Product Adoption: 5 Strategies To Drive Adoption in SaaS

Product Adoption: 5 Strategies To Drive Adoption in SaaS

Want to accelerate your SaaS product but don’t know how to drive adoption?

Product adoption isn’t complete until users adopt all the features they need to achieve their goals. As different customer segments adopt your product at different stages of its lifecycle, it is essential to select your product adoption strategies carefully.

So, let’s see what you can do to improve feature adoption and ensure a high customer retention rate.

TL;DR

  • Product adoption occurs when customers invest in your product without looking for alternatives to achieve their goals.
  • Adoption increases customer retention, reduces churn, and increases monthly recurring revenue.
  • Product adoption rate measures the percentage of signups who adopt your product and become regular, active customers.
  • In the SaaS industry, the median activation rate is 17%, while the median user growth rate is 4%.
  • Time to value, activation rate, feature adoption rate, and product stickiness are the four key product adoption metrics.
  • Welcome screens allow you to segment customers to provide personalized onboarding experiences to each of them.
  • Checklists break down complex tasks into simpler ones to guide users to activation points faster.
  • Tooltips concisely highlight new features while customers use the product.
  • Resource centers provide in-app self-service support so that users are empowered to self-diagnose and solve their own issues quickly.
  • A/B testing various versions of in-app experiences let you assess their effectiveness in driving adoption.

What is product adoption in SaaS?

Product adoption, also called user adoption, is the key to a successful product. It takes place when customers decide to invest in your product without seeking alternative solutions to meet their goals.

It’s the customer journey from the initial AHA moment, when users realize your product’s expected value, to the active use of the product because they get actual value from it.

Why is product adoption important?

Product adoption is the opposite of churn because customers who have adopted your product completely stick with it. Therefore, it leads to lower churn and higher retention, which ultimately helps to grow the business sustainably. High retention can lead to increased loyalty, turning your customers into power users.

For subscription-based business models, it’s very important to maintain activation by making users experience value each time they use a feature for the first time. In fact, it can cost 5-10 times less to upsell to existing customers than to acquire new ones. This helps boost your customer lifetime value as well as your monthly recurring revenue.

How to calculate the product adoption rate?

The product adoption rate measures the percentage of signups who adopt your product and become regular, active customers. Thus, to calculate this metric, divide the number of active users by that of signups, and multiply the ratio by 100.

For example, if 1,500 users sign up for your product in a given month and the number of active users by the end of that month is 500, your production activation rate is:

(500/1,500)*100% = 33.33%

Product adoption rate
Product adoption rate

Product adoption benchmarks

Is your product adoption rate up to the mark? You can find out by checking some SaaS industry benchmarks and comparing the figures. Adoption depends on user activation, leading to growth. To illustrate this, let’s look at Mixpanel research:

  • Activation rate: This is the rate at which users complete a key action in their first week. The median rate stands at 17%, whereas the 90th percentile rate is 65%.
  • User growth rate: This is the month-over-month growth rate in weekly active users, with the median rate being 4% and the 90th percentile rate being 72%.
Source - Mixpanel
Source – Mixpanel

What are product adoption metrics?

Before we dive into the strategies to drive adoption, let’s see what metrics you should measure to evaluate their success.

Time to value

In SaaS, time to value is the time taken by a user to reach the AHA moment and start getting value from the product. The shorter the time to value, the better because customers expect to begin benefitting from your product right away. A shorter TTV reduces churn and improves retention.

time-to-value-drive-adoption.PNG
Time to value

Activation rate

The activation rate is a measure of how many new users reach the activation point by performing the key events that help them experience value.

You can calculate it by dividing the number of users who reached the activation point/milestone by the number of users who signed up and multiplying the result by 100.

activation-rate-drive-adoption.png
Activation rate

Feature adoption rate

As customers discover more features that add value and adopt them, they are more likely to stick around. The feature adoption rate is a measure of how many customers benefit from this approach.

To know this rate, divide the number of feature monthly active users by the number of user logins in a specific period, and divide the result by 100.

feature-adoption-rate.png
Feature adoption rate

Product stickiness

The more value-adding your product is, the sticker it will be. Sticky products lead to greater customer retention and, thus, more revenue growth.

To measure product stickiness, find the ratio of the number of daily active users to the number of monthly active users. A high stickiness ratio means that your product engages your customers, so they return to use it frequently.

DAU to MAU ratio
DAU to MAU ratio

5 strategies to drive product adoption in SaaS

Now that you know the four key product adoption metrics, you can analyze customer data and feed the insights into your overall product adoption strategy. Here are 5 strategies you can use to drive adoption by providing more value to customers.

Use welcome screens to personalize the onboarding process

Welcome screens are a great way of personalizing the user onboarding experience. Apart from greeting users with a personal touch, welcome screens serve to onboard them contextually. And personalized onboarding is an extension of contextual onboarding.

Contextual onboarding involves using the product itself to guide customers as they use it. By tailoring the onboarding experience to each user’s current position in the product adoption curve or stage in the adoption process, you can turn loyal users into brand advocates.

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Kontentino’s welcome screen

Therefore, you can use welcome screens to segment users based on their different user personas and use cases. This way, every group gets its own personalized onboarding flow.

As shown in the example above, Kontentino uses a micro survey in the second part of their welcome screen to understand user goals.

Use checklists to drive users to the activation point

A useful element for contextual onboarding, checklists are a set of steps that guide users on completing simple tasks that would lead to additional value.

While you can use them at different stages of the user journey to improve feature adoption, you can also use them to help users reach key activation points faster.

Contextual onboarding relies on specific triggers set up inside the product. Once the triggers are fired, the in-app messages are displayed to the user. A trigger could be, for example, a click on a particular button or a visit to a specific page.

Keep your checklists simple and easy to understand. You can also add a call-to-action button to prompt users to activate. They allow you to give users a head start on achieving a goal. When users finish one task on a checklist, it motivates them to progress to the next step.

Moreover, you can add a progress bar to your checklist, as in the Loom checklist example shown below.

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Loom’s checklist

This comes in handy especially when the checklist is long, which can be overwhelming for some users. So, the progress bar not only clearly indicates how much work is left but also encourages users to keep moving forward.

Use tooltips to highlight relevant features

Tooltips are yet another means of contextual onboarding. They provide advice to users on how they can improve the processes they are now working on.

As opposed to emails that take users away from the product, tooltips provide in-app guidance like checklists. When triggers are fired, tooltips provide targeted, real-time support to help users adopt more features.

A native tooltip is one that becomes a part of the product’s native UI. They don’t require customers to pass through a complicated experience flow to be triggered. Hence, they are best for displaying elements that are quite straightforward.

For instance, you could use a native tooltip to subtly help a user when they scroll over a relevant feature or to point out and explain a less apparent UI element.

The example below shows Ahref’s tooltip that expects a certain pain point regarding the site’s web protocol. It concisely suggests a useful feature that would help users switch between available options and thus reach their desired goal more easily.

ahrefs_advanced_feature_tooltip.png
Ahref’s tooltip

Provide self-service support to help users get instant answers

In-app self-service support is timely and contextual. It provides users instant answers when they need them the most.

Self-service onboarding elements like welcome screens, micro surveys, and widgets display themselves when a user lands on a page for the first time. In addition, a help center helps answer customer queries and solve repetitive issues.

Therefore, users don’t always need to wait for support agents. They feel empowered and accomplished by solving their own problems by visiting the help center. Furthermore, support agents have to deal with fewer support tickets, giving them to focus on more pressing matters.

Help centers scale well over time because you keep adding more relevant content as your SaaS business grows. You can then call them resource centers since they are typically more intuitive and house more types of content than traditional help centers.

Here is Userpilot’s resource center that comes with:

  • Open chat option
  • Link to the knowledge base
  • Idea sharing
  • Status check
  • FAQs, and more!
resource-center-Userpilot-drive-adoption.png
Userpilot’s help center

A/B test your in-app experiences to improve product adoption

How to know whether your in-app experiences are performing the way they should? You need to conduct product experiments in order to test the efficacy of these experiences.

For instance, you can run an experiment to see if your checklist’s progress bar worked properly or if the tooltips got triggered at the right time and what the results were.

You can do so by A/B testing the in-app experiences. Suppose you want to assess the impact of the welcome screen. Divide users into two groups to carry out the experiment.

  • Welcome screen – This is the group you show the welcome screen to provide information on getting started and segment users.
  • No welcome screen – This is the group that is greeted only with a dashboard.

If the result shows that a welcome screen causes a marked improvement in adoption, you go forward with it.

a-b-testing-userpilot-drive-adoption.png
A/B testing in Userpilot

3 best product adoption tools

To execute your product adoption strategies, you need the best software to onboard users and drive adoption.

Let’s go over the 3 best product adoption tools out there:

  • Userpilot
  • Appcues
  • Walkme

Userpilot

Userpilot is a product growth and onboarding tool. Its visual interface lets you create any UI pattern or onboarding experience readily, without any code!

welcome screen Userpilot
Welcome screens in Userpilot

Userpilot requires you to only download a Chrome extension and install a JS snippet across your website, which is easy for a non-technical user as well.

Then you can personalize the onboarding process and build welcome screens, tooltips, checklists, micro surveys, in-app resources, and more – all code-free.

Userpilot’s advanced analytics enable you to define goals and monitor their progress. Thus, you can see how the in-app experiences impact feature adoption and other product metrics.

Moreover, Userpilot is one of the few software that allows you to A/B test onboarding experiences. Its experimentation functionality can help you achieve your target product adoption rate and other growth goals.

Userpilot also supports customer segmentation based on multiple criteria like web sessions, NPS, engagement level, and custom events.

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Customer segmentation in Userpilot

Appcues

Appcues is a growth platform that allows you to build personalized product experiences without coding. The experiences are tailored to the specific needs of target groups, which help boost adoption. You also receive detailed reporting on the effect of these experiences on key customer segments.

However, its linear onboarding feature restricts its capability to improve user activation. Plus, the native styling options are limited, with full control relying on CSS coding.

Walkme

Walkme is a digital adoption platform. Its context-intelligent algorithm digs out customer needs and offers the most useful onboarding flows. It’s more popular among enterprise-level businesses with its huge collection of features.

However, it’s one of the most expensive adoption tools and may provide more than what smaller companies can actually use.

Wrapping it up

It’s critical to maintain a good product adoption rate, yet it’s not easy. It requires a combination of the right metrics, effective strategies, and the right adoption software.

Welcome screens, checklists, tooltips, resource centers, and A/B testing are the top elements you can have to drive adoption.

Want to create product experiences code-free? Get a Userpilot demo and see the results for yourself.

 

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