The Product Adoption Curve in SaaS: What Is It and How To Use It In Your Product Strategy

The Product Adoption Curve in SaaS: What Is It and How To Use It In Your Product Strategy

Imagine trying to convince your grandma to start using Snapchat before your 16-year old sister or niece. It seems impossible, right? Both of them may become Snapchat users eventually but the 16-year old is more likely to adopt it sooner. And that’s because of the Product Adoption Curve.

The Product Adoption Curve shows how a product is adopted through multiple segments of the market. Understanding this lets you craft a product marketing strategy for every stage of product adoption. It’s your best shot at getting widespread use for your new innovation.

Read on to find out how to use the Product Adoption Curve to your advantage.

TL;DR

  • The Product Adoption Curve illustrates when each customer segment is most likely to adopt your product so you can make the most of each stage of your product’s growth.
  • The five stages of the Product Adoption Curve are: innovators, early adopters, early majority, late majority, and laggards, with a chasm between the early adopters and early majority.
  • The Product Adoption Curve is crucial in helping product management to understand how to tackle the chasm between early adopters and the early majority.
  • For product marketing, the Product Adoption Curve is key to understanding the shift in messaging that’s required to cross the chasm between early adopters and the early majority.
  • You can improve product adoption among each segment of the Product Adoption Curve based on their characteristics and what they look for in a product.
  • Userpilot’s resource center capability is the perfect way to create convenient support docs to help your users better adopt your product.
  • Heap’s Illuminate feature is ideal for automatically identifying additional necessary steps in your user experience to increase product adoption.
  • FullStory’s session recordings help you collect qualitative data on how your users are interacting with your product so you can identify opportunities for better product adoption.

What is the Product Adoption Curve?

The Product Adoption Curve illustrates how different customer segments adopt a new product at different stages of a product’s lifecycle. It originates from a theory developed by Everett M. Rogers, who argues that there are five distinct stages for the Product Adoption Curve:

Product Adoption Curve userpilot illustration

The Product Adoption Curve

The Product Adoption Curve is shaped like a bell curve because markets adopt new products non-linearly. Product adoption starts slowly because the innovators are the smallest segment. Product adoption then speeds up through the early adopters and early majority. Finally, it decelerates toward the end of the product’s lifecycle where the late majority and laggards are.

Research shows that most 20th-century products followed this adoption behavior:

Product adoption behavior for 20th century products

Source: The Atlantic “The 100-Year March of Technology in 1 Graph

Let’s now take a look at the different stages of the Product Adoption Curve.

The five stages of the Product Adoption Curve

The five stages of the Product Adoption Curve are:

  1. The Innovators
  2. The Early Adopters
  3. The Early Majority
  4. The Late Majority
  5. The Laggards

The order of the stages matters. Think of it as a five-course meal—you have to go in order if you want to stuff as much as possible into your belly (or capture as much of the market as possible.)

There’s just one catch. There’s a chasm between the second and third stage according to Geoffrey A. Moore, author of Crossing the Chasm. It’s due to a fundamental difference between what the early adopters and the early majority want in a new product. Crossing the chasm is hard, but necessary for mainstream adoption.

product adoption curve with chasm

The Product Adoption Curve with the chasm

Before we peer into the charm, let’s take a closer look at the different stages of the Product Adoption Curve.

Product Adoption Curve STAGE 1: The Innovators

The very first adopting segment is the innovators, who make up just 2.5% of the market. They’re technology enthusiasts and are usually quite technical.

A great example of an innovator is my friend Yousef. He’s an electrical engineer living in a bachelor pad littered with all kinds of new technological inventions and contraptions. He loves trying new technology for the sake of it. Once he’s done playing with a new piece of technology, he simply chucks it somewhere in his apartment and moves on.

Innovators don’t care too much about bugs or missing features. They’re risk-takers and care about being the first to try an unproven product. This makes them a great source for early feedback.

However, their enthusiasm is fleeting because they move on quickly. So they won’t pay premium prices and prefer to try products at a discount or for free.

Product Adoption Curve STAGE 2: The Early Adopters

Next up are the early adopters, who represent 13.5% of the market. Unlike the innovators, they’re trying to solve a real problem and have access to capital for innovation. They’re often thought leaders in their space and look for disruptive innovation.

Think of early adopters as the yuppies rocking AirPods in 2016 back when the idea of wireless headphones was anxiety-inducing.

Person wearing Apple AirPods

A person wearing Apple Airpods

Photo by Dugba Cauley-Hushie on Unsplash

As visionaries, early adopters are easy to convince there’s a better way. But they’re not quite as risk-loving as innovators and need positive reviews from innovators before adopting new products.

Since early adopters are trying to solve a real problem, they’re less tolerant of technical issues or missing features. They need more support and expect a lot of customization, all of which makes them rather demanding.

Product Adoption Curve STAGE 3: The Early Majority

The early majority make up a whopping 34% of the market. But unlike early adopters, they like business continuity and don’t want to pioneer new technology. This is a big shift in attitude and exactly why the chasm exists.

The early majority is also slower at making decisions and prefers to let others thoroughly test new products. They rely on good references from those who’ve had success with a product before deciding to buy it.

The challenge is that they mainly communicate with each other and less with early adopters. This is frustrating, especially since early adopters are the very segment that’s best able to provide them with positive references! As a result, this is where many product innovations fail, according to Moore in Crossing the Chasm.

Once you do cross the chasm, you’re rewarded with a loyal customer base and a sign of product/market fit. It’s also where you have the greatest potential for growth and an increase in market share.

Product Adoption Curve STAGE 4: The Late Majority

The late majority, which makes up 34% of the market, is next to adopt a product. Now we’re at the peak of the Product Adoption Curve, where the early majority and late majority intersect. Things start to slow down a little here.

Consumers in the late majority are conservative. They don’t actively seek out change because failed innovation can be quite costly to them. They also don’t have big budgets for new products.

Although they don’t like change, they recognize failing to adopt popular products can put them at a competitive disadvantage. And they don’t like that. So they adopt new products out of necessity, not curiosity. But only ones that are tried and tested well.

An example of this is a small business putting itself on Google Maps so it doesn’t lose business to competitors already on Google Maps.

Product Adoption Curve STAGE 5: The Laggards

An older person using an iPhone and diva light

New technology tends to be adapted by laggards last

Photo by MART PRODUCTION from Pexels

Laggards are the last adopting segment and make up 16% of the market. They’re usually older and less comfortable with technology. For this reason, they value traditional ways of doing things.

As skeptics, laggards resist change more than any other segment. They’ll eventually cave but only when not using a new product makes life unbearably difficult for them. Or once their traditional alternatives are no longer available or acceptable.

A great example of a laggard is my old man. He finally gave in to buying a pair of Sketchers in 2021. But – only after watching my mother and I flaunt these shoe-pillows for over fifteen years.

When laggards finally come on board, a product is already in decline. But they’re no small segment, making up as much of the market as innovators and early adopters combined. Ignoring them may rob you of a decent amount of revenue and market share.

The implications of the Product Adoption Curve for Product Management

As a product manager, you must be able to understand where every customer is on the Product Adoption Curve. But most importantly, you need a clear picture of the user persona for your early adopters. They’re the most value-sensitive group and the first segment to use your product to solve a real problem. Pleasing them is critical if you want to put your product on the trajectory for product/market fit.

The best way to gain an understanding of your early adopters is to conduct detailed customer discovery interviews. Focus on their particular use case and the specific problem they’re trying to solve. As the gatekeepers of innovation, they’re notoriously difficult to please. However, pleasing them will prove the value of your product and win you the influence of their thought leadership.

The five drivers of innovation adoption

There are five drivers of innovation adoption according to Rogers’ Diffusion of Innovation model:

  1. Attributes of the product innovation
  2. Decision-making process for innovation adoption
  3. Social system and social norms that enable or impede adoption
  4. Communication channels
  5. Promotion efforts

The first driver is most relevant for product management. So let’s unpack it by taking a look at how Rogers breaks down product innovation into five subfactors.

Rogers’ five subfactors of product innovation

1. The product’s advantage: how the product improves customers’ lives (the value proposition.) This usually involves saving customers time or money, reducing inconvenience, or reducing danger, among many other things.

2. Product compatibility: how well a product fits into users’ existing behavior. Things like switching costs or having to educate users on a new workflow can negatively impact adoption.

3. Product complexity: the time and effort it takes users to get value out of a product. This could include making installation and configuration easier or customizing the experience for new users, regular users and power users.

4. Product trialability: how easily users can try a product before they buy it. This could be either through a freemium model, a free trial, or a proof-of-concept demo.

5. Product observability: whether users are able to observe others get value from the product. This may include branded banners on freemium products or customer success stories.

Taking all these subfactors into consideration increases your chances of developing a product that’s successfully adopted by the market.

A word of caution from Moore in Crossing the Chasm: don’t fall into the trap of giving in to the early adopters’ every demand. You’ll end up developing a relatively custom product that can’t be used by other customers.

The implications of the Product Adoption Curve for Product Marketing

As a product marketer, you need to learn as much as possible about the user persona at every stage of the Product Adoption Curve. It’ll let you carefully tailor your go-to-market strategy for every segment. You can then build in-app onboarding experiences for every segment and monitor how they’re adopting your product.

The goal of a product marketer is crossing the chasm between the early adopters and the early majority. You need to swiftly pivot your messaging from how your product is a “change agent” to how it’s a “productivity improvement”, according to Moore in Crossing the Chasm.

How to improve product adoption for your SaaS at each stage of the Product Adoption Curve

How to improve product adoption among the innovators

Throw an early version of your product to the innovators before perfecting it and use the insights for product development.

Focus your value proposition on how your product is unique and give these innovators free trials and discounts. Creating a sense of exclusivity works well for this group so consider giving them invite-only access.

How to improve product adoption among the early adopters

Use the innovators’ feedback to greatly improve your product for early adopters and reduce time-to-value. These folks are attracted to high-risk and high-reward value propositions that highlight customization and support.

Involve early adopters before your launch and show them the inner workings of the product. This will get them excited and entice them to share your product through their thought leadership.

How to improve production adoption among the early majority

Based on all prior feedback, find out what objections to address with this group (e.g. long installation, complex workflows.)

The early majority cares how popular a product is. Find ways to improve your product’s observability with customer success stories. Media and press releases will also help establish your expertise and strong market share.

How to improve product adoption among the late majority

Combat the late majority’s apprehension by showcasing a seamless transition to your product. Let them know which of their competitors are successfully using your product. This will show them how not using your product can become a competitive disadvantage.

At this point, it’s important to increase awareness and fight objections.

How to improve product adoption among the laggards

Laggards need a lot of hand-holding because they’re skeptical of new products and not as comfortable with technology. Ditch self-service and do real-time product demos or intimate webinars instead.

Explain how their existing alternatives are making their life extremely difficult. And use reviews and testimonials from people just like them to ease their doubts. Be very patient.

The Best Product Adoption Tools

Tool #1: Userpilot – for creating convenient support docs

Userpilot is a tool for product teams to increase growth along the user journey through personalized in-app experiences.

Its engagement functionality lets you create a convenient in-app resource center. This gives your users the product support they need to successfully adopt your product. You can link to both sections within the resource center and external links.

Best of all, it’s fully searchable!

Userpilot knowledge base example

If you’re looking to increase product adoption for your SaaS, get a Userpilot demo today!

Tool #2: Heap – for discovering additional necessary steps to improve product adoption

Heap is a standalone product analytics tool. It tracks everything your users do as soon as it’s installed and without needing to be configured. It’s more convenient than tools like Mixpanel in which you have to set your events up first.

The Heap Illuminate feature finds opportunities for a better user experience. It does this by automatically pinpointing steps where users are dropping off. Use this to see where users need more hand-holding to adopt your product as quickly as possible.

Heap illuminate feature

Source: Heap

Heap is effective but not cheap. Paid plans start at $1,000 per month, while the free plan is limited in usage and features.

You can read more about product analytics tools here.

Tool #3: FullStory – for seeing your product through your users’ eyes

FullStory lets you understand your users in a qualitative way with user session recordings. It even has the ability to track “rage clicks”: when users start clicking their mouse multiple times out of frustration.

Fullstory session recordings and dashboard

Source: Fullstory

Seeing your product being used in action is the best way to get a holistic picture of the user journey. From there, you can spot exactly how users are trying to perform an action. And come up with ways to make the experience more intuitive and increase product adoption.

Like Heap, you don’t have to configure anything to start capturing user behavior on your app. But keep in mind pricing is only on a per-application basis.

Conclusion

Understanding who your target customer is great. But getting a handle on where they sit on the Product Adoption Curve is critical in knowing how to engage each segment throughout your product’s lifecycle.

And don’t forget to account for the terrifying chasm between the early adopters and the early majority. Carefully craft your strategy so you’re giving early adopters what they need without sacrificing having a product that’s universal. As you hit the early majority, quickly pivot your positioning so you don’t fall into the chasm.

If you want to get more users to adopt your product with in-app onboarding, get a Userpilot demo.

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