KPIs are a tool usually associated with marketing. But they are so much more than that. You can use them to measure the performance of your product or products. We’ll share some important KPIs for you to focus on, and a few examples on how we use them to build Palabra.
Definition of KPIs
KPIs are one of the basic elements that a start-up or any business needs to set up at their early stages. The word is an acronym that refers to the Key Performance Indicator.
So, KPIs will let you measure your business performance, and can be applied to measure the progress of your product as well.
You can count activities, costs, usage, revenue, and other measures. Through these Key Indicators, the product team can identify changes that might occur while users interact with your product, and based on that you can modify your business management.
In a business, there are a lot of different perspectives. Each department has its own view of what is crucial.
For example, a product team may take better advantage of KPIs focused on usage. Meanwhile, a sales team probably is going to use revenue KPIs. Stakeholders usually care more about the customer acquisition cost and the customer lifetime value, as indicators of the future development of the company.
This is where the role of the Product Manager becomes super relevant. This person will be in charge of merging all these points of view.
Also, the Product Manager must be able to use her judgment to determine and analyze what the best decisions are according to the goal or goals that each team must achieve. They play the crucial role of putting the focus back on the metrics that matter in case other teams lose sight of them.
PMs are the hinge that allows the doors to new opportunities and improvements to continue opening.
When planning your reports, you need to take in mind what is important to nurture your reports and focus not only on quantitative KPIs or metrics but also on qualitative ones. The KPIs are the strategic structure that your metrics need to follow. Metrics are the raw material you need to fill your KPI strategy.
There’s another common confusion while talking about KPIs.
KPIs are not the same as OKRs
Before continuing with the next topic, it is relevant to mention that KPIs are not the same as OKRs. There seems to be some confusion at first with these concepts and it is common for those who are just starting out, to take one for the other.
OKRs refers to Objective Key Results. OKRs are indicative of where some business, team, or individual wants to arrive.
KPIs, on the other hand, are focused on measuring how you will accomplish your objectives in the short or long term.
OKRs are useful to not lose focus on where you need to get your product or your team. And you can measure the progress through your KPIs.
Imagine that you’re driving a car. Your OKRs will be your roadmap. But as you’re driving your car toward your destination, you also need to keep an eye on your car’s dashboard to make sure that everything works ok. So your KPIs are like your car dashboard, where you have simple indicators that immediately tell you if something is performing well or not.
If you’re asking what you need to have first, remember that you can’t make a trip without a car dashboard. So, you need to define your KPIs before your OKRs. And we’re going to help you to achieve that in the next section.
The different metrics that teams manage and what a product manager should look at
In order not to extend ourselves too much, we would like to focus on four types of KPIs that can be found in a tech company: Business KPIs, Product development, Product Quality, and product usage.
You (or your PM) can create KPIs that’ll help visualize trends for the successful growth of your business. Usually, these KPIs are related to customer metrics (such as customer lifetime value or customer acquisition cost), revenues, profitability, costs, and everything aligned with the financial aspect of the company.
They’re the most common KPIs that people use when measuring their business.
You can monitor this kind of KPIs to measure how well your product is selling or engaging people in a certain period of time.
In Palabra we use 3 main KPIs to understand how well our business is doing:
- Weekly sign ups: Since we have a subscription model with a free trial, it’s important for us to understand how we’re doing week over week with our acquisition strategies. Signups are not free trials, rather users that started a subscription. We consider trials as part of the “Consideration” stage of our sales funnel.
- Trial to user rate: How many trials converted into new subscribers? This is where we get information on how well we’re doing in targeting teams that will actually get value from our tool. We also look at this metric to understand how well our onboarding flow is doing to show the value prop of our tool.
- Weekly active users: Since our growth is product-driven, it’s very important for us to have a product that people keep using. We don’t just measure how many people logged into the app, but also if they engage with our reports and notifications.
There are a few other important business KPIs for product teams we chose not to focus on at this stage, such as CAC (Customer Acquisition Cost), Weekly Leads or Lead to User rate, or new Team invites from a user.
We learned it’s better to focus on a few metrics instead of covering every part of the business. What those important KPIs mean for your business will depend on your revenue model, your acquisition strategies, and your tracking possibilities.
Product development KPIs
Use this kind of KPIs to measure possible improvements in development speed or errors to fix. They work to measure internal progress.
One example of a product development KPI is Time velocity. You can measure how many sprint points a team can solve in a period of time. This can be used to plan future projects and improve development times for your teams.
In Palabra we measure time velocity using Epics. Our Design & Growth teams prioritize features for the Engineering team to focus on. The Engineering team then translates them into Epics, figuring out exactly what it takes to accomplish them.
We not only measure how much time it takes us to complete each Epic but also how good we are at estimating. If an Epic takes more than planned, we try to find if there’s anything we can do to estimate better next time.
Product development metrics are often passed by, but they’re crucial to be predictable. With predictable development times, you’ll be able to deliver timely new features to your users, communicate them, and build trust within the team and with your customers.
Product quality KPIs
You can find these types of KPIs in tasks related to customer experience.
For example, a common metric to measure this is the number of tickets that customer service accumulates in a certain period of time. You can have tickets for a lot of different reasons or even social media messages with complaints about a particular feature.
Reading or listening to the users, will let you measure the evolution of certain changes you made to a feature, design, or usability in your product.
Watching the problems in the product (or feature), and measuring these KPIs, could put you on a path to a predictive quality strategy, more than a reactive one.
Product usage KPIs
For UX/UI developers and designers, this kind of KPIs will allow them to know how users perceive the product and if it’s easy to understand and use. You can read more about related metrics for product-oriented strategies in our latest article.
Usually, they’re easier to measure inside an app or website with the right tools. Google Analytics is fine to measure a website, but for apps and other types of tech products, you’ll probably need something more specific.
While building Palabra, we like to consider what metrics we need to build our product, combining them with what we learn from our users and target audience, and build them as features for the product.
For example, we’re usually interested in knowing how many people start and move forward in their user journey. In Palabra, an ideal new customer journey looks like this:
- Start their trial
- Connect their data using Segment or direct integration
- Create at least one journey with two steps or more
- Log in to the platform at least once more before the end of their trial
We use our own tool to measure how many people go through each step in this journey, in a dashboard like this:
And we use weekly email notifications to see how we’re doing week over week. Every Friday we get notified in our emails and in a Slack channel how many people entered and finished the funnel, as well as how much better (or worse) we did compare to last week.
The North Star Metric
As you know by now, there are a lot of metrics you can use to measure your business or product. But, that brings another problem: the desire to measure everything because everything is measurable.
Please, don’t measure everything. You will end up dizzy and confused and missing what is really valuable for your business.
With a North Star Metric, you can solve this problem easily. This method consists of choosing one KPI (yes, only one). The one you choose must be the core value of your product. Does that mean that you should not measure anything else evermore? Nope.
You should start with one, and keep adding other relevant metrics that are functional with your main KPI. When you overcomplicate, that generates immediate paralysis.
Using a North Star Metric gives your company a clear direction and your teams can focus on working on optimizing a single thing at a time (which can bring better results than working on five things at a time). For example, all your teams can focus on user growth or use of some specific feature, every team has the same KPI that handles in his own way.
Something else you must keep present: KPIs measure your product or company performance, they are not tools to feed your vanity. In fact, measuring a product or feature based on vanity nullifies objectivity and causes unnecessary strategies or KPIs that don’t add value.
Some final notes
So, for your company to be able to take full advantage of its resources and staff, the goals must be aligned to push everyone in the same direction. That is why defining your KPIs is vital.
They will also push teams to make data-driven decisions. However, as we mentioned in this article, it is important that each team choose the right metrics since a data-driven decision without them is useless.
KPIs = Data-driven decisions but with the right metrics, goals, and information.
Let’s talk about KPIs, book a demo of Palabra, and ask us all you need to know to configure your metrics and KPIs.
You don’t need a tuxedo for this kind of event. Find out how to start tracking the events in your website or app and which are the most relevant tools in the market today.
What is an event?
A word that you definitely heard when working in product analytics is “Event”. According to Amplitude, an event is:
“any distinct action a user can perform in your product (e.g. add to cart) or any activity associated with a user (e.g. in-app-notifications, push notifications).”
To be a little more specific, an event can be a slide, a scroll, a click, a download, a text field being filled, a page loading, an audio or video playing. Usually, every event is tagged with the user action’s name as well as the element type and its name. So you can usually find, for example, events like “Create Account”, “Share Blog Post”, “Play Tutorial”, “Brochure download” or “Select Option”, to name a few.
An event may or may not be a conversion. There are things that people do on your website and that aren’t necessarily your main goal, but you want to be aware of them.
For example, an event can be “download a PDF” (something you want people to do on your page). However, an event can also be clicking on a button that leads to an external website, such as a button that leads to a customer’s site (something you don’t want people to do). With events, you can track when traffic is sent to the external page and from there improve your strategy.
Events are not just about clicking this or that, they also allow you to visualize the context in which those clicks occur. You can usually view details such as activity duration, the time of day when it happened, from which device it was made & where the person was geographically located.
At Google Analytics, for example, with each event, you can send parameters (additional pieces of metadata that add more context to the event). They can be used to provide context about the event that occurred and where, how, and why it occurred.
These metrics can help you paint a clear picture of usage patterns for any website or digital product, like mobile applications.
Why would you want to track events then?
Usage data tends to be much more reliable than just relying on qualitative information (such as user surveys or product testing).
For product teams, data can bring you a more complete picture and let you make the right decision to drive business outcomes and improve the product experience.
It’s not a secret:
To correct or improve your products or applications, you must obtain detailed knowledge about your users.
Tracking the metrics within the product provides that information: you can know in detail how, when & where your users interact with your product’s components.
With the right info, you can stop guessing what your users like and you can really know which features generate more engagement.
Get to know your star features and use them to generate a higher percentage of retention among your users (and therefore, a higher profit).
The big question: How can you start event tracking?
Amplitude also said about events: “When deciding what events to track, it is helpful to think of event categories first.”
Google Analytics records many parameters and events automatically, which allows to obtain a lot of information without so much effort. You can find information about all the pre-established events that Google Analytics has.
Besides, the number of events that can be registered is unlimited. This freedom, if paired with poor planning, can lead to problems in the setup of the data you wish to track.
Problems like: omitted events, poor names, and improper use of properties, can generate complications and prevent you from getting the full value of your data.
On the other hand, keep in mind that although the information may be unlimited, your time to analyze it and apply it to the product is not.
So before you even start tracking events, the most important task you need to do is think carefully about the priorities that your team must respond to, in order to measure them.
If you’re starting, maybe focus on two or three business objectives to pick which events you need to follow. Some objective examples could be improved user acquisition, optimized conversion, increased retention, or improved engagement.
Example time: Suppose that improved engagement is really important at the moment in your company. You have a lot of visitors or downloads, but just a few active users. In the case of a video platform/app, you can begin to track the duration of the plays per user or the number of videos the users upload daily/weekly.
Note: When your company is using a PLG strategy, it is important that you use product-oriented metrics and not simply the same metrics that marketing or sales teams use.
Now you have the basics to know how to track an event, you need to know which tools are available for the task.
Most popular analytics tools
No analytics article will be complete without mentioning the most common and popular analytics tool: Google Analytics.
Although Google Analytics is one of the first tools (and free!) that appeared on the market, it was developed thinking of tracking metrics for websites, at a time when there were only a few actions to perform and everything was more static.
So while it is still one of the best tools in general, it is not the best for tracking events within digital products.
In response to this, many other competitors have emerged and have established themselves as leaders in the area, such as Amplitude, Mixpanel, Hotjars, Looker, Heap, and Pendo.
These types of tools, unlike Google Analytics, allow you to choose which metrics you want to see by default and are designed for product team collaboration. They also offer a much friendlier user interface and clear terminology.
In this sea of product analytics applications and complex metric reports, what does Palabra add?
At Palabra, we analyze the needs of product teams. Thanks to this, we have developed a tool capable of displaying data easily with a super friendly interface for non-coders.
In short, you can see in real-time the paths that users have taken in your product (even drop-off) and all the possible combinations, just with a few clicks. It’s simpler and painless.
Solidify the foundations of your product team by tracking the correct events with the right tools. Book a discovery call and start learning how to unleash the power of event tracking.
Think you just can use any metric to measure your product’s performance? Think again. PLG companies need to use product analytics that combines growth and user experience. Here’s how.
Have you recently changed from a sales-led to a product-led model and are still using the same metrics to analyze your products?
If you have not yet switched to a PLG strategy: What are you waiting for to implement PLG? Learn more about the product-led strategy in our recent article.
If you have already started using a product-led growth methodology, but are still looking at the same metrics: join us in this article to review your approach.
Not every sales-led metric is right to measure your product’s performance. Product teams need to focus on a few specific metrics to analyze and improve the features of the product.
Why product analytics matter?
Even if you are just starting your business or if you have been in the market for 20 years, you must collect all the data you can about your product and your users.
Data is the foundation stone that will allow you to build the rest of the product and the strategies for your teams to maintain and improve it.
With the analysis of the product data, you will be able to fully understand how your users use your product, which functions are the ones that hook them the most or which they dislike and make them drop off the flow.
Trying to improve your products without data is the worst thing you can do. One of the cardinal sins of product teams is often assuming they think they know something about users rather than verifying it.
In summary, product analytics provide us with revelations about the true behaviors of users and not simply those that we wish, or want, to validate to corroborate our hypotheses.
But another very important mistake made by companies is using the same metrics that are used in marketing or sales to measure the performance of technological applications or products.
Product analytics you need to start prioritizing
Among all the metrics that exist to observe, product teams must prioritize some of these in order to know that they are going the right way.
Free to pay
To see how users go from using free apps to paying for them (which is the main goal), we can look at the engagement metric.
Engagement allows us to look for signs of a deeper commitment to the product. This is not just using features, but also for how much time it is used (minutes, hours, days), and the speed and ease with which an action is completed within the circuit.
Music apps, for example, could measure the number of minutes users listen to songs during a period of time.
But for the engagement measurement to be relevant, you must face it against the number of active users currently in the application. It is not the same to have 50 minutes of song listening time divided by 5 users than divided by 2 users.
Sign in to conversion
To improve the percentage of visitors who immerse themselves in the product trial, we must look at the activation metrics.
Activation metrics measure when a new user becomes an active user. For example, if you have a music app your conversion goal will be that the person who signed up listens to 5 songs or makes a playlist in a specific period of time.
These kinds of actions are key to determining that your visitor is now a user who will continue using the app’s features in the long-term.
This metric allows you to know the growth of the user better than just counting the number of new users who joined your app.
Occasional to active user
Your users signed up, activated the product, used it once or twice. That’s great, but what happens next?
To measure the next phase you can use the “active users” metric.
Your users can be considered “active users” when they have found value in the product you offer and have used it continuously in the short term.
If your product is not delivering value to users, you will clearly see a low percentage of active users.
In the event that your activation metrics are good but your active use metrics are not, it is possible that your product is attractive but is missing something in the design or in the way in which you display the content.
You can use different tools to find out why this is happening. Palabra was built to make it easier to see how users move towards value. Whether you use our tool or not, we highly recommend you look into the steps users need to take towards a desired outcome, and find where most of them are falling out.
It’s also advisable to look at the retention metric:
Maybe you need to analyze which is your engaging feature, which is your star product, and which are the issues that scare your users away.
The retention metric is the number of users you retain over a period of time. This is one of the most important metrics when you have a subscription-based business. Even if this is not your case, retention is a way to maintain your business profitable, given that getting new users is far more expensive than maintaining them.
Keeping your retention metrics up to date will ensure the possibility of performing the necessary iterations to increase the success of your product
Don’t forget to watch your total number of users.
It would let you see the total number of people who pass through your app (either active users or not).
This metric allows you to define the percentage of active users and estimate the maximum capacity of active users that you can obtain given a certain period of time. If your reach is high, but your other metrics are low, you need to revisit your product and your user flows to find what’s going on.
As you can see, when we work with technological products, the metrics that we must observe may be similar to some that we have already been using, but with a different approach.
Product teams should focus on improving usability so that it has a positive impact on the rest of the metrics, and not focus so much on profit or increasing the number of users just because.
Offer your team much more than just Google Analytics. Schedule a demo of Palabra and let them see for themselves the value it can bring to their workflow.
There are 4 aspects that companies with a Product-led growth approach have in common and that could be the key to their success. Find out what they are and maybe apply some of them to your own company.
Not so long ago, B2B software sales used to involve an executive who made the decision about whether to purchase or not. And that decision impacted the end-users (employees) who suffered the consequences of the selection of incorrect software for their workflow.
However, as the software industry shifted towards an end-user orientation, more B2B businesses are approaching a Product-led growth methodology.
In a previous article, we explored the definition and benefits of Product-led growth. Now we want to dive into what those B2B companies that successfully apply this business model have in common with each other.
At Palabra we did our homework and, given our recent research, we can mention that there are 4 aspects that repeat throughout several PLG companies:
- Solve employee/end-user pain
- UX matters more than design
- Integration to employee stack
- Deliver value before the paywall
Let’s check each of those points separately to see what they mean.
Solve employee/ end-user pain
Some people recognize this point as “virality”. But the reality is that there is no virality if there is not a good product, and a good product solves the problems of users.
B2B companies are very used to focusing solely or primarily on solving executive problems. They have a very different look at what the product or the company means to them. Therefore they look for tools that allow them to increase ROI.
Spoiler alert: this does not work the same with end-users (which in this case will be the employees of that company).
It can be easy to ignore end-user pain points if executives buy your product anyway. But that won’t bring you profit at the end of the day, because no one will talk about your product and no one will want to use it, because it was not designed to solve their needs.
Creating a successful product for end-users means identifying their issues and worries and solving them. It would be useless for your application to be full of glitter if it does not add value to those who use it.
UX Matters more than design
We have all gotten used to seeing pretty and bright designs on the internet. Therefore, a very important differentiator for your brand will be that this application may be able to solve a problem that the user has.
According to Forbes, a well-designed User Interface (UI) could raise your website’s conversion rate by up to 200%. Ok, that’s good, right?
Well, a better UX design could raise your conversion rates up to 400%. That’s even better.
Applying methodologies and research focused on end-users in the development of your products is key to getting to know their real needs and not simply assuming that you know what they are.
Do not jump directly to create a solution, first think about your user-person, then about their problem and the way to approach it and that path will lead you to the solution.
This point is intrinsically linked to the previous one. Both of them are necessary to create products for end-users.
Let’s stop here to give an example of what we have been talking about so far.
One great platform that solved an end-user pain point has been Trello.
Trello understood that work teams could suffer from great disorganization and that sticking post-its that could have unintelligible handwriting from a co-worker (sorry, Kevin) just wasn’t enough.
That is why they created a digital solution, with a simple design, that allowed all team members to see the progress of tasks and projects. And that allowed them to be more in communication with each other without having to talk so much between them or send hundreds of hard-to-find emails.
Integration to employee stack
To achieve this you must think like an end-user and not like an executive (surely there is something in your work environment that you think could be done better).
Your products will be better integrated into the team’s workflow if you manage to reduce the friction that prevents it from reaching them. For example, if you have to pay for the product to start using it, you will probably never use it.
So no more “Talk to sales” button and more “Sign Up”.
It’s much easier for end-users to use and buy your product if they find value in it.
Deliver value before the paywall
Imagine that you enter a store they asked you to leave your credit card details or to pay for shoes that you have not tried on yet. It sounds a bit crazy, like a science fiction story.
Users are intelligent, they do not need you to be on top of them explaining every detail of your application. Your software must be able to speak for itself and convince users with its functionalities.
Nobody wants to pay for an app without knowing if it’s going to make all their days miserable because it constantly crashes.
That is why companies that apply freemium, free-trial models or that sometimes do not even require payments are so loved by people. This is one of the best ways to acquire customers quickly according to ProfitWell.
Still in doubt of how to apply this to your company? If you’d like us to talk about how to follow up on your users to learn and improve your features, feel free to book a demo of Palabra.
Think product-led growth is just startup lingo? We found it tells a story on how the software industry adapted to a rapidly changing market, and we want to tell you all about it.
Do you remember when you first started using software you use every day today?
Have you ever started using an app almost by accident and then it became a central part of your life?
That’s the magic of the product-led growth methodology.
When we first started selling and buying software, we had to buy (pretty expensive) products before even seeing or trying them.
It doesn’t happen so often anymore, and that’s because the people who buy software (us humans) have changed the way we buy them, and the industry has changed with us.
In this article we’ll walk you through this huge industry shift and share a few benefits about growth led by product, hoping it’ll help you navigate your software business.
Previously in the software industry
The software industry has rapidly expanded and changed since it started sprouting in the 1980s and 90s.
As we write this, our industry is moving from a sales and marketing led era to a product-led one. Let’s see how that happened.
The marketing-sales-led era
The software industry exploded in the 2000s.
Although software existed before, it was only acquired by people who had technical knowledge.
With the rise of personal computers, technology costs started to go down. This allowed the industry not only to be able to sell more and more software at lower prices, but also to implement a “software rental” system (SaaS business model)
This brought about a change in consumers. The experts were no longer the only ones who bought software, now people who did not know how to program were beginning to acquire and use software too.
Now as software users grew, so did the knowledge on how they use it. Companies started leveraging all the information they suddenly had about their users to grow their business.
Most acquisition strategies became a mix that leans towards marketing (for consumer products) or sales (for B2B products) as the sole driver of growth.
We’re still relying on MQLs and SQLs to sell our software. But other traction drivers are starting to gain leverage.
The users thoughts and opinions when consuming these types of products began to become more important.
The end user era
Even if marketing and sales growth strategies are still pretty much standard in software, it’s becoming harder and harder to rely solely on them to grow.
Today, end users are able to find, get, and use software on their own. Thus, any member of a company is able to bring the value of an application to their own work or to the workflow of their team.
Customer success became not just a service to customers, but an ongoing strategy that includes improving the product itself to keep people from moving to a competitor.
Andrew Chen wrote a few years ago about how lower barriers to the software industry and rising costs on advertising are making it harder on small companies to grow.
That’s where Product-led makes its entrance on the scene.
Product-led growth: know your new methodology
The Product-led Growth methodology (or PLG for short) according to Blake Bartlett, who coined the term in 2016, is:
an end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion and expansion.
This means you don’t have to spend tons of money on marketing or sales, but rather start by investing time and money in making a product that is viable, usable and potentially loved by your future users.
Please don’t fire your marketing team yet. Continue reading.
Unlike the sales-led or marketing-led model, the product-led does not focus on the product promise, but is responsible for effectively bringing it to reality, in the hands of the users.
Product-led works by removing friction from end users’ lives.
It manages to provide them with a tool that they can use practically from anywhere and at any time. The software designed from this model is easy to start using, which provides value from the ground up.
To put it simple: try before you buy.
But being product-led isn’t just having a freemium or talking about virality in your team meetings. It is not a go-to-market magic formula either. It’s a methodology and a set of principles that any company can adopt to improve their product, their product experience and, at the end of all, their efficiency.
There are 4 axes to this strategy:
- End users are always first
- Invest in your product to grow your business
- Giving before receiving
- Integrate your sales or marketing team into product design and development.
What Product-led Growth can do to your business
Now you know how the industry changed and what most users expect from new software.
But being product-led isn’t just a survival method for startups. It can bring multiple benefits for your company (and your team) as well.
Firstly, more communication and collaboration between areas is needed as you move from marketing or sales led growth towards product-led growth.
Quick iterations and feature development is key, as it’s making the right product decisions for your users and prospects.
Furthermore, according to Wes Bush, CEO of ProductLed, some of the main benefits that PLG can offer for your business are:
Rapid global scale
With PLG each user can test the product on their own, where they are, without having a sales manager drive (or fly) into their premises. There are fewer geographic limitations to marketing as well, since product adoption isn’t driven by targeted or physical ads.
It’s much easier for companies adopting PLG to have a global reach in less time.
With product-led strategies you can reduce acquisition costs per customer (yes, the one that’s been increasing dramatically over the last 10 years).
Less ad spent means lower CAC and a profitable business.
Faster sales cycles
PLG does not focus on having more users in less time, but instead focuses on getting quality users, who trust your product and like it.
Leaving the product in the hand of your users will reduce distribution costs and efforts of your sales team.
Showing people how your product works not only shortens sales cycles, it builds trust in your brand and your product.
Integrations between companies would have sounded crazy 15 years ago, and now it’s one quick traction channel.
As you have seen, Product-led growth is not a passing fad, but the logical result of a whole process that has been in the making for more than 20 years.
Applying these principles and learning from how new features impact your users will allow your business to grow without burning your runway in advertising.
We’ll write about these principles and tips in upcoming posts, so make sure to subscribe if you want to get them in your inbox.
And if you’d like us to talk about how to follow up on your users to learn and improve your features, feel free to book a demo of Palabra.
Getting people to get value from a product is not an easy thing, but looking into the funnels it has can help make it easier. Wait … aren’t funnels a marketing thing? 👀
What is a funnel anyway?
Imagine a pyramid, now invert it and then slice it into different parts: congratulations, you have a funnel.
A funnel is a concept usually applied to marketing strategies, and refers to a series of steps that the visitors or customers must go through to complete a concrete action. They have a top, middle, and bottom section; that can vary according to the use of the funnel, e.g: the AIDA funnel model (Awareness, Interest, Desire and Action).
In other words, a funnel is a system to understand how customers move towards a desired action.
Every business is different, so everyone has to plan out their own funnel to use it correctly. You can imagine how your funnel should be and then you can adjust it as business grows.
Outlining every funnel in your business is the first step to be able to optimize them and meet your goals.
Funnels aren’t just for marketing
Yes. Funnels are traditionally associated with marketing. However, at Palabra we quickly learned funnels can also be used to improve your product.
Business goals are important for product teams, but so are the users. So they need to converge: funnels are the perfect tool for such a task.
According to Alex Iskold, partner at 2048 Ventures, we can think of every department in a startup as a step in the funnel: Marketing would be at the top and Customer Success at the bottom. And the product? right before Customer Success. That means that Product and Customer are the two main cores of the startup and there’re where your focus should be applied.
What if… your product is a funnel?
Once you get the funnel concept out of marketing, you find that you can apply it to just about anything. Including the product.
You can go deep into your funnel to find the precise actions that make up your product success, and the exact steps people take to get there.
In a funnel, the beginning of the process is where the largest number of users enter. As they go through the steps, many of them are lost throughout the process. The final number that reaches the conversion is a minimum percentage of the start.
Studying the metrics of the funnel process allows you to work to reduce the loss of users in each step of the process.
For example: Let’s say your product is a video upload platform. Success for that product is not to get people to upload videos, but rather to do something with that upload.
We may want users to embed the video in their website, or share it with someone else (that depends on our business goals as well). That’s the end of the funnel. And the steps users take to value are what makes up that funnel (like signing up, uploading a video, maybe installing a plug in).
Once you find your product’s main funnel, you’re ready to start optimizing each of those steps. We may find, for example, that most users fall out before embedding the video. Looking into it, we may find there’s a UX improvement we can do (or a notification we can send).
Optimizing one or more steps in a funnel is the easiest way to improve your product KPIs.
Likewise, this can be applied with all facets of your product. You can visualize each of these stages as a funnel in itself.
Some examples for product-oriented funnels:
An important part of delivering a product is that your users can reach value soon to understand it. If you have many steps people need to take to get to value, you’ll probably have a lot of users falling out. Finding where the drop off is and optimizing your onboarding will improve your activation.
Free to paid funnel
Whether you have a free trial or free plan in your product, you probably want to keep track of the steps users take to move from free to paid users. There can be infinite reasons why users are not converting, so tracking more than one funnel on free to paid is an easy way to meet business goals with your product.
Why we chose funnels as a tool for product teams
Product teams are used to think about user flows rather than funnels. We think funnels provide unique insights to teams, helping connect business goals with product efforts.
While creating Palabra, our focus was in creating an easy way for product teams to create and see their main funnel.
In the sea of information, product teams have to navigate to get answers and prioritize features, funnels are a good way of creating order within the chaos.
By focusing on a specific funnel (or even specific steps within that funnel), you can quickly look into what you can do to improve conversion, and prioritize features.
The best part of funnels is that they give you something to focus on.
Ours is not the only funnel-oriented product tool, of course. Most analytics tools use funnels, like Mixpanel, Smartlook and Amplitude.
We’d like to extend that use of funnels for non technical teams, and are working towards it.
If you haven’t yet found the funnels within your product, or the tools you’re using aren’t working for non-technical roles within your team, we’d love to help out.
You can book a demo if you want us to discuss your funnels in depth.
Low open rates? Don’t throw your content to the trash! It could be your domain settings. Having your settings wrong (or not having them at all) could ruin all your email marketing efforts.
Deliverability rates are a big deal for us at Palabra, so here’s a few things you can do on your end to make sure your emails get to your audience’s inbox.
Why you need to pay attention to your domain settings
As an early SaaS or as an all-in-one boss and employee, especially if you’re a no-coder, it can be tempting to not invest time and resources into your domain settings.
But they are super important, because they improve several aspects of your email marketing and your company image in general:
You can have your GSuites account or you can create email accounts which are hosted on the same server than your website, or on a different one. Whatever your preferences are, is priority number one that you configure the DNS MX Record.
It goes without saying that if you have your GSuites account (or any other paid email service) you must configure the extension to match your domain name. Getting business information from firstname.lastname@example.org is kinda weird. It sounds like a joke or a scam.
When we set up MX Records we are informing the servers that receive the message that our address and our domain are legitimate. That we are backed and credible.
Make your customers take you seriously.
The email domain settings, when wrongly applied, can cost your domain authority.
Domain settings, as we said before, bring a kind of approval stamp for your mailing. When you don’t have this, your emails could be flagged as spam or could be read by the filters as phishing emails.
While doing email marketing implies sending hundreds of emails, imagen that those hundreds of emails are seen as perjudicial messages, your domain authority is going to crush quicker than a kid after eating all the halloween candy.
Credibility and Domain Authority are two points that overlap and complement each other to help your email marketing strategy.
A crucial point for doing business is to make connections with clients. And if you’re using an email account that is not properly configured or if you don’t have the necessary settings to send marketing emails to tons of clients, this increases the chances that these emails will be rejected by spam filters.
To guarantee your deliverability there are several things to check out: SPF, MX Records, DKIM and DMARC, among others.
Now you know the dangers of ignoring your domain settings, let’s talk a bit about some of them.
The most important email domain settings
With the increase of bots and new technologies for mass mailing of emails, IPS’s today put on a great effort in verifying the authenticity of email senders.
In order to avoid being cataloged as an illegitimate email sender, you have bear in mind these practices to assure, most of all, the email deliverability:
As you must know, MX comes from Mail Exchange. Normally a domain works with several servers, which means that there could be one or more email servers.
The MX Record indicates which email servers accept the incoming email and where emails sent to your domain should be routed. Basically, it connects the dots between the sender and the recipients.
It is important for both outgoing and incoming emails, if it is not properly configured you could have problems sending or receiving your emails.
Usually the MX records can be managed in the panel of the hosting company where your domain is registered.
Another important setting nowadays is the DomainKeys Identified Mail or DKIM. The task of this setting is to give the approval seal to email the source.
It encrypts the signature of the emails or messages and it can be verified by an external source. This cryptography works the way wax seals worked on paper letters, meaning that it shows that the message is legitimate and comes from a legitimate source.
The functionality must be enabled in the outgoing mail server in order to configure the DKIM. If you want to check that you’re sending emails signed by DKIM protocols you can write an email and send it to a free email account (gmail, yahoo or whatever).
Also known as Domain-based Message Authentication, Reporting and Conformance.This standar assures the clients that the email address is authentic and it’s been sent by you. It prevents other people from sending emails using your domain.
It was implemented for the first time in 2012 and is based on the authentication techniques such as SPF and DKIM .It’s currently supported by Google, Microsoft, Yahoo, and any major IPS’s.
This is a powerful and important weapon to prevent scams and frauds committed in the name of your company. Your clients and you could be safer using this standard.
They are not exclusive and we recommend checking all of them out.
These are strong items to consider to implement a successful email marketing strategy.
And, although email marketing is an excellent way to contact your customers, many people do not make use of its full potential. To reach this you should not only send emails, but send emails based on user actions.
✨Improve deliverability sending trigger emails✨
Applying trigger emails is the next step in the email marketing evolution. According to a Smartinsights survey, trigger emails report a major open rate than other email marketing methods, with autoresponder emails in second place.
Palabra allows you to automate your user actions from your app and transform them into powerful communications. Although there’s no amount limit to send emails with Palabra, with trigger emails you can send more effective emails and lower their frequency.
Also, with Palabra, you can configure a custom MX Record to ensure deliverability. Not only can you improve your open rates, you also can be the first in line in your user’s inbox.
Set your domain and start to manage all your conversations from a unique platform. Every action is registered in a timeline for every user, and it reflects the engagement rate from everyone.
Do you already have your own domain and want to start automating your communications? Join our community!
Great onboarding emails don’t need to have impressive design. They should provide a clear path for new users to follow to get as much value from your product and as quickly as possible. While creating Palabra’s onboarding, we went through our favorite plain text emails. Here’s what we learned.
Plain text is the way to go 🚀
Writing HTML emails takes a lot of time, even with image based builders. As an early stage company, we simply didn’t have enough time to design and mark our emails.
We also have a lot of reasons to go with plain text instead of image-based. It helps deliverability, accesibility and looks much more real and important than ad-looking emails.
That’s why we decided to go with plain text emails all the way. We explored different email sequences that used plain text (or simple styling) to understand what they did best. And where better to start than our very own inbox?
We noticed a few of the onboarding email sequences we got were really helpful for us as users. They kept simple a simple design and used mostly text to share their best features.
And we found some awesome examples of onboarding sequences that use little to no HTML styling:
- Notion’s awesome and personal onboarding (simple styling).
- Superhuman’s daily bits of information on its greatest features (only text and images).
- Zest.is drips using only plain text and images or gifs (our personal favorite).
Here’s what we discovered.
Welcome emails are more than a confirmation
Every SaaS company must start their onboarding sequences with a welcome message that is sent when a user joins the platform. This is a must by now, since everyone who signs up will expect some sort of confirmation of their transaction.
I mean, it is essentially a welcome message, but it can be so much more.
For example, SuperHuman sends you a warm welcome message that immediately teaches you how to use their Command.
Another excellent example of welcome email is from Zest:
We love these simple but catchy lines. They nail the exact effect that plain text should achieve: make you feel among friends.
Both Superhuman and Zest suggest a next step you should follow after receiving that first email. This gives a clear path for people to follow if they want to get value from their products. And that’s the best thing you can do with a welcome message.
A name and a face
This is a great tip to increase engagement. I always feel awkward when I don’t know who is writing on the other side. Is it the CEO? Someone from Sales? Is it a super intelligent baby? Who knows.
We can see this information clearly in Notion’s emails. Ivan is not only a name, he is Notion’s Co-founder. It’s flattering to receive a direct message from a co-founder, it also gives the impression of commitment from the very roots of the company.
At Palabra we do the very same thing. Our emails are sent by Paula or Karen, who are the founders (and the heart) of this project.
A photo is not a requirement in itself, yet, the clearer the image we have of the person who sends and receives the emails, the more engagement we can generate.
Even if you have hundreds of people working in your business, you can create an identity to address your users.
Emojis in the subject (use with caution)
This point is more to talk about email subjects, a very important topic that sometimes is forgotten.
If every email is a gift to your users, the subject is the wrapping paper. You want it to be shining, flashy, stunning so the reader has no other option than to open the email.
Definitely, most of the plain text onboarding sequences than we observed have emojis (at some stage) in their subjects.
Remember: emojis are important, but they have to reinforce the idea of the text in the subject. Otherwise you’re gonna look cu-cu or, even worse, desperate.
Zest win the contest of better subjects seding thing like:
- you here -> 💗
- make yourself at home 🍋
You can also include them in the body of the email to generate a greater visual impact and a neatear appearance.
Email ’til you make it
Yes, we received tons of emails per week. In fact, Superhuman mentioned it in their onboarding email sequence.
(this is simply genius)
But preciscely for that reason you have to be present. The first days are critical to impress your users.
Zest has the strategy of sending an email the first day a user joins. And then three more during the second day, another 4 days after and another one 10 days after.
Imagine someone you’re dating sends you 4 emails in 10 days (well, in that case, you’re probably Meg Ryan, so maybe it’s not so bad).
This could sound excessive, but it can take a while until people understand your value. Just make sure the value you’re providing is clear, and that each email you send has a reason to be in people’s inbox.
Thank yous matter
Far from recommending you stalk your users, we want to encourage you to use emails as a tool for a meaningful exchange of information. You can learn one thing or two about your own service or product.
The Superhuman sequence puts feedback as a priority, using sentences like:
“We love hearing your feedback: please reply to this email and say hello :)”
“We love hearing from you! Please reply and let us know what you think 😃”
In the email sequence that we mentioned from Zest, at the 10 day after the user joins, they ask for the thoughts and feelings about the platform and for the likes and dislikes.
A “thank you” at the end of every email leaves a good impression. Of course. It’s also a good idea to make a special thanking email. When a business is growing, every user is something to thank, so let them know that in your own words (or emojis!).
If you read this far, ping us at Twitter and tell us who sent you your favorite onboarding emails.
Plain text sounds boring? Well, let me tell you that plain text is more important than you can imagine. At Palabra we love plain text to send every email, specially our onboarding sequences. And in this article we’ll share why we think you should start using it too.
Isn’t plain text for grannies?👵🏼
Plain text has been around since the beginnings of the Internet. So it is understandable that some people think it is obsolete. Maybe there was a time where HTML emails were on a boom, but plain text today is more functional than ever.
Before we continue we’d like all of us to be in the same page about what plain text is:
The term Plain text, when we talk about an email, refers to the composition that consists of the copy within the style. Which means that it does not include complex formatting or styled fonts. Although it can have images and links.
Even if plain text could sound boring at first compared with HTML emails, you will discover that their use can bring many benefits in general, and especially for onboarding sequences.
Use plain text for onboarding sequences 🏆
When you have a service or a product that depends, on a large portion, of having a constant flow of users, you might want to apply an onboarding sequence in order to avoid the churn rate and to connect with your community.
If you’re still in the early stage of your strategy, we recommend to read our article about 5 questions to ask yourself before creating an onboarding email sequence, it will guide you in the process.
Over the years, new technologies have risen in the field of user experience. We now have many tools to call the attention of customers. This means people are getting a bunch of emails that now look like ads delivered right to your inbox.
Onboarding should look nothing like ads. That’s when you start a close relationship with early users, you educate them about how to use your product better, and open communication channels.
5 reasons why plain text is always a good idea
📩 It ensures deliverability
The number one thing that you need to do to engage with someone is to get their attention. And for that, you need to get them to open your emails.
As we said before, HTML emails have images, links, GIFs, all sorts of things that attract the attention of email filters. So they’re more susceptible to being redirected to the spam folder if they have broken links or suspicious behaviours.
Since plain text emails don’t contain much more information than text, it’s much more likely that they will not alert spam filters.
Also, plain text emails seem more “real” to your email filters. And that’s also handy for your readers!
📜 It feels more personal
Once your customers open your emails, you don’t want them to say “ugh, another stupid corporative email. DELETE”. That’s probably the worst case scenario.
Plain text has been proved to have higher click-through rates. Not just because they can pass spam filters, but also because they feel more personal. They look like something a real person sends, to offer information instead of driving sales.
Then, when you receive a plain text email, it is more associated with a regular person, someone who just wants to talk and know about you as an individual (and not as a target). Your users can perceive you more relatable, human and trust-worthy ✨.
🗣️ Starts 1-1 conversations
As you can see, there’s a progression. And with plain text you help your emails to be delivered and opened. Do you know what is even better? If your users answer the email!
We like plain text precisely because of this. Through this kind of emails, we’ve received feedback from our users that was very valuable for us to grow as a company and as a team. They respond because there’s a real email address from a real person to answer to.
We send onboarding emails that appeal to conversation. Having a dialog is the fuel to power the relationship with the users. We try to build a space where the user can feel part of the process and can say something to improve the use of a tool that is so necessary in his life.
👩🏼🦽 Is more accessible
Now we want to highlight something that usually goes unnoticed. Plain text is readable for accessibility systems. This kind of emails has an ethical benefit, because they’re reachable for people with different needs.
When you send an HTML email, you’re making it more difficult for a blind person, for example, to understand your message.
At this point, it is good to ask ourselves if our emails can be accessed by a blind person using a screen reader.
🔮 Adapts to new technology
From the previous point it follows the fact that plain text is more readable. I personally was surprised to discover that you can read your emails in smartwatches and smart assisters,or that you can obtain a more comprehensible preview of the content.
I know, it is super obvious when you think about it. But we do not always have in mind that there are other kinds of displays where people read their emails or notifications. And that we have to be ahead of the new possibilities, because we don’t know what type of devices will be developed in the future.
In this case, keeping it simple will ensure you that people can read your messages.
So, now you know, don’t be shy and start sending those emails and talking to your users. You may be pleasantly surprised with what you discover.
People are signing up? YEY! 😍 But then they drop out? OUCH 😭
Early retention is a big issue while growing a SaaS business, and one of the most common strategies to reduce churn for new signups is onboarding sequences. The thing is, creating a good onboarding sequence isn’t as easy as it seems.
To onboard new customers you need to have a very clear value proposition to show them, and a message that resonates with a particular audience’s needs. Here’s the questions we had to answer about Palabra‘s value and users when we worked on our onboarding sequences.
We think asking yourself these questions first will help you create great onboarding flows and save some time.
What are onboarding sequences?
Before we share our journey, here’s a quick definition of what an onboarding sequence is.
An onboarding sequence is a series of messages sent (generally by email) to new users or customers, with the purpose of generating a relationship with the people that receive them.
So, it’s the first action we can take to approach our users. It’s applied the very first days after a user signs up to a platform or service. And it’s oriented to retain the customers by starting a relationship with them.
The first two days after a user joins a service or starts to use a product are critical to reinforce the relationship. In some industries, up to 90% of users abandon the service a few days after they joined.
That ‘s A LOT 😧.
A great onboarding helps build loyalty to your brand and your product. Starting long term relationships reduce churn, as long as you’re getting to the right people.
The basic messages of onboarding sequences
There are some initial actions that are essential no matter what your onboarding sequence is for:
After submitting their email to a site, people expect to receive some sort of confirmation. Specially if they’re signing up for a product, or have committed to paying for it. But confirmations don’t have to be simple transactional messages, it should make newcomers feel part of something. Sending a simple welcoming message, true and personal, is what we chose for Palabra.
💌 Start a conversation
Most conversations with users begin when they have a problem and come to you for support. But with an automated onboarding sequence you can start talking to users before they have a problem. Just asking how they’re using your product, or giving them information about how to reach you when they need to, will be enough.
5 questions to help you build an email onboarding sequence 💥
At Palabra we’ve had those two simple messages since we launched, but when we started offering free trials for our paid plans, we thought of improving our onboarding so people would get a hang of our tool in 14 days.
Turns out, it was much harder than we thought. Creating an onboarding sequence meant having a really clear message to send to a very specific audience, and we didn’t have the answers to those questions yet.
So we sat down with the team and asked ourselves a series of questions in order to build a better onboarding sequence for the new users.
Here are those 5 questions. We want to make it clear that there could be as many questions as you need to ask yourself, and that this questionnaire is just to guide you on your personal journey.
1. Who are you gonna talk to?
This is probably an obvious question, but at the same time we usually lose focus about the person that we’d like to talk to.
It’s important that you think about who your user is, what they want, what they like.
A useful tool for this purpose could be to create a User persona. The User persona is a model of your ideal user, it allows you to put a name, and even a (fictional) face. We oriented our job better when feeling that we are talking to a real human being. It puts things in perspective.
Your user persona can be created from your initial hypothesis, but we strongly recommend using as much real evidence as possible. If you have a few users or prospects, try talking to them and asking as much as you can about their needs and use of your product.
At Palabra we had 10 active users when we started this process, and 5 of them agreed to have a conversation with us. We asked them about their automations, why they were using them for, and what they were lacking. If you’ve never done interviews before, here are a few lessons we learned to have real conversations with users.
2. What are they going to use your product for?
Maybe this is more like a 1.2 step, but this point is essential to design a copy that shows the benefits of your services.
For example, even if your user persona is someone who likes outdoors and your service is to rent bicycles, not everyone who likes outdoors could use that service.
Frequently, onboarding emails promote the “value” of the product or service to the users. But they do so in terms of describing the features, the pricing, the plans, etc.
That’s not bad, however is sooo generic. It reminds the reader that they’re a target and not a human with feelings, thoughts and desires 🙍♀️.
You want to propose to them your value, but do it in a way that the person who is reading the email says “oh, this is what I need for my project” or “this makes it easy to deploy this task in my life”.
3. What do you want the user to do when they join?
Once you have your user persona, and how they could benefit from your service. You could design a path that they ideally must follow to achieve the use of your product.
⚡A tool: Draw a User Flow!⚡
A User Flow is a map that’s used to design the structure from a web site or an app. Probably you already have a clue about this thing. Whimsical is a good website to draw one.
Put yourself in the shoes of the customer. Make it easy for them to find your features, that will encourage the use of your service and the engagement.
This question is also easier to answer once you’ve talked to your users or even seen them interact with your product. We use Fullstory and Cohere.so to understand what people are actually doing in Palabra, and create our ideal user flows trying to make them as realistic as possible.
4. What level of engagement does the user have?
The previous step should be your starting point, but every person is different.
We usually think of the ideal user and the ideal path for that ideal user. Now it’s time to think in different levels of engagement and to think of something we like to call “the anti-user”.
Meditate which are the points that could drive away the users or make them inactive. Why would they stop using your service? 🤔
Use that knowledge to create different onboarding sequences to connect with different levels of engagement. For example, you can trigger an email if a user is inactive or never answered your emails.
You don’t need to do this right away, you can develop this step over the time. The previous steps should work to connect with people and encourage feedback from the active users.
5. In what tone do you want to address your readers?
This is more of a copywriting and graphic design question, but since we’re planning an email strategy it’s kinda the whole point.
This is the stage where you can personalize the message that you deliver. And that’s why it is important to resolve the first four questions. Otherwise, how could you personalize something you don’t know anything about?
Have you thought about whether you want to address your customers informally or formally? or if you want to use plain text or HTML emails? 🤷♀️
Our personal choice was to deliver plain text emails with an informal tone. Because to our users this gives a familiar or friendly vibe💖 rather than a corporate one👔. And plain text helps to achieve that goal.
Each question is hard in its own way, but they are all worth answering. The result will be an unique and authentic email onboarding sequence. And that’s something people value.