Reddit Ads onboarding tear down
More notifications, less newsletter
In this issue of The Revenue Architect I dive into onboarding email sequences for self-serve products, highlighting the common mistakes that companies make, what they should do differently and tear down the first ten onboarding emails for Reddit’s self-serve ads product as a real-world example.
An onboarding email sequence is a key component of the GTM for a self-serve product as, when done well, it helps new users who failed to reach the first value milestone get back into the product and try again.
However, most vendors (including Reddit Ads) lose sight of this objective and make one or more of the following mistakes with their onboarding emails:
Not driving to a first value milestone
Prematurely upselling
Overloading with unnecessary information (aka the newsletter trap)
Not driving to a first value milestone
A universal problem across self-serve products is having a low conversion rate from creating free account to becoming a paying customer. The #1 reason for this is that users fail to reach the product’s first value milestone during onboarding and give up. If you don’t define your product’s first value milestone and don’t drive your users towards it, you won’t improve your conversion rate.
Every product has a first value milestone — that aha moment when the user sees the the first signs of the outcome they were hoping for. It’s usually the first time the user completes your product’s core use case.
For example, in Reddit Ads its getting impressions and clicks on your first ad campaign, in Calendly its scheduling your first meeting, in Amplitude its seeing user engagements tracked in your dashboard, in Copy.ai its drafting your first piece of content.
While an intuitive onboarding UX is essential to helping users reach first value, the reality is many new users create an account only to realize they aren’t ready to actually use the product yet, or find the amount of work they need to do to get started is overwhelming in the moment, so they bail out of the product.
This is where the onboarding email sequence should come in and help the user with notifications contextualized to the customer’s progress, akin to an abandoned shopping cart email. However, many onboarding sequences (including Reddit’s) lose sight of driving to first impact and in doing so fail to help their customers.
My favorite example of getting users to a first value milestone is Facebook. As an early-stage company (in 2006), they discovered that new users who added 7 friends in 10 days were far more likely to remain engaged with the product than those who didn’t — because having 7 friends meant you were likely to see new content in your newsfeed each time you came back.
Once Facebook figured this out they focused the onboarding email sequence entirely on getting new users to log back in and add as many friends as possible in their first 10 days. If you signed up for Facebook during that era you’ll remember how relentless they were and how you ultimately turned off the notifications once you became an active user. You unsubscribing from their notifications meant that they had been successful in getting you to first value.
Prematurely upselling
I’ve yet to see a onboarding sequence that doesn’t try to entice you from free to paid with a time-limited discount, in much the same way that a salesperson lobs discounts at a buyer to get them to sign by the end of the month.
The problems with this approach (as studies have shown) are twofold: offering a prospect a discount is pointless unless their sole remaining objection is price and telling a prospect their free trial is about to end is pointless if they haven’t started using the product yet.
I’ve also yet to see an onboarding sequence that doesn’t try to sell you on trying out power user features in a higher subscription tier before you’ve even started using the product at a basic level. Introducing complicated use cases too early in a self-serve customer journey just creates confusion and gets ignored.
Overloading with unnecessary information (aka the newsletter trap)
This mistake is similar to feature dumping in a sales-led motion, where a salesperson goes on a monologue about all their cool product features instead of providing their prospect the specific information needed to solve their problem.
In an onboarding email sequence this manifests with things like sharing blog posts, new feature releases and seasonal promotions. I call this “the newsletter trap” because its feels like I’ve been added to a general distribution list for a company newsletter (which is actually what happens most of the time).
The problem with this is that newsletters are not a good way to onboard someone onto product. People don’t need an endless stream of new content during onboarding. They need the opposite. They need to be helped towards the first impact milestone, which requires repeating the same thing over and over again until it gets done and becomes a habit. Anyone who remembers Facebook's onboarding in 2006 will tell you that they were relentless about getting you to add new friends.
This is why its often better to have your onboarding sequence owned by your product team rather than your marketing team, so the emails can be contextualized to where the user is relative to the first impact milestone.
Using Reddit Ads as an example
I’ve used Reddit Ads as an example because its a self-serve product that’s been around for several years, is doing some things well but still has a lot of room to improve — most of Reddit’s $800M ads revenue still comes through a sales-led motion. I also understand their use case quite well from having built self-serve ad products at several companies earlier in my career.
To evaluate Reddit Ads’ onboarding email sequence, I created an account on February 1st 2024, started creating a campaign, abandoned the process and waited to see what happened next. Here’s the sequence of onboarding emails I received: