SaaS businesses have no shortage of product metrics to track. However, when it comes to the crunch, monthly recurring revenue (MRR) is what really matters. While MRR is a simple concept, increasing it is anything but straightforward. Instead, product managers need to employ a blend of different approaches, including proven psychological principles.
One thing is for sure: Great onboarding experiences help SaaS teams win and retain customers, which translates directly into increased MRR. So, if you want to drive your revenues, you need to consider the psychology of onboarding and the seven rock-solid principles.
.jpg) |
| Image by freepik |
Let’s take a look at each principle and how you can apply them to your onboarding flows.
7 principles of UX psychology
Here are the seven psychological principles that can boost your onboarding. They provide a great blend of common sense and more advanced ideas that can inform the way you engage your users.
#1. Cognitive Load Theory
John Sweller developed the Cognitive Load Theory (CLT) in the late 1980s. The theory suggests that our working memory—the ability to temporarily store and manipulate information to perform tasks—can only process a relatively small number of individual items or chunks at a time.
Furthermore, as some theorists suggest, we can only hold this information in our working memory for a short time, such as 2 to 3 seconds.
CLT has serious implications for onboarding. Our cognitive limitations dictate how onboarding content should be designed, especially if we want to make the learning process efficient and memorable.
Advantages of overcoming cognitive load in SaaS onboarding
Onboarding experiences that consider CLT can positively impact your product in several ways.
Reduce customer churn by making products easier to understand and adopt.
Better customer experiences because users are armed with the knowledge they need to achieve product goals.
Smooth onboarding can increase sales and conversions because users aren’t overwhelmed by the product and are instead focused on how it can help them reach their goals.
CLT onboarding example
Canva has great user onboarding that really helps users get the most out of the product straight away. The product is aimed at people who want to make great graphic design but lack the skills and knowledge to do so with traditional products.
A big part of the Canva onboarding involves teaching users how to work with their outstanding set of templates. This removes the cognitive load of having to make a design from scratch and helps the users get right down to business. As they work with the templates, they learn about product features and the capabilities of the product, making them more likely to become loyal users.
#2. Peak-End Rule
The Peak-End Rule is an interesting psychological principle that suggests people judge an experience by how they feel during the most intense moment (the peak) and at the end. In the context of SaaS onboarding, this principle can tell us a lot about how to structure your onboarding experiences so that they leave the user satisfied and motivated.
Where possible, SaaS onboarding should follow a narrative or storytelling structure. Hook the user in at the start, deliver interest during the midpoint, and finish strong. If you’re not sure how to do it, think about your user as someone who needs to achieve a goal. Then, consider what information they need about your product to achieve that objective. That’s precisely the type of material that will make up your onboarding content.
Advantages of using the Peak-End Rule
User engagement is significantly affected if your onboarding includes memorable moments and a satisfying ending.
Creating positive moments helps improve the perception and overall feeling of your brand among users.
Getting off on the right foot ensures users are happy, which helps reduce the early churn rates that can hurt SaaS products.
Peak-End Rule onboarding examples
HubSpot are masters at knowing what users want. They use the Peak-End Rule throughout their onboarding process by using pop-ups to congratulate users on completing each step of their onboarding checklists. This choice helps reinforce progress and provide encouragement as they funnel users towards learning something tangible about the product. In other words, it's a classic Peak-End Rule.
#3. Primacy Effect
While the Peak-End Rule is what influences how people feel about your onboarding experiences, you can’t ignore first impressions. Indeed, the start of your onboarding flows is a great opportunity to grab your user’s attention right out of the gate. Once you’ve done that, you can start to apply some of the other psychological principles to ensure your users complete your onboarding flows and reach their aha moment.
Advantages of observing the Primacy Effect
If your users’ early experiences with your app are user-friendly or personalized, you can drive far better retention rates because the value of your product will be immediate from these early interactions.
The Primacy Effect allows you to focus on the user’s preferences and standards. When you meet them early via tailored onboarding experiences, it’s a sure sign that your app is a good fit for your target demographic, which can help with user satisfaction, conversions, and the overall perception of your app.
Standing out in a crowded market is a big challenge. Making an excellent first impression is a competitive advantage that you can build on during the later stages of your onboarding flow.
Primacy Effect onboarding example
Spotify has great onboarding. When users sign up for the app, the Swedish giant gets straight to work to ensure their app starts delivering on its promise straight away by prompting users to select their favorite music genres and artists.
With so many songs and artists on the app, it’s easy for users to feel lost and overwhelmed. However, by nudging users to add the music they love, they start building toward the app’s biggest strength: personalized recommendations that actually feel personal!
#4. The Mere-Exposure Effect
The Mere-Exposure Effect is exactly what it sounds like. In essence, it’s a psychological phenomenon where people tend to develop a preference for things simply because they are familiar with them. In other words, repeatedly being exposed to a particular stimulus increases how much a user likes something.
We can see the Mere-Exposure Effect play out in various ways in our daily lives. For example, repeated interactions with brands, foods, and even people can be enough to drive affinity and loyalty.
In SaaS onboarding, understanding the Mere-Exposure Effect is crucial because it can significantly influence user behavior and adoption rates. If you get your onboarding right, you can produce content that feels familiar to your users, driving trust and engagement.
Advantages of observing the Mere-Exposure Effect
By creating a familiar and comfortable onboarding experience, users are more likely to quickly adopt and engage with the product. Anything that accelerates adoption is a positive thing.
There is a lot of information for users to take in during the onboarding process. Leveraging the Mere-Exposure Effect helps ease some of that cognitive load by gradually introducing elements to allow users to get comfortable in their surroundings.
As users become increasingly familiar with the product through strategic exposure, they can develop a stronger preference for it. This scenario can result in higher satisfaction and even long-term loyalty.
Mere-Exposure Effect onboarding example
There are many ways to implement the principles of Mere-Exposure in your onboarding. One of the best methods to use this effect is found in the content management platform StoryChief. When users first fire up the app, they are met with a product tour that helps acclimate the user with the UI.
Establishing how the interface works creates a foundation upon which StoryChief adds a checklist that pushes users toward activation. The idea here is that users have some familiarity with how to work with the interface, which is bolstered by engaging with the checklist. It’s a great way to handle complex apps with a lot of ins and outs.
#5. Zeigarnik Effect
The Zeigarnik Effect is a well-known psychological phenomenon where people tend to remember uncompleted or interrupted tasks better than completed ones. Named after the Soviet psychologist Bluma Zeigarnik, the theory here is that unfinished tasks create a state of tension in the mind, which makes these tasks more memorable and motivates individuals to tie up these loose ends.
Understanding how the Zeigarnik Effect works is important in SaaS onboarding. It’s a proven way to improve user engagement and retention because you can tap into your users' urge to complete checklists and engage with onboarding content that pushes them towards realizing how your product will improve their objectives.
Advantages of observing the Zeigarnik Effect
Breaking onboarding content down into bite-sized chunks makes it more manageable for the user to digest. What’s more, the motivation to check off each item means you can dramatically boost your activation rates.
Users are more likely to remember and engage with features they've started exploring but haven't fully utilized. This scenario encourages deeper product adoption and an overall likelihood of retaining users and building loyalty.
If you keep your users engaged and motivated to complete onboarding tasks, you can reduce early churn and increase the likelihood of users becoming long-term customers.
Zeigarnik Effect onboarding example
If you want examples of the power of the Zeigarnik Effect in user onboarding, it’s hard to think of better implementations than onboarding checklists or progress bars. These onboarding features ensure that uncompleted processes stay in users’ minds during their early interactions with the product.
The online community platform Circle is a solid example of how to implement the Zeigarnik Effect within onboarding. The app uses a structured onboarding process to ensure users get a well-planned paring of key information that helps them get the most from the product. It also employs an onboarding checklist for new members, creating a sense of incompletion that motivates users to progress through tasks.
#6. IKEA Effect
The IKEA Effect, named after the famous Swedish homeware company, is an interesting cognitive bias where people place a higher value on products they have partially created or assembled themselves. In theory, if you have two tables of equivalent value and design, you’ll feel a greater affinity to the one that you assembled.
While assembling furniture is a world away from the SaaS space, the IKEA Effect still has plenty to teach us all about user onboarding. One of the most interesting applications of this psychological phenomena comes from involving users in the setup process and allowing them to customize their experience.
By offering a level of customization and personalization, SaaS teams can improve user engagement, satisfaction, and perceived value of the product.
Advantages of observing the IKEA Effect
When users feel they've contributed to setting up their workspace, they're more likely to engage with the product regularly.
Users who have invested time and effort in customizing their experience tend to value the product more highly, potentially leading to increased willingness to pay for your service.
The sense of ownership and familiarity developed through active participation in the onboarding process can lead to stronger user loyalty and reduced churn rates.
IKEA Effect onboarding example
Utilizing the IKEA Effect is all about getting the user to invest in the onboarding process. The AI chatbot app Drift shows how you can employ this phenomena by encouraging users to watch a brief product walkthrough and then get down to customizing the app to fit around the user.
Encouraging users to customize their chatbot works twofold. Firstly, it means the product is more personalized around user objectives. Secondly, as users put time and energy into the app, they become more likely to complete the other onboarding stages, engage with the product, and realize what it can do for their business.
 |
| Example from Product Led on Wave, customizing the invoice during onboarding. |
#7. Social proof
Social proof is one of the most well-known psychological principles. In fact, it’s so ubiquitous that people take it for granted. However, if you use it well, it can have a magical and transformative effect on your onboarding.
The thing is, we are inundated with information. While we’ve never had so much data and opinions at our fingertips, it’s not easy to tell the difference between genuine advice and sales patter.
Social proof provides a way for us to look at products through the prism of other users. It’s a fantastic way to see how particular tools have helped other people. For businesses, it’s a chance to channel the goodwill of their users and backup product marketing.
Social proof is an essential step in shortening sales cycles, establishing trust and credibility, and reducing the perception of risk surrounding your SaaS product.
Advantages of using social proof
When your customers see that other users have had great experiences, they are more likely to see your brand as a credible option. In many cases, these testimonials come when users are far down the sales funnel, which means they can greatly influence their willingness to become paid customers.
Social proof can influence many stages of the buyer's journey. In fact, it has a proven effect on conversion rates throughout the journey, including onboarding during free trials.
The SaaS market is competitive, and most businesses find it challenging to stand out from the crowd. However, social proof can give you a slight edge over rival products.
Social proof during onboarding example
Using social proof during onboarding is all about timing. Website analytics tool Hotjar shows exactly how to do it by populating its signup page with an incredible number of case studies that sell the benefits of the product.
In addition to case studies, Hotjar mentions that it has 900,000 customers and includes the logos of some of the more prominent businesses it works with. This content establishes credibility and trust with the user and makes it much more likely that they will not just sign up but also give the product a chance during onboarding.
Final thoughts
Increasing MRR is the holy grail for most SaaS businesses. While listening to users and acting on feedback, hard work and a great product are all essential ingredients for success, tapping into psychological principles can provide a much-needed extra edge.
The Usetiful platform offers features such as interactive product demos, walkthroughs, checklists, tooltips, and more that allow users to apply each of the principles listed above. Sign up for free today to learn how Usetiful can help you apply these psychological principles and supercharge your onboarding.