Product adoption

Want to know the secret to getting your customers to really love your product? It's all about product adoption! This article breaks it down and gives you the lowdown on why it's important and how to do it.

Marketing
Product adoption

Product adoption is the process of introducing your new product to potential customers and helping them become familiar with it, evaluate its value, and begin using it. 

While marketing your product is important across any industry, software companies need to place equal emphasis on what happens when a lead becomes a paying customer. After all, the success of your software relies on the customer making the most of your product and continuing to use it after they sign up.

This process involves several stages, each of which represents a different step in the journey toward adopting your product.

In this article, we explain what product adoption is and why it’s important. We also step through the product adoption process and share some top tips for measuring and increasing adoption.

Why is product adoption important?

Product adoption helps to determine how widely your software is used and how much value it provides to customers. A product that’s widely adopted will typically have a larger user base, which can drive revenue for your brand and help your product succeed in the market.

Besides driving revenue, product adoption can have a range of other benefits. Let’s explore some of those now.

Build loyalty and advocacy

Product adoption can help you build a loyal customer base. Customers who use your product regularly are more likely to become followers of your brand and recommend your product to others. This can help you build a strong reputation and attract new business. If you couple this with a referral program, you can gain strong product-led growth.

Help build better products

Product adoption can help you gather valuable feedback from users. As they adopt your product and use it regularly, users can provide valuable insights into how your product can be improved and what features they’d like to see added. This feedback can help you refine and improve your product, which can lead to even greater adoption and success in the market.

Fuel growth loops

Greater product adoption can also help with growth. A growth loop is a mechanism to create a self-sustaining cycle of growth. A brand can use this loop to generate new users or customers, which in turn leads to increased revenue at an efficient cost. 

For example, many software platforms offer a freemium plan. Users on the freemium plan will see the words "powered by" and the company logo included in emails, landing pages, in-app widgets, and more. This is a value exchange — in return for using the product for free, the user exposes your brand to new audiences. Increased usage = greater exposure. Anyone who’s exposed to this branding can click to sign up to the product themselves. 

There are many great examples of growth loops in the product led space such as:

A screenshot of an invite to a Calendly meeting.
An example of the Calendly freemium plan "Powered by" logo.

Product adoption process

The product adoption process is a series of steps users go through as they become familiar with, and begin using, a new software product. 

This typically includes the following:

  1. Awareness: This is the first stage, where potential users become aware of your product and its benefits. This may happen through marketing efforts, word of mouth, or other forms of promotion.
  2. Interest: During this stage, users become interested in your product and start to research it further. They might read reviews, watch demos or tutorials, or ask for recommendations from friends or colleagues.
  3. Evaluation: Users evaluate your product to determine if it meets their needs and is worth the investment. They may compare it to similar products, try out a free trial or demo version, or seek out more information about its features and capabilities.
  4. Trial: Some users may try out your product on a limited basis to see how it performs in real-world situations. This may involve a free trial or a paid subscription with a money-back guarantee.
  5. Adoption: If your product meets the user's needs and expectations, they may decide to adopt it and start using it regularly. This can involve purchasing a license or subscription, installing the software, and integrating it into their workflows.

Product adoption metrics

There are several ways you can measure product adoption, depending on your specific goals and objectives, and your business needs. Here are some common methods of measuring product adoption.

Activation rate

Activation rate is a metric that measures the percentage of users who successfully complete a key milestone in the onboarding process. Activation typically depends on your product, but usually refers to the time at which a user gets to a value realization point or an “aha” moment – they understand the benefit of using the tool. 

product adoption metrics
Source: Lenny's Newsletter

Activation rate can be an important metric for software companies, as it can provide insights into how effective the onboarding process is and the overall adoption of your product. A high activation rate can show that your product is easy to use and that users find value in it, while a low activation rate might suggest the opposite.

To calculate activation rate, you can divide the number of users who successfully activate your product by the total number of users who have signed up, downloaded or installed your product. 

Engagement scores

Another way to measure product adoption is by tracking how engaged users are with your product. This can include metrics such as the frequency of use, the amount of time spent using your product, and the range and number of features or functions used. 

Conversion rates

For products that require a purchase or subscription, tracking conversion rates can be a useful way to measure adoption. This can include the percentage of users who complete a purchase or the percentage of free trial users who convert to paying customers.

Customer satisfaction (CSAT)

Measuring customer satisfaction can be a good way to gauge the overall success of your product adoption process. This can be done through surveys, customer service interactions, or other methods of gathering feedback.

Net promoter score (NPS)

NPS is a measure of customer loyalty and can be a useful way to gauge the success of product adoption. It’s calculated by asking customers how likely they are to recommend your product to others on a scale of 0 to 10.

How to increase product adoption

Let’s look at some strategies you can use to increase product adoption.

Clearly communicate the value of your product

It’s important to communicate the benefits and value of your product to potential users. This can involve highlighting key features and functionality, as well as explaining how it can solve problems or meet specific needs.

Once a user has adopted your product, continue to communicate value realization messages. Show them the value and benefits they’ll continue getting from your product. A great example of this is the Clockwise app. They send regular emails to users to demonstrate how they’re delivering on their value proposition.

product adoption

Make your product easy to use

A product that’s easy to use is more likely to be adopted by users. This may involve providing clear and concise documentation, offering training and support, and designing a user-friendly interface.

For example, as a project management tool Asana is fairly easy to use, but they also provide good documentation, with articles, tutorials and courses.

product adoption

When it comes to measuring ease of use or usability, you can look at metrics like:

  • The success rate (whether users can perform the task at all).
  • The time a task requires.
  • The error rate.
  • Users' subjective satisfaction. The System Usability Scale (SUS) can be used for this.

User research 

One way to test and get feedback from your customers is via user research. By using a tool such as UsabilityHub, you can run prototype tests, preference tests, and first click tests to gain insights from your users or your target audience into ways you can improve your product.

Offer a free trial or demo

Allowing users to try out your product before committing to a purchase can be a powerful way to increase adoption. This can help users get a feel for your product and see how it can benefit them before deciding. 

As outlined by our friends at OpenView Partners, a reverse trial can help ensure that users are experiencing the best version of your product. In this type of trial, users are given temporary access to all of your product's features and functionality. When the trial period ends and the user loses access to paid features they found useful, they’re more likely to sign up for a paid option to regain access.

Encourage word-of-mouth

Word-of-mouth can be a powerful way to increase product adoption, so it’s important to encourage users to share their experiences with others. This can involve offering incentives for online reviews or referrals, making it easy for users to share your product with others, and promoting user-generated content.

Invest in marketing and customer support

Marketing and customer support are critical to increasing product adoption. Marketing efforts can help to raise awareness of your product, attract new users, and create more engaging onboarding experiences, while customer support can help to resolve any issues or questions users may have.

Product adoption is a critical factor in the success of a software product. By following these strategies, you can help increase product adoption and drive the growth of your product.

Are you ready to get started with user research? Sign up to a free UsabilityHub plan to get access to unlimited active tests.

Frequently asked questions about product adoption

What is product adoption?

Product adoption is the process of introducing your new product to potential customers and helping them become familiar with it, evaluate its value, and begin using it. 

Why is product adoption important?

While marketing your product is important across any industry, SaaS companies need to place equal emphasis on what happens when a lead becomes a paying customer. Product adoption determines how widely your software is used and how much value it provides to your customers. A product that’s widely adopted will typically have a larger user base, which can drive revenue for your brand and help your product succeed in the market. Product adoption also helps to build loyalty and advocacy, build better products, and fuel growth loops.

How can you measure product adoption?

There are several ways you can measure product adoption, depending on your specific goals and objectives, and your business needs. There are some common methods though, including: activation rate, engagement scores, conversion rates, customer satisfaction (CSAT), and net promoter scores (NPS).

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