Onboarding Fails: Are You Losing 80% of New Users?

User onboarding can make or break your product. Shockingly, a recent study found that over 80% of users abandon an app after only using it once if the initial experience is poor. Is your onboarding process inadvertently pushing potential customers away?

## 90% of Users Feel Companies “Could Do Better” With Onboarding

According to a report by Wyzowl, a staggering 90% of users believe companies could improve their onboarding processes. That’s almost everyone. This isn’t just about nice-to-haves; it’s about meeting basic expectations. Think about that from a marketing perspective: you’re spending money to acquire users, but your onboarding is failing to convert them into active, engaged customers. I had a client last year who spent a fortune on Google Ads campaigns targeting small business owners in the Metro Atlanta area. Their signup rate was great, but their activation rate was dismal. Why? Their onboarding was a generic, one-size-fits-all approach that didn’t resonate with their target audience. The lesson? Don’t waste acquisition dollars on a leaky bucket. You can learn more about avoiding similar pitfalls in our article on landing page fails.

## Only 4% of Users Convert After a Generic Onboarding Flow

Here’s a number that should make any marketer sweat: only 4% of users convert after experiencing a generic onboarding flow. This data, highlighted in a recent industry report from IAB (Interactive Advertising Bureau) [IAB](https://www.iab.com/insights/), underscores the importance of personalization. Users expect a tailored experience, one that acknowledges their specific needs and goals. This is where segmentation comes in. Are you targeting different user personas? If so, your onboarding should reflect those differences. For example, a new user who identifies as a “marketing manager” should receive a different onboarding experience than someone who identifies as a “sales representative.” Think about the tools each role needs. The marketing manager might need to connect their HubSpot account, while the sales rep needs to integrate with Salesforce. Show them how to do that immediately.

## 68% of People Watch an Explainer Video if Available

A HubSpot Research [HubSpot Research](https://hubspot.com/marketing-statistics) study revealed that 68% of people prefer to learn about a new product or service by watching a short video. This is a massive opportunity to engage users and guide them through the initial steps. Instead of relying solely on text-heavy tutorials or lengthy documentation, consider incorporating explainer videos into your onboarding flow. Keep them concise and focused on the core value proposition of your product. I’ve found that videos work particularly well for complex features or workflows. Break down the steps into easily digestible chunks, and use visuals to illustrate key concepts. Don’t forget to add captions!

## 77% of Users Believe Onboarding Is a Key Factor in Long-Term Retention

According to research from Nielsen [Nielsen](https://www.nielsen.com/), a whopping 77% of users see onboarding as a significant factor in their decision to stick with a product long-term. This emphasizes the critical role onboarding plays in customer retention. It’s not just about getting users to sign up; it’s about setting them up for success and building a strong foundation for a lasting relationship. Think of your onboarding as the first impression – you want to make it count. This means proactively addressing potential pain points, providing ongoing support, and continuously iterating on your onboarding process based on user feedback. This is why marketing retention is so important.

## Conventional Wisdom I Disagree With: “Keep it Short and Simple”

Okay, here’s where I’m going to push back on some common advice. Everyone says “keep your onboarding short and simple.” And sure, brevity is good. But sometimes, a too short onboarding is worse than a slightly longer, more thorough one. The goal isn’t just to get them through the process; it’s to get them to understand the value of your product. I’ve seen companies strip their onboarding down so much that users are left completely clueless about how to actually use the thing.

For example, I worked with a SaaS company that offered a project management tool. They initially had a very short onboarding flow that focused solely on creating a new project. Users were able to create projects, but they didn’t understand how to add team members, assign tasks, or use the collaboration features. As a result, they quickly became frustrated and abandoned the product. We then implemented a more comprehensive onboarding flow that walked users through all of the core features and benefits. While it took a bit longer to complete, it resulted in a significant increase in user engagement and retention.

Here’s what nobody tells you: it’s better to spend more time upfront to educate users on how to maximize the value of your product.

## Case Study: Local E-Commerce Platform

Let’s consider a real-world example, a fictional e-commerce platform called “PeachStateDeals” based here in Atlanta, Georgia. PeachStateDeals focuses on connecting local artisans with customers in the metro area, specifically targeting zip codes in Buckhead, Midtown, and Decatur. If you’re a founder in Atlanta, this might resonate with you.

Initially, their onboarding flow was a standard signup form followed by a generic product tour. Their conversion rate from signup to first purchase was a dismal 8%. They decided to overhaul their onboarding based on the principles discussed above.

Here’s what they did:

• Personalized onboarding: They segmented users based on whether they were buyers or sellers. Sellers were guided through the process of setting up their online store, adding products, and connecting their bank accounts. Buyers were shown how to browse products, filter by location, and complete a purchase.
• Interactive tutorials: They created short, interactive tutorials that walked users through key features, such as setting up a delivery zone (crucial for a local business) or using the platform’s built-in marketing tools.
• In-app support: They added a live chat feature and a comprehensive knowledge base to provide users with immediate assistance.

The results were impressive. Within three months, their conversion rate from signup to first purchase increased from 8% to 22%. They also saw a significant increase in user engagement and retention.

PeachStateDeals proved that a well-designed onboarding process can be a powerful tool for driving growth and building a loyal customer base.

User onboarding isn’t just a checklist item; it’s a strategic imperative. It’s the foundation upon which you build a successful product and a thriving customer base. Don’t treat it as an afterthought. Invest the time and resources necessary to create an onboarding experience that delights your users and sets them up for long-term success. The first step? Map out your ideal user journey and identify the key moments where onboarding can make the biggest impact. Remember to also think about rethinking your user acquisition strategy.