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Signs Your SaaS Onboarding Is Not Working

Usha Vadapalli
September 7, 2023

Ever tried putting together furniture with a vague instruction manual? You are excited about your purchase, but frustration kicks in as you struggle to make sense of the scattered pieces.

Now picture the same frustration your customer might be experiencing. You might have developed a groundbreaking SaaS product. And, despite your best efforts, your conversion rates are stubbornly low. If this sounds all too familiar, it is time to take a hard long look at your product onboarding.

Recognizing the signs of ineffective onboarding in SaaS is the first step to optimizing for success. If you have a process in place, auditing your current product onboarding journey is a great place to start.

It took us some time but we, at, audited our onboarding journey and made some big changes. We migrated to a product-activity based onboarding flow and this is how our customer onboarding journey looks like now.

Is Your SaaS Onboarding Off Course?

How do you know if your product onboarding is the real culprit behind poor conversions and lackluster engagement? Here are some red flags to watch out for:

High abandonment rates during or after signup:

If users abandon the signup process, it suggests that barriers or excessive requirements hinder their progression.

If they sign up and never return after the initial interaction you need to dig in more to analyze user behavior during the onboarding steps. Users are likely not finding value or struggling to understand how to achieve their goals using your product.

Low user activation and engagement:

A low activation rate indicates that users are not successfully onboarded to the core features and benefits of your product. Users may fail to grasp how to navigate or utilize the key functionalities, resulting in limited engagement.

When users sign up but fail to engage or return to your product, it indicates a disconnect between their expectations and the value delivered. Watch out for signs of minimal adoption and engagement of specific features to zero in on the areas that might be complex for your users to adopt.

Limited conversion to paid accounts:

This is a huge warning signal going off. A poor conversion rate can be due to many reasons and you might as well start from the beginning - your product’s first impression on a potential customer.  

If a significant number of users do not upgrade to paid accounts, it may signify a lack of clarity or understanding regarding the value of premium features. Evaluate your onboarding process to ensure it effectively showcases the value for the product users and buyers, including the onboarding communications.

Rising customer acquisition cost (CAC):

An increasing CAC can indicate a subpar onboarding experience that fails to engage and retain users. Low user satisfaction and the absence of organic referrals could mean high costs to continue acquiring new users.

High churn after initial purchase:

When customers churn shortly after making their first payment, it suggests a failure to maintain their interest and deliver ongoing value.

Be on the lookout for increased support requests, minimal usage or progression to premium features after the initial upgrade, underutilized resources (tutorials, in-app guides, etc.), and unresponsiveness to CSM.

Do some or all of these red flags sound familiar?

Depending on your business, product-led or not, you can keep track of onboarding metrics that directly influence the aforementioned signs. Figure out the metrics that matter to your unique product and business model and track those product events.

Remember, these signals are not just red flags – they're roadmaps to improvement. If you are designing an onboarding experience from scratch, it’s useful to have these points at the back of your mind as you build and launch.

I’ll leave you with this thought: The biggest red flag of all is not having onboarding metrics to track and the lack of constant optimization.

If you are thinking about revamping your product onboarding, grab a 1:1 with our expert for a free onboarding consultation.

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