SaaS Product Adoption: The Ultimate Guide

How important is understanding your product adoption, really? Well, really important.

Look at it this way: if a clothing shop gets tons of customers in the door but none actually buy anything, the shop probably isn’t long for this world.

The same is true for SaaS companies. Getting users to check out the product is great, but if they don’t fully buy into it then they’re essentially just window shoppers. Product adoption is about turning those window shoppers into loyal, paying, repeat customers.

Boosting feature adoption is a key way to accomplish this – essentially teaching your users what’s in the store, why they need it, and how to use it. It’s also critical to support this with a strong understanding of:

• Where your customers fall on the product adoption curve
• Stages of the product adoption journey
• The forces that influence product adoption
• Strategies to improve product adoption
• How to measure, analyze, and use product adoption metrics

We’ll cover all this and more, so let’s dig right in!

TL;DR

• Product adoption is the opposite of churn. It’s when users stop looking for alternate solutions and invest in a product to help them reach their goals.
• Investing in a product adoption strategy leverages the value of your current customers.
• The product adoption curve represents how and when different user segments tend to adopt a product. Using it can guide the type of support you give to your customers.
• The product adoption journey is useful for segmenting customers based on their level of adoption. Helping users along the journey increases product value for them and customer value to you.
• Customers are drawn to your product by the push of situational forces and the pull of the product’s capacity for facilitating an easier life.
• Customers avoid adopting new products when they face anxiety over product use or have strong habits linked with another product.
• Contextual onboarding and personalized onboarding help users experience increased value as they learn to use your product.
• In-app messages and in-app marketing can increase feature adoption while building on user experiences within your app.
• Collecting and analyzing focused feedback is more effective than casting a wide net for general comments.
• Help center widgets and knowledge bases are forms of self-serve onboarding that enhance user value from your app without interrupting their experience or causing unnecessary friction.
• Contextual email marketing is an effective tool for reaching users who have started to fall away from your app.
• Key product adoption metrics include time to value, product qualified leads, customer lifetime value, product activation rate, feature adoption rate, and customer engagement score.
• Creating a product adoption strategy drives the user journey forward after sign-up.
• Userpilot is a highly effective tool for collecting adoption metrics and implementing product adoption strategies.

What is product adoption?

So perhaps your customer acquisition campaign is going well – you’re getting loads of people looking at your product. But the process begins to fall flat when it comes to actual product use. What gives?

This is where learning to boost product adoption comes in.

Product adoption describes the user journey from initial interest to the active and purposeful use of a product. A product has been “adopted” when the user has moved from trialing the product to investing in it as a solution.

To continue the previous analogy, customer acquisition means packing the store with shoppers, while product adoption is getting those shoppers through the checkout line with an intention to return for more. In this sense, product adoption is the opposite of churn.

However, while churn simply means that the user has dumped your product in favor of a different solution, the other side of the coin is more complex. Fostering product growth is essential to counteract the forces that can lead to churn or stop users from adopting your product in the first place.

We’ll take a deep dive on these churn/adoption forces and how you can leverage them, but first, we need to establish what makes understanding, analyzing, and strategizing about these forces so important.

Why does product adoption matter?

Product adoption is the opposite of churn

Your company’s churn rate is where you see the work of customer acquisition and product adoption undone. Thus, reducing churn rate is especially important for SaaS companies since customers don’t just buy the product once.

Of course, subscription-based products need that initial conversion of interest to activation as much as any other product, but maintaining activation is absolutely essential. Otherwise, your customer lifetime value (CLV) and your monthly recurring revenue (MMR) will plummet.

Simply getting more customers doesn’t help reverse trends in these key metrics. Instead, you’ll get a much larger bang for your buck by giving attention to your existing customers and their experience with your product.

A good example of this value is that upselling to existing customers can be 5 to 10 times cheaper than acquiring a new customer. However, leveraging the value of your current customers requires a strong understanding of what drives initial and ongoing product adoption.

What is the product adoption curve (lifecycle)?

The first big picture way to understand product adoption is with the product adoption curve. The curve shows the rates at which different customer segments tend to adopt a product at different stages of its lifecycle.

As we can see from the graph, there are five different stages, and each stage comes with customer segments of different sizes and characteristics. Let’s break down the stages and segments:

The Innovators

The first segment to adopt a product is the innovators. This small segment (2.5% of the market) are users excited about new technology and who don’t mind if there are some bugs and hiccups with the product.

Despite being a small market segment, the innovators are important as an early feedback resource. They tend to be tech-savvy and can spot potential issues or missing features. However, as vanguard users, they are more interested in trying something new than committing long-term to a product.

The Early Adopters

Early adopters are a larger segment than the innovators, and often have a greater need for your product as well as resources to spend on solutions. These users are more interested in innovation than novelty and will expect the product to work effectively toward their goals and needs.

Capturing early adopters means working out the kinks from your product and establishing a good reputation. These users won’t adopt products on a lark and will expect strong customer support for any issues that arise.

The Early Majority

The third stage has one of the largest user segments (34%). This group is only interested in a product once it has established itself and earned a solid reputation.

The early majority’s risk-aversion creates a chasm between the second and third segments. Overcoming this chasm takes a strong relationship with the innovators and early adopters to build a sense of security for the early majority. Investing in this foundation is worth it, though, since the early majority are looking for a solution to stick with over time – in other words, they are likely to become a large segment of loyal product adopters.

The Late Majority

The late majority is another large segment and shares a lot of overlap with the previous group. However, what differentiates them is that the late majority is even more risk-averse and intolerant of technical issues.

In short, the late majority users are jumping on the bandwagon but only when they feel completely secure in doing so.

The Laggards

The final segment is small and relatively resistant to new products. They prefer the technological solutions that they’re already comfortable with and will switch to new solutions only when it becomes a necessity.

What are the product adoption journey stages?

With any product, the user’s experience doesn’t end at purchase. For SaaS, in particular, we can break the product adoption journey into seven stages.

Understanding these stages can help your company nudge customers forward in their journey and strengthen their level of adoption.

Identifying where customers are on the product adoption flywheel is handy for user segmentation. Offering appropriate support to the user segment at each stage increases user momentum moving from purchase to advocacy. And as we saw in the product adoption curve, generating those positive reviews and referrals through customer advocacy is key to gaining even greater user adoption!

To see how this works, let’s take a look at each step of the journey.

1. The “Aha!” moment

This is the moment when a user realizes the value of your product for resolving a pain point.

2. Activated

While the “Aha! moment” is a mental state of enthusiasm for your product. Users only become “activated” when they begin actually getting value from the product.

3. Selected

Users are likely to try multiple products to find which best meets their goals. “Selected” is when a user decides your product works best for them and stops using other products.

4. Paid

Unsurprisingly, this stage is when users decide your product is worth paying for to keep using. A “Paid” user doesn’t follow automatically from “Selected”, though. Be sure to use good conversion tactics to keep the user journey moving!

5. Basic

A “Basic” user likes your product and uses some of its features but isn’t utilizing it to its full potential. This means they’re getting less value from your product than they could be with greater feature adoption.

6. Pro

“Pro” users know the ins and outs of your product. They’re actively maximizing value from your product and have fully bought into it. These “power users” bring tremendous value to your company and are worth every effort to cultivate.

7. Advocate

An “Advocate” is a user who gets so much value from your product that they go out of their way to recommend it to others.

Advocates generate those reputation-building positive reviews that bring in the largest segments from the product adoption curve. That’s why it’s great to have “pro” users, but it’s even better to invest in some in-app training to push users toward this final state.

What are the forces that influence product adoption?

Just having a great product that outperforms the competition doesn’t necessarily mean customers will line up to fully adopt it.

There are four main forces that influence product adoption, and not all are directly related to the quality of your product. Leveraging these forces can go a long way toward increasing user momentum along their product adoption journey.

The “Push” of the current situation

Changing circumstances can cause old solutions to become ineffective or inefficient (whatever happened to DVD players? Oh… the internet). A “Push” happens when old ways of solving problems just don’t cut it anymore.

The “Pull” of the new solution

On the other hand, a person’s current situation may be fine… but what if it could be better? “Pull” is generated by the desire for a better life or better solutions.

The anxiety of the new solution

Push and Pull generate demand for a product; anxiety decreases it. People experience this demand-reducing anxiety when they worry about the unknowns or complexities of choosing a new solution, or potential problems that arise while utilizing it (“Does this new app even work?”; “I like the app, but if it crashes during a meeting I’m sunk”).

The allegiance to the current situation

Habits create powerful inertia that keeps people from seeking new solutions. Ever held onto an aging, frustrating smartphone just because it’s got all your photos? That’s demand-breaking inertia in action. Breaking old habits is hard, and sometimes it feels easier to do something familiar than to learn a new way that may be better.

How to improve product adoption?

Now that you’re familiar with all the context supporting and inhibiting product adoption, it’s time to look at concrete strategies for improving it. But before we dive in, it may be worthwhile to browse our refresher on all product adoption terminology. Now, without further ado let’s jump into our most proven tactics for improving product adoption!

Invest in in-app contextual user onboarding

Making the most of your product’s onboarding is key to increasing product adoption. This lets you hold your user’s hand and guide them through your product.

Of course, it goes without saying that the better a user understands your product, the more likely they are to stick around long term.

Two effective ways to achieve this are contextual and personalized user onboarding. The two are not mutually exclusive and often work hand-in-hand.

Contextual onboarding is when the product itself provides guidance to users as they use it. In the context of SaaS, this often takes the form of tooltips that give advice on how to improve processes that the user is currently working on.

This stands in contrast to email or other onboarding strategies that, while still valuable, take place outside of the product. Contextual onboarding provides targeted support in real-time to help users adopt more features with greater success.

Contextual onboarding relies on creating triggers throughout your product. When a trigger is fired, your onboarding messaging shows.

An example of a trigger could be scrolling to a certain part of the page or clicking a certain button.

This tooltip from Postfity is a great example of contextual onboarding.

The tooltip anticipates a pain point the user may be having and suggests product features that can resolve it. And not only does it suggest a feature, but it clearly and concisely shows how the feature will connect the user to the desired outcome.

Next, personalized user onboarding is an important tactic on its own, but also as an extension of contextual onboarding. Essentially this takes the form of personalizing onboarding flows to each user.

Here is where considering all the factors in product adoption becomes key. Tailoring onboarding experiences to your users’ current stage in the product adoption journey or their position in the product adoption curve can really help move them along toward that prized “Advocate” role.

To this end, consider segmenting your users into different personas. Each group can be shown an onboarding flow tailored to them. Take, for example, this simple welcome screen survey.

User answers to these questions can help sort them into the appropriate segments. Then with that information, tooltips, emails, and in-app walkthroughs can give more targeted support that helps the user get better value from your product.

You can think of best practices in user onboarding as boosters to spring users to new stages along the product adoption journey. Use them to help your customers expand the breadth and depth of product feature adoption.

Engage with users in-app to drive adoption

There’s no guarantee your users will open an email or see a social media update. But the product they use on a daily basis? They’ll definitely see messages there.

In-app messaging benefits from great visibility and the capacity for strategic, timed deployment.

Some of the most common forms of in-app messaging include notifications, changelogs, tooltips, interactive walkthroughs, modals, and sign-up screen adverts.

When used as part of a strong in-app marketing campaign, these message pathways support user onboarding, feature adoption, user feedback, and product announcements.

For example, giving new users an in-app interactive walkthrough is a great way to help them hit the ground running. See below how Trello’s walkthrough equips users to adopt key product features right off the bat.

Step 1: Name your board.

Step 2: Create your board structure with lists like ‘Things to do’, ‘Doing’, and ‘Done’.

Step 3: Learning how to use cards.

Step 4: Finish building and get into the app with avoiding an empty state.

Improve your product using feedback

You may feel that your app cuts through user pain points like a hot knife. But do the users feel that way?

One of the most effective ways to find out if your product is meeting user needs is simply to ask them!

However, opening the floodgates of user feedback can be overwhelming. There’s going to be positive, negative, and contradictory feedback coming in from all sides.

How can you sort through it all to discover what’s really going to improve your product?

The best strategy is not to set yourself up for a deluge of feedback immediately. Instead, be targeted and intentional with your feedback requests.

Feature surveys are an excellent way to get focused feedback on specific aspects of your product. So, rather than asking general questions about your app, include a brief one- or two-question survey that pops up after a particular feature gets used.

You can also collect feedback at a more bird’s-eye level with microsurveys. These can be used like feature surveys or included on a welcome screen or at trial-expiration points to gather user sentiment (churn surveys).

In the context of product adoption, these surveys do a great job of helping you pinpoint where your users are on their journey and what aspects of the product are helping or hurting adoption.

But that’s not all they can do. Check out these microsurvey templates to see more of what you can accomplish with user feedback.

Improve your in-app support to remove friction

We’ve already sung the praises of in-app messaging, interactive walkthroughs, and user surveys. But used in excess, these strategies create friction. In other words, they slow the user down from actually using your product.

While your users may indeed benefit from a three-hour tutorial on how to use your app, how many would actually sit through that?

Probably none.

That’s where self-serve onboarding comes in.

Self-serve onboarding provides tips, guides, and walkthroughs that allow users to learn by doing instead of being bombarded with feature tutorials that may never be relevant to them.

In a nutshell, this style of onboarding allows users to dig into the app right away and learn how to use it as they go. Tooltips and in-app messaging react to user actions and suggest the onboarding experiences that will hasten that particular user’s “Aha! Moment”.

Basically, we want to avoid a parade of feature tutorials that may generate friction along the product adoption journey.

In practice, one good way to accomplish this is with a help center widget.

For example, say a user has forgotten how to access a particular feature. They could hop on your website and search for pointers, but that creates a significant interruption in their experience with your actual product.

Providing an in-app help center widget reduces friction by allowing the users to get help without having to leave the app.

Another strong self-serve onboarding tool is the knowledge base.

Like an FAQ, a resource base decreases your support ticket volume by helping users overcome issues on their own. However, unlike an FAQ, knowledge bases don’t just answer questions; they provide resources for troubleshooting.

A peek at the (in-app!) knowledge base will not only provide an explanation for how to find or use a feature but also guide the user (in-app!) to that feature. Notice how Postfity’s knowledge base achieves this quickly and seamlessly for a user who wants to group accounts:

No friction there. The user is moving toward becoming a “Pro” without interrupting their use of the app at all.

Engage with users outside the app to bring them back and increase adoption

All the strategies we have discussed so far are great for users who are actively engaged with your app. But what about users who haven’t started using it yet? Or those who have begun to drift away?

In these cases, it’s important to engage with users outside the app to bring them (back) in. None of your in-app marketing will work if users never see it!

One of the most effective ways to engage with users outside of your app is contextual email marketing.

Here’s an example of how it works:

Say a user starts a trial of your app. Native tooltips and self-serve onboarding may not get him to the “Aha! Moment” if he doesn’t spend much time in the app. A well-placed email, however, could trigger additional interest.

A tool like ActiveCampaign can be set up to educate and nurture users at key junctures in their product adoption journey. For instance, after welcoming a new user, a series of automated emails can be scheduled to support the user in getting started with key product features.

The real power of a tool like this is not just in the automated sequence of support emails, however. Contextual email marketing allows you to trigger specific emails based on user actions, events, or personas established in-app.

In contrast, time-based email sequences can work but may not align well with the user journey. Rather, email sequences based on user milestones or in-app experiences perform significantly better for enhanced product adoption.

Think of your own email inbox. Are you more likely to open an automated reminder or a message that is directly relevant to your recent experience?

Channeling your email marketing to contextual user experiences dramatically reduces the chance of your marketing efforts landing in the trash bin.

How do you measure product adoption?

There are many different kinds of product adoption metrics, such as time to value, product activation rate, and customer engagement to name a few. While it may be tempting to collect all the data you can get your hands on, this isn’t the best way to approach these metrics.

Instead, it’s much more effective to have a focused and strategic approach to user adoption metrics. To be useful, your metrics need to be tied to a specific goal. Otherwise, it’s easy to get distracted measuring user behavior that’s irrelevant to actually improve product adoption.

What are the common product adoption metrics?

Let’s take a look now at some of the most important metrics for product adoption. We’ll examine what each is and why it matters to you.

Time-to-value

Time-to-value is the time it takes for a user to reach the “Aha! moment” and start experiencing value from your product.

The more you can do to decrease time-to-value, the more you’ll help increase product adoption.

Doing this improves your onboarding flow and concentrates users towards the “Aha! moment”.

Product-qualified leads (PQLs)

Product-qualified leads are users who are basically on the verge of purchasing your product. They’re as close as a non-paid customer can get to adopting your product.

It’s important that you increase the number of product-qualified leads because sales can work with these customers and help them cross the line to adoption.

PQLs also present a great opportunity for product-led sales (or product-led growth: PLG). If the product itself provides strong sales support, then tipping PQLs toward adoption becomes even easier.

You should keep an eye out for these users and understand how they’re engaging with your product. Then you can use CTAs and in-app marketing to help them adopt your product.

Customer lifetime value (CLV)

More product adoption means less churn. Less churn means a greater customer lifetime value.

Customer lifetime value is exactly what it says: It’s the value (in terms of currency) that a customer provides over their total lifespan.

In other words, it’s how much they’re going to end up paying you on average.

Clearly, this is important. A higher customer lifetime value means your customers are sticking around for longer, and are giving your more money as a result.

Product activation rate

Getting users to the “Aha! moment” is critical, but it doesn’t necessarily ensure that they’ll adopt the product. Therefore, one of the most important metrics looks at what comes after the “Aha! moment”: activation.

User activation is tricky to define because it’s different for every product. We’ve got some in-depth guidance for you on defining this metric for your product, but essentially you need to choose a specific in-app event or milestone that’s indicative of activation.

Once you’ve decided on your proxy for activation, you can begin to measure the user activation rate. This is not a metric to ignore, because a 25% increase in activation can result in a 34% increase in MRR over 12 months.

Interested? Well once you’ve begun to measure your activation rate you can start employing strategies to increase activation based on your data.

Feature adoption rate

Feature adoption rate is just what it sounds like: how much users are taking advantage of your product’s features.

Since much of your product’s value is tucked into its features, this metric is a key indicator for the amount of value customers are getting or leaving untapped. And remember, getting users from “Basic” to “Pro” is all about increasing feature utilization.

Even if your product’s features aren’t particularly hidden, users may struggle to realize they’re there. This is where building in some feature discovery can go a long way.

You’ve poured a lot of work into developing great features, don’t let them go unnoticed!

Customer engagement score

Customers obviously won’t get much value from your product if they don’t use it. That’s why measuring user engagement is a key indicator of your customers’ “health”.

In other words, customer engagement can show you where your product has opportunities for expansion, and where there may be a risk of churn due to low engagement.

To calculate a customer engagement score, identify relevant inputs such as usage frequency, specific user actions, or completed tasks. Combining these inputs (often with weighting for inputs that show stronger signs of engagement) for each customer will give you their engagement score.

What is a product adoption strategy?

Companies typically put a lot of planning into their pre-sign-up strategy. But as we’ve seen, the user journey really only starts at sign-up.

Having a strategy for increasing adoption after users sign up is how you drive the user journey forward.

Creating a product adoption strategy can be complex. We’ll take a look at the five primary steps for creating an effective strategy here, but for more detailed guidance check out our guide on creating your first product adoption strategy.

1. Understand your persona(s) and their goals, segment your users – Intuition here is almost always insufficient; collect hard data on your users and use that in your analysis.
2. Understand what successful and happy customers do with your product – You may have some guesses, but be sure to test them with cohort analyses and customer feedback.
3. Define the key activation points your users need to reach to get the value of your product (get to the ‘AHA! moment’) – What specific user actions or feature adoptions represent true activation?
4. Map specific user behaviors against the user journey – This can provide insight for enhancing user value and adoption with different user segments or personas.
5. Understand your user’s motivation to solve problems using your app – Do users really need your app? The stronger the user’s need, the better their chance of fully adopting.

This will get you started on developing a strong product adoption strategy. But if you want even more be sure to check out our product adoption school.

Product adoption tools and software

Now that you’ve gotten the low-down on product adoption, it’s time to dig into tools that will help you turn your metrics and strategy into results.

There are loads of tools and software out there for collecting metrics, analyzing customer data, and optimizing your app for frictionless adoption. Effective use of these tools will help you build the UI patterns and user experiences we’ve covered in this article to boost product adoption.

Userpilot is an outstanding option for its no-coding ease of use to drive product adoption from Aha! to Advocate.

Userpilot

Userpilot is a product growth platform that lets you communicate with users in-app, collect adoption metrics, and build your product adoption strategy.

It offers a host of customizable UI patterns to bring your product adoption strategy to life – from onboarding experiences to feedback surveys, in-app messaging, and more – all without having to write a single line of code.

You can even run A/B tests to see which elements of your strategy result in higher product adoption rates. You can align results tracking with specific goals, and tweak user experiences all within Userpilot.

Further, your can clarify your understanding of which features are getting adopted most with feature tagging. This allows you to tag UI elements and track user engagement with particular features.

If you’re ready to really up your product adoption game, go grab a Userpilot demo and get started today!

Additional Tools

• Appcues – Good ease of use for measuring and improving adoption.
• Userguiding – Solid budget option for onboarding experience development.

Userpilot offers tremendous value for money, but it’s catered to mid-market businesses that have achieved product-market fit and isn’t designed for mobile apps. If you’re still wondering which tool is best for you, check out our full comparison of some alternatives by use case and persona.

Product adoption: It’s not magic

Getting a handle on product adoption can be transformative for your company. Converting window shoppers to loyal, paying customers isn’t magic, and there’s so much you can do to kick adoption into high gear. Remember:

• Identify where your customers are on the product adoption curve and provide appropriate support.
• Nurture users along the product adoption journey.
• Leverage the forces that influence new product adoption to increase the “gravity” of your product and reduce anxiety.
• Use key metrics to understand what’s driving or impeding product adoption.
• Take specific steps to optimize your app so that it facilitates frictionless adoption.

Want to start boosting your product’s adoption rates? Get a Userpilot Demo and see how you can take product adoption to the next level.