Product Adoption Guide: How Can PMs Measure and Improve It?

Improving product adoption is a pivotal part of any product manager’s job.

To help with this, we’re going to unpack exactly what adoption is, break down the product adoption process, and show you techniques for boosting the adoption rate.

Let’s go!

TL;DR

• Product adoption encompasses the entire journey from awareness to full product usage.
• Nailing the product adoption process will help boost free-to-paid conversion rates, improve customer retention, and boost customer loyalty.
• The product adoption curve segments users from most to least likely to adopt products quickly. You have innovators, early adopters, early majority, late majority, and laggards.
• The product adoption process itself has several key stages: awareness, interest, evaluation, trial, activation, and finally adoption itself. Your job is to help move your customers smoothly from one stage to the next.
• Along the adoption journey, you should explore various metrics to help you make informed decisions. These are activation rate, time to value, adoption rate (for your entire product and new features specifically), retention rates, and overall customer lifetime value.
• You can use analytics to better understand real user behavior. There is a huge range of options at your disposal, each offering something slightly different. Relevant analytics include event and feature tracking, in-depth funnel analysis, heatmaps, session replays, and retention analysis.
• Although boosting adoption will differ for each product, there are best practices to consider: ensuring the sign-up experience is frictionless, personalizing the onboarding, demonstrating value with interactive walkthroughs, providing contextual help, and gathering direct user feedback.
• None of this is possible without the right tool for the job. Userpilot is a powerful all-in-one product adoption platform with analytics, the ability to create in-app flows, and collect feedback.

What is product adoption?

Product adoption is a broad term encompassing the entire journey of someone using your product. This could be from initial interest and awareness to a free trial to occasional usage of key features and to full-scale adoption.

In a nutshell, you have reached ‘adoption‘ when your users move past the trial stage. That means the value proposition of your product or service makes enough sense for them to invest their hard-earned money.

Why is measuring product adoption important?

So, why is nailing the product adoption process (and measuring how it’s going) so important for product managers?

• Boosts your free-to-paid conversion rate: The lifeblood of all SaaS businesses is converting free users into paying customers. You can’t build a business on free trials. Product adoption is vital for improving this conversion rate as users need to understand how to get value from your key features.
• Retains your customers: There’s no point in converting users if they’re just going to leave straight away. Typically, a SaaS with a high product adoption rate will result in lower churn and a greater retention rate over time. The consistent growth of daily active users is a healthy metric for any SaaS.
• Turns customers into advocates: User adoption is all about value realization. If you give your users a positive experience, it’s only natural they’ll want to spread the word. Positive word of mouth is one of the most powerful marketing campaigns which can help with product-led acquisition later on.

What is the product adoption curve?

Product adoption is not a linear process. The product adoption curve is a useful model for understanding and analyzing how the process works.

Let’s look at each stage in detail:

• Innovators: They are brave pioneers and risk-takers willing to try things out. Imagine your most tech-savvy friend who is always up to speed with the latest trends. Making up just 2.5% of the market, these innovators represent the first stage of the adoption cycle.
• Early adopters: Next up are early adopters, who represent a bigger chunk of the market – about 13.5%. Unlike innovators, they’re not just tinkering and experimenting. Typically, they are trying to solve a real problem and have the funds to invest in a solution. They’ll expect a higher quality service than innovators.
• Early majority: This segment represents an enormous 34% of the market. They want stability and certainty about the technology they are using and will make slower, more considered decisions.
• Late majority: Another 34% of the market, people from this group are fairly conservative. They don’t actively seek out change because they don’t like the risks of failed innovation. They will adopt new technology out of necessity rather than experimentation. A good example of this might be a small business finally putting itself on Google Maps.
• Laggards: Representing the final 16% of the market, laggards are the most change-resistant segment. Typically an older demographic who is less comfortable with technology and will only adopt a product when they have no other choice. A good example might be someone starting online banking because their local branch closed down.

Six stages of the product adoption process

Now we know what the product adoption curve looks like. But what about the product adoption process itself? Let’s walk through each of these journey phases.

1. Awareness: This stage is all about getting on your potential customers’ radars. You can’t adopt a product if you don’t know what it is! Marketing and communication are key to nailing this step.
2. Interest: Users move onto this stage when they start actively thinking about a product helping them achieve their jobs to be done. It shows they have enough information to start making informed decisions.
3. Evaluation: It’s getting to decision time. Potential customers will weigh the pros and cons of different options to select the best one for their use case.
4. Trial: At this stage, users are actively testing whether your service meets their needs. They might undergo a free trial, try out a product demo, or go straight in with an initial purchase.
5. Activation: This is a pivotal moment in which your users start to experience value for the first time. Without experiencing product value, your users won’t be convinced to invest in paying for your service.
6. Adoption: Once a user has been activated and experienced value directly, they are in the position to decide whether to use your product in the long run or to abandon it. You should have a range of plans available to help your users take the leap.

Important product adoption metrics PMs should track

There’s an old saying from the world of business management:

“What gets measured gets managed.” Peter Drucker

Here are some of the key metrics to measure. Understanding them will put you in a position to work out how to improve them.

• Activation rate: This tells you the proportion of users who’ve been activated (i.e., experienced value) and is calculated by dividing activated users – as you’ve defined activation – by the total signed-up users during a time period.
• Time to value: This measures how long it takes for your new users to experience value from your product or service.
• Product adoption rate: This figure gives you an idea of your overall product adoption (i.e., percentage of users regularly using your product).
• Feature adoption rate: A more granular version of the above metric, helping you dive into the adoption rate of a specific feature (i.e., percentage of users regularly using a feature).
• Retention rate: This metric tells you how effectively you’re keeping hold of your customers, and is calculated by working out the percentage change in users over a given time period.
• Customer lifetime value: A composite metric that measures the total revenue a customer brings you over their entire customer lifecycle.

How to measure product adoption through product analytics?

We’ve covered what adoption is and why it’s important. But how do you actually measure it?

Custom event and feature tracking

Both of these options – event analysis and feature tracking – will help you better understand user behavior.

They’ll help you track how users are interacting with your product and which features they’re using (or not). That’ll help you identify how to improve adoption rates.

Funnel analysis

A user funnel analysis helps visualize how users are moving along the customer journey toward adoption.

You need to set the important milestones a user needs to go through to reach adoption. By figuring out where there are drop-off points (i.e., user friction), you can adopt relevant strategies to try and make the adoption experience more frictionless.

Heatmaps

A heatmap is a visualization, through colors, of how users are interacting with your user interface. They’re incredibly useful for figuring out which areas of a product are most frequently engaged with (or not, as the case may be).

There are different varieties of heatmaps you can use: feature click maps, hover maps, eye-tracking maps, and scroll maps. Each will give you a slightly different view and all of them are useful for product teams to make targeted improvements.

Below is a feature click heatmap from Userpilot that shows feature popularity.

Session replays

Session replays let you watch back a recording of a user interacting with your product; what features they’re using, and which areas of the product might be slowing down the adoption process.

Retention analysis

Analyzing retention through cohort analysis will help you figure out how your existing customers are using your product over time. Getting users to adopt your product is the first step but to truly achieve product growth and high revenue, you need to retain them.

Best practices for increasing product adoption

Next up, we’re going to unpack some actionable tactics for boosting product adoption in your SaaS. Let’s go!

Create a frictionless sign-up page for new users

You want to make it as easy as possible for potential customers to sign up and get started using your product. One way to achieve that is by offering SSO options (or at the very least simplifying your sign-up flow).

Personalize the user onboarding experience to shorten TTV

Personalization is rapidly becoming an industry standard in the onboarding process. It’s proven to help users reach the ‘Aha’ moment far quicker (a prerequisite for adopting your product).

Collect customer data with welcome surveys, and use what you find out to personalize the experience accordingly. You could show distinct features based on their needs, offer different onboarding tour options, use tooltips based on specific jobs to be done, and more.

Use walkthroughs to improve user adoption

Interactive walkthroughs shorten the learning path so users can quickly experience the value of your product.

What makes walkthroughs such a valuable tool is that they are equally useful in primary and secondary onboarding. You can use them to introduce the basics (primary) or showcase new features (i.e., boosting secondary feature adoption).

Prompt contextual messages to show the value of your product

The worst product experience is a load of irrelevant in-app messages. Launching contextual messages that help your users experience product value sooner is a far more subtle and effective choice.

Track the user behavior of power users and replicate their path

The first step here is to define what a power user is in the context of your product.

You can then use product analytics to monitor their behavior, and reverse engineer the steps they’ve taken toward adoption so you can replicate the path for all new users.

Collect customer feedback to continuously improve the product experience

Your users won’t adopt your product unless they are happy with their experience. You should frequently collect feedback through in-app surveys, and importantly use the insights you gather to improve your product and customer experience.

Best product adoption examples from successful SaaS businesses

To round things off, let’s look at two real-life examples from SaaS companies. Both have used Userpilot to achieve their adoption goals. Userpilot is a powerful all-in-one platform for driving adoption offering analytics, engagement, and feedback tools.

The Room onboarding flow

Background: The Room is a company with an important mission. The tool was funded by the Microsoft Foundation to create 3 million work placements for young tech workers from Africa over the next decade.

The problem: Users simply weren’t uploading their CVs, and that meant the core offering of the platform wasn’t working. In other words, users weren’t adopting the product.

What they did: They used Userpilot to build onboarding flows and an entirely new product adoption process through relevant driven actions. This saw a huge boost in activation: 75% more CV uploads in just 10 days after implementing the new journeys.

Sked Social checklist

Background: Sked Social is an Instagram-first social media platform.

The problem: Initially, they were struggling with conversion rates: lots of hits on their various pages, but not seeing enough people move through the product adoption stages.

What they did: Sked Social used Userpilot to quickly build dynamic and engaging checklists to help users understand exactly how to use their product.

Taking them step by step through several key activities had an enormous impact on the conversion rate: a user who completed the checklist was over three times more likely to become a paying customer.

Conclusion

We’ve covered a lot of ground!

Hopefully, you now have a deeper understanding of what product adoption is all about, and importantly some tangible examples you can draw from.

Want to get started with boosting the adoption rate of your own product? Get a Userpilot Demo and see how you can craft experiences that delight your users.