Many people use the terms "user onboarding" and "customer onboarding" interchangeably, but there are crucial differences between these two experiences. Understanding them can help you build compelling onboarding experiences for both groups. 

In the SaaS space, individuals no longer have to wait behind a paywall to try out a product; the "try before you buy" option is both prevalent and expected. Plus, more companies are operating with a product-led approach, leading their sales cycle with a free trial or freemium subscription to showcase their value and encourage users to convert to paying customers. 

However, some businesses mistakenly treat these free trial users as customers from the get-go. But users are not customers, at least not yet. 

In the fast-paced, competitive world of SaaS, users can try and leave products without a second thought since the next product alternative is just a click away. Companies must implement firm strategies to engage users and convert them to paying customers to stay in business. 

And the best way to acquire customers from free trials? A seamless onboarding flow. Onboarding is the most vital part of the customer journey, but many companies fall flat when segmenting users and customers. 

In this post, we'll cover: 

  • The difference between users and customers

  • User onboarding vs. customer onboarding

  • Which one will you need? 

What's the difference between a user and a customer?

It's crucial to distinguish between users and customers to ensure great customer experience (CX.) 

Who is a user?

A user often wants to try the most basic function of a product to achieve a specific outcome. They are on the hunt for a solution that helps them solve their immediate problem. 

The term "user" has various definitions; a user could be anyone from a quick visit to a prospective customer. 

As previously mentioned, most SaaS products offer free trials. After signing up for the trial, the individual starts a user onboarding flow. They're using the product but aren't paying for it yet; hence, they're users, not customers. 

Who is a customer?

A customer buys or pays for the product. They understand the product's intrinsic value and are sold on the benefits a product can deliver. 

In the SaaS industry, free trial users become customers after experiencing the value promised by the product. Customers want to glean the maximum benefit from the product and avoid friction as they use it. 

After the financial transaction, the customer wants to unleash the product's full power, and it's up to you to exceed their expectations. They require consistent guidance in the customer journey, and teams should focus on driving them toward success at every touchpoint. 

User onboarding vs. customer onboarding

SaaS onboarding is essential in assisting both users and customers in getting value from a product, but onboarding them the same way could be a colossal mistake. For the most part, SaaS users and customers are different groups of people with varied needs and expectations. 

Users typically don't have the time, energy, or motivation to learn everything about a product, while customers are much more likely to be invested. Increased investment and motivation come with higher expectations, of course, so it's important to consider these differences so you can design onboarding processes based on who it's for. 

What is user onboarding?

User onboarding focuses on helping users experience their aha moment quickly with little to no friction. Essentially, user onboarding is functional and is designed to help people understand how to use a product at its most basic level. Content types such as interactive product walkthroughs, product tours, tooltips, and FAQ articles can help users complete key actions. 

The key to effective user onboarding is to keep it simple. Let users find value in the quickest, smoothest way you can; user onboarding should help users find value with the least effort. 

What is customer onboarding?

Customer onboarding is more relational than user onboarding; it requires nurturing customers to help them see the value their payment is unleashing for them. Create customer onboarding flows for various customers by tailoring the experience to what they need to find value in a product. You can do this through product demos, tutorial content, helpful integrations and implementations, and more. 

As you can assume, SaaS customer onboarding can be much more rigorous and hands-on, requiring a collaborative and communicative approach between the company and the customer. Customer onboarding continues long after customers pay for the first time; you need to keep engaging and providing value to them to ensure they don't switch over to a competitor. When onboarding customers, the key goals are to improve retention and conversion rates while decreasing churn. 

The goals for user and customer onboarding

Users and customers have something in common: the onboarding process can make or break their decision to continue with a product. 

With user onboarding, the most crucial goal should be to increase engagement for users and lead them farther along their journey within the product. This is why product teams usually handle user onboarding. 

The goal of customer onboarding is to ensure all users within the customer's organization have whatever they need to realize value from the product. The responsibility of customer onboarding falls on multiple teams across the company (onboarding specialists, customer success, account management, etc.), given the relational aspect of the process. It's their task to shorten time-to-value and encourage adoption so that customers can realize value from the product. 

Conclusion: Which onboarding type will you need?  

Onboarding is vital for users and customers; both are about gaining an audience and their loyalty. But what you're building and your product goals determine which onboarding flow to use. 

Remember, user and customer onboarding are very similar to managing real-life relationships; you don't speak to strangers like they're close friends. If you evaluate your users and customers, understand their differences, and design for their needs, you're more likely to bridge the user-to-customer conversion gap effectively. That way, you'll encourage many more users to become customers, and you'll be able to retain those customers longer. 

Lou offers code-free, beautifully designed user onboarding software that helps you create onboarding flows for both customers and users in minutes. Start for free today.

Published on September 26th, 2022