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

I will explain what product adoption is, why it is of high importance, the metrics to calculate it, and how to improve it in this article.
Category
User Onboarding
Written by
Serra Alban
Published on
August 1, 2022

Product adoption involves customers getting to know your product or service and becoming regular users due to the benefits they reap from using it on a regular basis. These benefits will come to light as soon as the users get more familiar with your product's features to achieve the goals they set at the beginning of the onboarding process.

Wake up. Eat. Sleep. Repeat.

This is the daily life routine for many of us.

Yet, there are different expectations from each day. To reach good results and have a productive day, we add new goals to the list and subtract some, considering the needs and goals of the respective day.

For example, vacuuming might not be a regular action, BUT I know exactly what wants to be on every customers' daily to-do list and why. 

It is the very specific SaaS product they use.

Because the more customers get to succeed in doing through the product, the higher the product adoption rate—which is positioned as a ladder that reaches customer success throughout the whole customer journey.

That is why I will explain what product adoption is, why it is of high importance, the metrics to calculate it, and how to improve it in this article.

What is Product Adoption?

Product adoption involves customers getting to know your product or service and becoming regular users due to the benefits they reap from using it on a regular basis. These benefits will come to light as soon as the users get more familiar with your product's features to achieve the goals they set at the beginning of the onboarding process.

Without a doubt, the users who start achieving their goals will derive more value from the product or service, and it will not take them long to notice the real value lying within it. This alone can stand as a reason why the product teams should invest in the product adoption process.

Still, it is not the only reason this process is highly regarded for every software product out there. It is also due to the fact that as one user realizes the worth of your product or service, the chance of getting one more regular user rises—which takes us to another topic: feature adoption.

These regular users will be motivated to explore more. So, once a new feature launches, they will be rather apt to try and decide whether it could be a fit for achieving their main objective. If all goes to plan, this action will increase your feature adoption rate since your users will be actively USING the features of your product or service once they come out instead of leaving them be.

If all of the information above is divided into parts and named, we get to see the stages of product adoption in order: awareness, interest, evaluation, trial, and adoption.

Why is Product Adoption Key to Your Growth?

After the product launch, each department, from the marketing team to the customer success team, tries their best to boost growth in their own way.

No matter how different practices they put to use to reach their collective aim, one particular act that they all commit to unites them: acquiring potential customers while turning the new and current customers into loyal customers.  The safest way to pull this off (and lower customer acquisition costs at the same time) is to enhance the product experience since it will amp up product usage as a result.

This result has an outcome that every software product is after: a high customer retention rate. This is due to the fact that the active users stay around to check the new features and turn the product inside out by using it regularly to meet their objectives. Basically, product adoption and retention walk hand in hand to support the user journey. Thus, this collaboration ends with a low customer churn rate as these terms are directly related.

Another advantage of improving product adoption is an increase in customer lifetime value (CLTV)—which enables you to separate customer segments and invest in the correct areas to maintain customer satisfaction by providing you with the data needed. Also, the longer the time period you spend with your users, the stronger the bond between you and your current users. 

All of the elements above lead to revenue, the backbone of growth in the SaaS industry. Many other items help boost growth; however, there is not one that works as efficiently as product adoption strategies that are embedded throughout the user experience since they get to introduce your product or service with its key actions that will make the users achieve their goals in the long run while proving its real worth to your users by improving the customer experience.

How is Product Adoption Measured?

Unfortunately, there is not ONE direct way to measure it. Therefore, you will need to benefit from a few product adoption metrics that will help you see your business's current situation and make decisions according to the results afterward.

These are the three key metrics that you need to keep track of in order to observe how good your innovative product is when it comes to product adoption:

1- Rate of Adoption

This one is basically the percentage of new users against the total users.

The formula for adoption rate is: Adoption rate = the number of new users x 100 / number of total users. 

Let's assume that you have gained 200 new customers this month, making it 1,000 customers in total. Your adoption rate is: (200 x 100) / 1,000 OR 200/1,000 = 20%.

You might utilize this metric for a particular feature or a product, but keep in mind that you should calculate it for only a specific time period to obtain correct data and make use of it efficiently.

2- Time-to-First Key Action

This metric measures how fast your users are adopting your features overall. It goes both ways when you calculate the average time; you might use it to calculate the time it takes for your new users to try an existing feature or for your existing users to explore a new feature for the first time. 

To nail this measurement, you must select your key actions properly. During the selection process, try to focus on the actions you try to promote to your users, e.g., a key feature that is valuable to both parties would do the trick, such as clicking on the navigation button after landing on the homepage. 

3- Percentage of Users Who Used a Core Function for the First Time

This metric differs slightly from the one above since it requires a core function to be carried out within a specific time period for the first time. You might take it to the next level by calculating the number of people who have performed a core feature for the first time to the number of total new signups. 

For example, purchasing products is a core feature that can be calculated monthly. Therefore, you can utilize this metric to spot how many people buy at least two products each month and compare the data you obtain to make healthy observations for each meeting regarding the product adoption process. 

5 Ways to Significantly Improve Product Adoption

Keeping track of the metrics above regularly is a nice start, but there is a lot more that you can do to drive product adoption to the next level. 

1- Perfect User Onboarding

In the world of software products, everything starts with user onboarding.  

This leaves you with only one option: investing in user onboarding. Keep in mind that your potential users will open their eyes to marketing campaigns, then go over your site to sign up. Onwards, you must make sure that the onboarding flow is well-prepared to make them stay and works for everyone, thanks to the user segments. 

The onboarding experience for each user must run smoothly so that they can achieve peak efficiency when working towards their goals and realize your product or service's value in the shortest time possible.

2- Look for Aha Moments

One of the things you must thread delicately is the items that will appear in the onboarding flow of your product or service. How you address these items or how you display them might change, but one thing is for sure: You must find and include Aha! moments

These moments will mark what your product offers to users and lead them to the key activation points that will show them how to derive value from the product or service effortlessly through regular use. This step gives users insights into the product's benefits during the product adoption process as well.

3- Product Improvements

Sometimes you know how to sell but lack the product that would sell. 

At times like this, what you have to do is simply find out the areas you lack. There are two ways to discover the problems your users are having: getting regular user feedback via surveys and reaching out to the people who churned to understand their reasoning. 

After collecting the data, your team should gather and discuss the actions to be taken to carry the product adoption to success through user experience.

4- Customer Support

At first, this might not seem like an important deal for product adoption, but customer support teams and help centers are two devices that play a big role due to being the only places users can get more information regarding the questions they have in mind. 

Fortunately, there are a few simple steps you can take towards better support:

  • Make sure that your help center is easy to locate on the user interface (UI).
  • Provide your users with videos, chat widgets, and guides that would solve their problems. 
  • Have capable and well-mannered representatives who can easily assist the users without further troubling them. 

5- Promote Your Own Content

Even though your users might think that they are happy with the value they get from your product or service, there are times when they are prone to be swept away easily, such as the times when they need immediate assistance or when the offers from the competitors sound sweet to their ears.

Therefore, it is always important to be on guard and promote your beneficial features to remind them of the real value of your product or service and gently push them to utilize them so that they do not switch thinking that they can no longer achieve more by using your services.

Conclusion

User retention's number one supporter is product adoption, undoubtedly. 

It clears the way for a better understanding of your product or service in your users' minds, and it is able to change the way your product is seen through your users' eyes in terms of functionality.

Thus, each and every SaaS company needs to make use of this concept to step up their game.

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