboarding abandonment rate dramatically reduces this return on investment.
How to Effectively Measure Onboarding Completion Rate
Define Your Onboarding Milestones Clearly
Before you can measure completion, you need to define what constitutes "complete." This varies by product, but should focus on actions that lead to initial value realization.
For example, Slack might define onboarding completion as:
- Creating a workspace
- Inviting at least one team member
- Sending the first message
- Installing the mobile app
Different SaaS products will have different milestones based on their core value proposition.
Use Cohort Analysis
Measure onboarding completion by user cohorts to identify patterns and improvement opportunities:
- Compare completion rates across different acquisition channels
- Analyze by user type (enterprise vs. SMB, role, industry)
- Track improvements after onboarding flow changes
According to research by Mixpanel, SaaS products that regularly analyze onboarding cohorts see a 25% higher completion rate on average compared to those that don't.
Track Time-to-Completion
Beyond the binary completed/not-completed measurement, track how long onboarding takes. Research by UserGuiding suggests that ideal onboarding should take no longer than 5-7 minutes for B2C applications and 10-15 minutes for B2B solutions.
If users are completing but taking too long, that's another optimization opportunity. Segment your analysis to find where users spend the most time or drop off entirely.
Implement Progressive Tracking
Don't wait until the very end to determine if onboarding was successful. Track completion rates at each step of the process to identify specific drop-off points:
Step Completion Rate = (Number of users who completed step X / Number of users who started step X) × 100For example, if you notice a 40% drop-off during the integration configuration step, that's a clear area for improvement.
Best Practices to Improve Onboarding Completion Rates
While measurement is essential, acting on that data is what drives improvement. Here are evidence-based strategies to boost your completion rates:
1. Simplify and Prioritize
Appcues research shows that reducing the number of onboarding steps by 30% can increase completion rates by up to 50%. Focus only on what's absolutely necessary for initial value realization.
2. Implement Progress Indicators
Users are 40% more likely to complete processes when they can see their progress. Clear progress bars or step indicators reduce abandonment by showing the light at the end of the tunnel.
3. Personalize the Experience
Customize onboarding based on user role, company size, or stated goals. Intercom found that personalized onboarding flows have 65% higher completion rates than generic ones.
4. Use Interactive Elements
Replace passive tutorials with interactive guidance. According to WalkMe, interactive onboarding elements increase engagement by 70% and completion rates by 35%.
5. Enable Skipping Non-Essential Steps
Allow users to skip certain steps and return later. This respects their time and allows them to reach value faster. According to UserIQ, skippable onboarding flows have 25% higher completion rates.
Conclusion
Onboarding completion rate is more than just another metric—it's a powerful indicator of your product's initial impression and long-term success potential. By carefully defining, measuring, and optimizing this rate, SaaS executives can dramatically improve customer retention, reduce acquisition waste, and accelerate growth.
In an industry where customer acquisition costs continue to rise, ensuring that acquired users become engaged customers through effective onboarding is increasingly crucial to sustainable business economics.
Remember that onboarding is not just a technical process but the beginning of the customer relationship. The care and thought you put into this experience signals to customers how you'll treat them throughout their journey with your product.
For SaaS leaders looking to improve their metrics across the board, onboarding completion rate is often the best place to start—a high-leverage point that affects virtually every downstream success metric.