User Ownership is the Secret Sauce to Onboarding

New users can often struggle to grasp the full value of your SaaS platform during the onboarding phase. It can be frustrating as a Customer Onboarding Manager or CSM when your customer is not as invested as you are at the beginning. They are yet to see results. This can lead to a lack of urgency, slow adoption, and potential churn.

But did you know that customers are more likely to stick around your platform if they feel a sense of ownership?

This week we're going to look at The Endowment Effect and a 5-step project to increase user investment during onboarding.

Let’s dive in.

🧠 The Theory: The Endowment Effect

Coined by economist and behavioural science professor Richard Thaler in the 80s, the endowment effect describes our tendency to value things we own more than things we don't. This applies even to something with little monetary value, which suggests the focus is on a sense of ownership and attachment.

The key takeaway? People value things that they have invested time and effort in.

👀 The Example: Netflix

Currently, Netflix keeps your viewing activity for 10 months after you cancel your subscription. If you don't subscribe again within that timeframe your recommendations and preferences will be lost. Netflix makes this clear to users when they cancel.

People spend hours upon hours curating a bespoke experience throughout their subscription. The effort invested in personalising the service creates an important sense of ownership that Netflix exploits. You won’t just be giving up a generic streaming service if you don’t return, you’ll be giving up a custom made experience that you spent time and effort creating. It would probably just be easier to sign up again, right?

🤓 The Project: Milestone Reminders

Let’s use this idea from social psychology to create a relevant project within onboarding. You can implement this however you choose.

Step 1: Identify Key Actions

Identify and document the actions that demonstrate early engagement and investment in your platform. You can record these in a CS platform or in a document. These key actions need to be specific to your product and to the goals of your customers. Start with about 5-10 actions. You can always add more later as you develop this process out.

Examples:

Step 2: Track Milestones

Figure out how to monitor user behaviour on your platform. Track when the milestones you have identified have been achieved. Don't worry if you don't have software for this. In my early days at a startup I used a spreadsheet to track the milestones. I went into customer accounts to visually see what had been achieved. Later on, I utilised Intercom for usage data to power my messaging. It's great if you have software for tracking user behaviour but it's not essential to get started.

Step 3: Personalise Messaging

Create personalised messages that remind users of their success. You can manually write and send these messages to customers at first. It will strengthen your understanding of their progress. It will also highlight what works and what doesn't before you spend time and resource on automation. Don't shy away from using these personalised messages on calls with customers. It will lead to valuable conversations.

Examples:

Step 4: Highlight Future Benefits

Use the achievement reminders to showcase how further exploration will unlock even greater value. This is your opportunity to talk about other features. Try to steer clear of any direct talk of upgrades at this stage. Keep the focus on adoption and the potential value already included in their plan.

Examples:

Step 5: Guide Exploration

Make suggestions for next steps within the messaging. You want to guide users towards exploring features that align with their specific goals and compound the value they are seeing. Timing is important here. Too many features at once can be overwhelming. A feature at the wrong time can create apathy. The right feature at the right time creates easy progression for the customer. Consider your ideal customer journey before directing them to additional features.

Examples:

The Analysis: Make It Sticky

In the same way that people create a unique and personal Netflix account, focus your users on creating their custom experience within your software. Create a sense of investment by reminding users of their progress. Showcase the potential to unlock even greater value through further exploration of your platform. Users will be encouraged to feel a stronger attachment to the platform and its capabilities, leading to:

• Faster feature adoption

• Increased overall product knowledge

• Stronger foundations for long-term customer success

Have fun and experiment with this project. Make it work for you. Share with your colleagues and get the discussions flowing.

That's it for this week. See you next Thursday.

Clare

👀 Find me on LinkedIn here.

Reply to this newsletter with any questions, additional ideas, or findings from your experiments. I’d love to hear from you.