What Is Product Adoption and How Do You Increase It for Success

Most definitions of product adoption stop at "users start using the product to reach their goals". What they leave out is a rule you can test: when, exactly, does a user count as adopted? This post uses one. A user has adopted your product when they repeat its core action on the schedule the product is meant to be used, for example in at least three of their first four weeks for a tool people use weekly. Every metric below is built on that rule, including a corrected version of the adoption rate formula, because the version that circulates most (new users divided by total users) measures growth, not adoption.

Wake up. Eat. Sleep. Repeat. The products people adopt end up in that routine: for many of your customers, the SaaS product they use at work is on every day's to-do list. The more they succeed with it, the higher your product adoption rate, and the more it works as a ladder towards customer success across the whole customer journey.

What is product adoption?

Product adoption is the process by which customers get to know your product and become regular users because of the benefits they get from using it. Those benefits show up as users learn the features that serve the goals they had when they started onboarding.

Users who start reaching their goals get more value from the product, and it doesn't take them long to notice it. That alone is a reason for product teams to invest in the adoption process.

Product adoption also feeds feature adoption. Regular users are motivated to explore: when a new feature launches, they're quicker to try it and decide whether it helps their main objective. If it does, your feature adoption rate rises because people actually use new features instead of leaving them be.

What are the five stages of product adoption?

The five stages of product adoption are awareness, interest, evaluation, trial and adoption. They come from diffusion research in rural sociology and were popularised by Everett Rogers in 1962; the product adoption curve covers the other half of his model, the five types of adopters.

In a SaaS product, each stage maps to a part of your funnel:

Onboarding covers evaluation and trial, which is why it has the most influence on whether trial turns into adoption.

Why is product adoption key to your growth?

Product adoption is what turns acquisition spending into retained revenue. After a launch, every team, from marketing to customer success, works on the same aim: acquiring potential customers and turning new ones into loyal customers. Improving the product experience increases product usage, which does both and lowers customer acquisition costs at the same time.

Adoption and retention walk hand in hand. Active users stay to check new features and use the product regularly to meet their objectives, so a high adoption rate comes with a high customer retention rate and a low churn rate.

Higher adoption also raises customer lifetime value (CLTV). The usage data it produces lets you separate customer segments and invest where satisfaction depends on it, and the longer customers stay, the stronger the relationship gets. All of it leads to revenue, the backbone of growth in SaaS.

How do you know when a user has adopted your product?

A user has adopted your product when they've performed its core action repeatedly, at the frequency the product is meant to be used, within a window you set in advance. Writing that rule down before you measure anything stops every team from using its own definition.

Three choices make up the rule:

1. The core action. The action that delivers your product's value, not a setup step: sending an invoice in an invoicing tool, publishing a design in a design tool, running payroll in a payroll tool.
2. The cadence. How often a satisfied customer does it. A chat tool is daily, a project tool weekly, a payroll tool monthly.
3. The window. How long after sign-up you check. Long enough for the cadence to repeat a few times, short enough to act on.

Put together, the rule reads like "sent at least one invoice in three of their first four weeks" or "ran payroll in two consecutive months". Signing up, finishing a product tour or logging in daily without doing the core action doesn't count.

How is product adoption measured?

There isn't one direct measure, so track three metrics built on your adoption rule. Calculate each for a fixed period or a sign-up cohort, never all time.

1- Adoption rate

Adoption rate is the share of a sign-up cohort that meets your adoption rule.

Adoption rate = users in the cohort who meet the adoption rule ÷ users who signed up in the cohort × 100

Say 1,000 people signed up in March and 220 of them meet your rule by the end of April: your March adoption rate is 22%. The formula you'll often see instead, new users ÷ total users, tells you what share of your user base is new. With 200 new customers out of 1,000 in total, that's 20%, but it says nothing about whether any of them adopted. Use it as a growth measure.

You can run the same calculation for a single feature, with the feature's key action in place of the product's.

2- Time to first key action

Time to first key action is how long it takes a user to perform a key action for the first time. Measure it as the median time from sign-up (or from a feature's launch) to the first key action; the median isn't thrown off by the few users who come back months later.

It works both ways: the time it takes new users to try an existing feature, or existing users to try a new one. Choose key actions that deliver value to the user and that you're actively promoting, not navigation clicks.

3- First-use rate of a core function

The first-use rate is the share of new users who perform a core function for the first time within a set period.

First-use rate = new users who performed the core function for the first time in the period ÷ new sign-ups in the same period × 100

In an online store, purchasing is the core function and the period might be a month. Compare months to see whether changes to onboarding move more new users to their first purchase, and then track how many buy again, which is where adoption starts. For the onboarding-specific metrics around these three, see user onboarding metrics.

How do you increase product adoption?

Tracking the metrics is the start; these five levers move them.

1- Perfect user onboarding

In software, everything starts with user onboarding. People arrive from your marketing, sign up on your site, and then the onboarding flow has to make them stay. Segment it so each type of user sees the path to their own goal, and keep it short enough that they reach the product's value in their first sessions.

2- Look for aha moments

Whatever format your onboarding takes, it has to lead users to their aha moments: the points where they see what the product does for them. Each aha moment should sit next to a key activation point, so the realisation turns straight into the core action your adoption rule counts.

3- Improve the product

Sometimes you know how to sell but lack the product that would sell. Find the gaps in two ways: collect regular user feedback with in-app surveys, and ask the people who churned why they left. Then agree as a team which problems to fix first.

4- Make customer support easy to find

Support teams and help centres are where users go when they have a question, so they shape adoption more than they seem to:

• Make the help centre easy to find in the user interface.
• Offer videos, chat and guides that solve the common problems.
• Hire representatives who can help without passing users around.

5- Promote your own features

Even satisfied users can drift away when they need help fast or a competitor's offer sounds better. Keep reminding them of the value they get by promoting useful features inside the product, with short, well-timed announcements. Our guide to new feature onboarding covers the patterns, and the product adoption examples show how well-known products did it.

Product adoption is user retention's best ally: it changes how users see your product, from something they signed up for to something they use. Define the rule, measure against it, and every SaaS team can see whether its work moves the number.