You can spend thousands of $$$ on marketing, hours fine-tuning your sales funnel, and yet, no results? Why? Well, most likely it’s because you need to improve your product adoption.
Product adoption is crucial to the success of any SaaS product. I don’t just mean it’s what separates the good from the great, I mean it separates those that survive and those that don’t.
This might sound like I’m exaggerating. But, as you’re about to see, if you increase product adoption, you’ll see churn plummet overnight.
I’m going to cover a lot in this article:
- What product adoption actually is
- Why product adoption is so important
- How you can increase your product adoption
- Which product adoption metrics you need
Plus lots of actionable tips and real-world examples throughout.
Let’s dive in…
What product adoption actually is
Everyone in the SaaS world has heard about product-led growth (PLG). PLG is what every SaaS company is currently aiming for. Essentially, it’s allowing your product to do all the work.
It means your product markets itself. People give it a try and they can’t stop using it. They love it so much they start spreading the word. All your marketing, all your sales, all your growth is done for you.
That’s the dream, right?
Product adoption is an important step towards PLG. I’ll get to that in a minute. First, let’s make sure we’re both on the same page.
Product adoption is where users move from the initial activation stage to fully buying in to your product.
In other words, it’s when a user has evaluated your product, got themselves set up, and has decided to stick around long-term.
Product adoption is essentially the opposite of churn. So yeah, it’s a pretty good thing to aim for.
Why product adoption is so important
Like I mentioned in the previous section, product adoption is a crucial step when it comes to PLG.
The diagram below shows what I mean…
As you can see, the main stages of PLG are activate, adopt, adore, advocate.
While all four stages are important, I believe that product adoption is the most crucial.
Activation is fairly easy to achieve. Most SaaS products offer free trials. It’s easy for users to sign up and give your product a try.
Product adoption is a little more difficult. Generally you need to part people from their money to achieve it. This is clearly harder to achieve.
But once you manage to achieve product adoption, as long as you have a good product adoration and advocation fall in to place fairly quickly.
So arguably product adoption is the most difficult step, and it’s the most crucial because the whole of your PLG relies on it.
Churn is the enemy of any SaaS product. If your customers are churning more than you’re having to shove more and more people into your funnel. But even that won’t help. If your boat has a hole in it, the best approach is to plug the hole, not grab a bigger bucket.
Not only that, but upselling to existing customers can be 5 to 10 times cheaper than acquiring a new customer.
So yeah, product adoption is crucial. It turns someone sitting on the fence into an actual paying user. It reduces churn. It increases your customer lifetime value.
You might remember I said product adoption was one of the hardest things to achieve.
Well, not to worry! Let’s take a look at the various ways in which you can increase product adoption.
How to increase product adoption
There are plenty of techniques you can use to increase your product adoption. We’re going to cover:
- Nailing your Aha! moment
- Improving your onboarding
- Investing in customer success
- Utilize in-app marketing
Nailing your Aha! moment
Every successful SaaS product has an Aha! moment. This is the point where your users see the inherent value of your product. It’s supposed to wow them to the point where they’re ready to use your product long-term.
In other words, your Aha! moment is intrinsically linked to product adoption.
Firstly, if you don’t know what your Aha! moment actually is, you need to find out. A good way is to speak to your existing customers and ask them. What made them decide to stick around?
It’s also worth looking at your analytics using Mixpanel or Heap. They can tell you what users do before adopting your product. If there’s one particular thing they experience, then that’s your Aha! moment.
Now it’s a case of making sure you funnel new users towards the Aha! moment. The quicker the time-to-value, the more likely product adoption becomes.
Adapt your onboarding flow so that new users are instantly guided towards the Aha! moment. Ideally, make it be one of the first things a new user experiences.
It’s also important that you have multiple Aha! moments scattered throughout your product. This way, as users continue to use your product, they’ll constantly have these great experiences. This will make them stick around.
An example of an Aha! moment
One of the best examples of decreasing time-to-value, and allowing users to experience an Aha! moment firsthand, comes from Airbnb.
Previously, Airbnb required new users to fill out a lengthy sign-up form in order to start looking at the listings.
Now, Airbnb’s Aha! moment is seeing the vast range of accommodation available. So the team decided to make it even easier to get there. They removed the sign-up form entirely.
New users could simply visit the website, search for what they wanted, and instantly experience the Aha! moment.
By reducing the time-to-value, Airbnb was able to increase product adoption.
EDITOR’S NOTE: If you’re interested in learning more about using your Aha! moment, check out our article about it here.
Improving your onboarding
Your product’s onboarding is a key component when it comes to increasing product adoption. You can 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.
As far as I’m concerned, the best approach to take is contextual onboarding. This means you personalize onboarding flows to each user.
You show them the right message at the right time. Your onboarding should align with what your users are trying to achieve.
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.
You should also consider segmenting your users into different personas. Each group can be shown an onboarding flow tailored to them.
The key here is personalization.
An example of contextual onboarding
One of my favorite examples of contextual onboarding comes from Airtable.
Instead of bombarding you with walkthroughs and product tours that might not be relevant, they provide a subtle approach.
You can click on the icons in the bottom corner to open up different onboarding flows, dependent on your needs.
This personal, contextual approach to onboarding is far more effective for increasing product adoption.
EDITOR’S NOTE: We have a great article that describes how to get started with contextual onboarding. You can check it out here.
Investing in customer success
Customer success has become one of the most important parts of a SaaS company. It’s become increasingly apparent that retention and upselling are key to success.
Customer success also have a key part to play when it comes to product adoption.
If your customer success team are doing their job right, they’ll be monitoring how your users engage with your product.
That means they can see where users are falling short. This is really useful. It enables you to spot gaps in your product. Maybe you need better onboarding, or maybe you need to tweak your UI.
Customer success are also able to reach out to those users who are struggling. Sometimes an email or two can be enough to turn someone from a churn risk to a long-term user.
If you haven’t already, I highly recommend investing in some high quality customer success talent. They can transform your product adoption.
An example of customer success
Another way customer success can increase product adoption is through customer education.
A prime example of this is from Intercom. Intercom hosts regular webinars that highlight new features, and explain how to make the most from its product.
This way, new users can better understand how to use Intercom, and put those learnings into practice.
Utilize in-app marketing
A large piece of the PLG puzzle is in-app marketing. This is where you use marketing messages inside your product to encourage adoption.
In-app marketing can be more effective than standard forms of marketing.
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 those messages.
Examples of in-app marketing include notifications, change logs, tooltips, modals, and sign-up screen adverts.
In-app marketing can be used to drive adoption for new features or existing features.
The key is to create your goal, create a strategy, and then add your in-app marketing campaigns.
An example of in-app marketing
This modal from Hubspot is a great example of in-app marketing.
This appears when you try access a Hubspot feature that you don’t currently have access to.
It shows you a video explaining the benefits of upgrading, and clear copy to help you understand why it’s so useful.
This is a great example of how you can upsell to your customers and increase product adoption.
EDITOR’S NOTE: Looking to learn more about how you can use in-app marketing. Take a look at our article here.
Which product adoption metrics you need
Improving your product adoption is great, but you need to make sure you’re measuring the right things. If you don’t, then how can you be sure that what you’re doing is working?
I’m going to focus on three core metrics:
2. Customer lifetime value
3. Product-qualified leads
I’ve actually touched on time-to-value earlier in the article. That’s because it’s such an important metric when you’re measuring product adoption.
Time-to-value is the time it takes for a user to reach your 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.
That means improving your onboarding flow, and concentrating users towards your Aha! moment.
2. Customer lifetime value
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.
3. Product-qualified leads
Product-qualified leads are users who are basically on the verge of purchasing your product. They’re as close as you can get to adopting your product.
It’s important that you increase the number of product-qualified leads because sales can basically take these people and help them cross the line.
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.
Key takeaways for improving product adoption
Let’s recap what I’ve covered in this article…
- Product adoption is the stage where a user decides to go ahead and purchase your product, wanting to use it long-term.
- Product adoption is a crucial part of product-led growth. This, in turn, means it directly impacts churn and revenue.
- There are many ways of increasing product adoption, including onboarding improvements, in-app marketing, and investing in customer success.
- The key metrics you need to measure are time-to-value, customer lifetime value, and product-qualified leads.
If you want to start increasing product adoption right away, then a good first step is to nail your onboarding. Why not give Userpilot a try and get started today?
About the Author
Joe is a UX and content writer, with several years of experience working with SaaS startups. He’s been working with SaaS startups that are focused towards product management, product marketing and customer success for the past couple of years. If you want to fix your UX copy, feel free to reach out to Joe for this: https://joedaniels.io/