Optimize new user onboarding

The goal of an ideal funnel analysis is to gain a complete understanding of:

• Where is the constraint?
• Who are the user segments?
• What are the contributing factors?
• How much does the constraint impact growth?

The standard funnel analysis, though useful for pinpointing major conversion pitfalls, typically focuses on snapshots in time and simple conversion rates without getting into the depth required to diagnose product health.

For example, a B2C ecommerce company using standard funnel analysis to measure user sign-ups, product views, and transactions might overlook crucial nuances in user retention and long-term value creation. A key limitation in standard funnel analysis is that high conversion rates alone don't necessarily equate to sustained user value if there are underlying retention issues.

Moreover, traditional funnels, often a snapshot in time, don't capture the evolving trends in conversion rates across cohorts. This static analysis fails to leverage the most valuable industry benchmark: our own internal, relative performance comparisons between different cohorts.

Finally, conventional funnel analysis might not accurately reflect a product's overall success. Products with lower activation rates might still have segments with high retention rates that derive significant value from the product in unique ways, providing critical insights for strategic realignment or repositioning.

The first component of ideal funnel analysis is to close the retention loop by redefining the ideal Activation Funnel user journey steps to those that correlate with stabilized, long-term retention.

In this unit, we start by introducing a critical metric that many consumer subscription businesses overlook and under optimize: the percentage of users who view your paywall at least once. Next we discuss how to optimize paywall placement to boost this metric, which is highly correlated with subscriber conversion. Then we highlight tips for refining visuals and copy on your paywall to make your premium product offering as compelling as possible. Finally, we discuss how to build a system for A/B testing and iterating on your paywall to accelerate subscriber growth.

In this unit, we start by explaining the importance of focusing your onboarding experience on the primary value prop identified by the Product/Market Fit Survey. We then introduce the Psych Framework and discuss how to calculate a Psych Score that measures the motivation of new users throughout your new user onboarding flow. Next, we review how to define and measure an activation metric to gauge when new users have taken the action(s) necessary to reach the “Aha Moment” where they understand why your product is valuable for them. Finally, we identify a set of common tactics that consumer subscription apps can use to maximize activation rates.

The PLG buyer acquisition process works to acquire and activate high-intent, relevant users or teams whose product usage can dictate when it might be time to attach a buyer.

Acquiring the right buyers is crucial for monetizing your product. However, it is often challenging with long lead times.

The timing and method of engaging buyers significantly impacts the buying process. Engaging too early or too late can lead to missed opportunities, while the wrong approach can alienate buyers.

This guide will help you identify when to engage buyers and how to effectively engage them.

Successful PLG companies understand that products can play a key role in creating visibility around the types of personas that are most likely to get through activation and receive immediate value from their usage.

Having this information is critical, since it helps marketing teams determine the right users to target, and sets them up to succeed when it comes to determining the channel strategy and messaging.

But it’s not as simple as looking at the first users activated and working backward to find patterns in who these people are. PLG persona work needs to originate in the product, and marketing should develop the messaging and channel strategy.

The most successful PLG companies build a playbook for successful team acquisition before focusing on expansion.

These companies set up systems to measure channel attribution and payback period before tuning their channel and loop strategies to optimize around acquisition.

In this guide, we’ll teach you how to build your own team acquisition playbook.

Oftentimes, PLG acquisition is considered to be synonymous with viral acquisition, a common B2C strategy in which existing users act as the primary channel for acquiring additional ones.

But content can be a powerful tool for driving PLG acquisition.

The two most common types are content loops: user generated-company distributed (UG-CD) and company generated-company distributed (CG-CD).

While these are both tried and tested approaches, more innovative PLG companies have started leveraging product-assisted, company-distributed content (PA-CD loops).

Overview

In a Product-Led Growth (PLG) strategy, successful monetization is the ultimate goal. But before an account or team is ready to monetize, it must first be activated.

Defining activation involves defining three distinct moments in a user's journey:

• The setup moment: when the user has completed all necessary activities to experience the product's core value
• The aha moment: when they experience this value for the first time.
• The habit moment: when they establish a regular usage pattern, indicating they understand the product's value.

In a PLG context, it's essential to focus activation metrics at the team level rather than the individual level.

This provides better insight into how teams within an enterprise are activating with your product.

The setup moment is when the user has done the actions to set up the core value prop. This means the following has happened:

• They've answered the information
• You've collected the information
• You’ve performed actions that give them a high probability at experiencing the value prop for the first time

To ensure a smooth transition from the aha moment to the habit moment, you must identify the must-haves during the setup moment.

The habit moment is where the user has established a habit around the core value proposition. A habit implies that they've taken the action a repeated number of times within a certain time period. The amount of time it takes to build a habit varies depending on the product, the complexity of the habit, and the individual person.

When designing a good activation experience, we need to start with the end (the engaged state) and work our way backward through activation, deconstructing it step-by-step.

Developing a habit with your product is the last step a user takes when they activate your product after signing up, setting up, and experiencing the Aha Moment. It’s a necessary pre-requisite to continued engagement.

Defining the habit moment requires both a qualitative view of what the user is experiencing as well as a quantitative metric that signals a user has experienced that moment.

Activation is a critical but often overlooked part of retaining users. It describes the phase of the user journey after the user signs up and starts to actually use and establish routines with your product. Many companies invest a ton of time and money in user acquisition, as well as in developing a phenomenal product that customers will value once they establish a habit. Far fewer companies spend the time guiding users to actually establish that habit with their product, even though activation touches 100% of users and plays a big role in continued engagement.

To improve user activation for your product and ensure more users develop a real, lasting habit with your product, we must evaluate three key activation moments: the setup moment, the aha moment, and the habit moment. To define each of these, we start with the habit moment and work backward.