Product Adoption: What It Is and How to Measure It

Product Adoption: What It Is and How to Measure It

January 23, 2024
Customer Onboarding

If you are responsible for ensuring successful product adoption, you have likely encountered various challenges in pursuit of this goal. Insufficient product or feature awareness, a complex onboarding process, inadequate user education, and low customer support resources can all be stumbling blocks.

These are real hurdles, no doubt. But with this guide, you can break them down one by one. You’ll learn why product adoption is important, how it’s measured, and tips for improving your product adoption rate.

What is product adoption?

Product adoption refers to how customers start using and integrating a new product into their regular workflows. It involves the initial awareness, understanding, and acceptance of a product, followed by its consistent use over time.

Customers are more likely to continue using and benefiting from your product when they fully comprehend its functionality and usefulness. Failure to grasp its potential could lead to discontinued use.

Why is product adoption important?

Product adoption is important for several reasons:

  • Maximizes revenue: Higher product adoption leads to a bigger user base through subscription renewals and more sales. This is a driving force of SaaS revenue and growth.
  • Enhances user feedback loop: Widespread product adoption generates a larger pool of user feedback, enabling rapid iteration and improvement. This is important for product teams to align the product with user needs better.
  • Improves customer retention: Users who adopt and integrate your product into their workflows are likelier to become loyal customers, contributing to improved customer retention rates and reduced customer churn.
  • Improves customer lifetime value (CLV): A larger customer base and sustained adoption contribute directly to CLV, creating a consistent revenue stream over an extended period.

6 stages of product adoption

Product adoption involves six stages consumers typically go through when encountering a new product.

1. Awareness

This is when potential users discover a new product for the first time. They may hear about it through paid marketing campaigns, word of mouth, webinars, or other promotional activities. The goal is to grab people’s attention and get them curious about your product. At this point, individuals might not fully understand the product, but they understand it may hold some value for them.

2. Interest

In this stage, users may seek additional information, read reviews, or explore the specific features and benefits of your product. This exploration enables users to better understand how your product aligns with their specific use cases and how it will solve their pain points.

3. Consideration

In the consideration stage, potential adopters evaluate your product in more detail. They compare it with existing alternatives, weigh the pros and cons, and assess how well it meets their needs. Companies often provide demos, free trials, or additional content to help potential customers make better decisions.

4. Trial

Once individuals are sufficiently intrigued, they may proceed to the trial stage. This involves actually using the product or experiencing it firsthand. Companies offer free trials or freemium versions to encourage people to try the product. The goal is to convert interest into tangible experiences so users can see its benefits in action. Consider the trial stage as your shot at letting first-time users experience the value of your product.

5. Activation

At this point, potential users have moved beyond awareness and interest—they have actively engaged with your product. Activation involves getting users to take key actions, such as logging in and setting up a password, to demonstrate their intention to use your product.

6. Adoption

Successful trials lead to the adoption stage, where users integrate your product into their workflows. They may continue with your free offerings or choose to purchase a subscription.

How is product adoption measured?

Product adoption is measured through various metrics, including:

  • Number of users: Tracking the total number of users or customers over time
  • User growth rate: Calculating the rate at which the user base grows to reveal user adoption trends
  • Frequency of use: How often users engage with your product within a given timeframe
  • Time to value: The time it takes for a user to realize the benefits or value promised by your product after their initial interaction
  • Feature adoption: How long it takes for users to integrate and start using a new feature within your product. Monitoring feature adoption rates helps product managers and developers assess the impact of introduced features.
  • Activation rate: The percentage of users who take a specific action that indicates their initial engagement with the product, often after sign-up or installation
  • Upsell rate: The percentage of existing customers who upgrade or purchase additional features beyond their initial subscription. Over 50% of SaaS companies reported that they derive 10% of their new revenue through upselling.
  • Churn rate: The percentage of users who stop using your product over a specific period. A high churn rate indicates that many users are leaving your product, decreasing your overall user base and revenue.

Tips for improving your product adoption rate

Here are some tips to optimize your product adoption rate:

  • Simplify user onboarding: If the user onboarding experience is unsatisfactory, 74% of potential customers might switch to another solution that offers a better one. Begin by minimizing the number of required fields during sign-up. Then, provide a step-by-step guided tour of your product’s key features. Make the most of in-app messages, and send onboarding emails with valuable tips.
  • Educate users through a customer education platform: Provide training resources to ensure new users fully understand your product and its capabilities. Create tutorials, and build walkthroughs, FAQs, and documentation to cater to different learning preferences. Another option is to create a dedicated training center using a Learning Management System (LMS). An LMS platform helps manage, track, report, and develop employee training, covering everything from initial customer onboarding to continuous education. Use your LMS to drive adoption by training your end users.
  • Integrate customer feedback: Actively getting and incorporating customer feedback is crucial for continuous improvement. Build clear channels for feedback submissions, including surveys and feedback forms. Communicate product updates driven by user feedback to demonstrate your commitment to customer satisfaction.
  • Provide great customer service: Customers are 2.4 times more likely to stick with a brand if their problems are resolved quickly. It comes down to good customer service. Offer multiple support channels, like live chat, email, and a comprehensive knowledge base. Also, invest in training for support teams to enhance technical knowledge.
  • Remove barriers to adoption: Eliminating barriers to adoption is key to attracting a wide user base. Analyze customer journeys to identify points where users commonly drop off. Use tools that record user sessions or show heatmaps to see how people use your product and identify where they may fall off in the customer journey.. Alternatively, consider giving users free access to new features for a limited time.

Skilljar offers customer education solutions for improved product adoption

Skilljar is a customer training and education platform that enhances product adoption through Customer Education solutions. It has a user-friendly interface for creating personalized learning paths based on roles and skill sets. With its native quizzing engine, users can engage in interactive assessments to reinforce their understanding.

Plus, Skilljar has a valuable customizable user experience feature for companies seeking a tailored solution. It allows companies to build a training portal that integrates with their brand’s visual identity.

Sign up for a Skilljar demo to see how it simplifies customer training efforts for better product adoption and business results.

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