Why are user adoption rates critical?
If a company has a high user adoption rate, it’s an indication that far more individuals are adopting the product than are abandoning it. That usually means the company is acquiring new users very efficiently.
Take, for instance, a mobile gaming company that acquires users through online ads. If an increasing percentage of potential users who click the ads love the game and continue playing, the company will make more and more money off of the same initial advertising investment.
Greater efficiency leads to greater growth. Popular measures of user growth such as app stickiness or vitality, for instance, are really just indicators that a company is acquiring users at a faster rate than it is losing them.
Companies with high user adoption rates enjoy:
- Lower cost-per-acquisition (CPA)
- Higher retention
- Higher marketing ROI
- Higher customer lifetime value (CLV)
- Lower customer marketing and retention costs
Any business that benefits from repeat customers is a company that benefits from higher user adoption. For example, high adoption makes:
- SaaS buying committees or decision-makers more likely to renew
- Financial services users more likely to stick with an app
- Consumer tech users more likely to form habits around an app
- Media and entertainment readers more likely to visit the site repeatedly
- Retail and e-commerce shoppers more likely to place repeat purchases
- Telecommunications consumers less likely to churn
To ensure that users find value, stick around, and adopt, companies need to guide them through their different stages. To do this, companies need a user adoption strategy to showcase benefits , but first let's have a look at key metrics that show you how successful the product adoption is going.
Your Key Product Adoption Metrics
There are 3 metrics that will help you know where you are with the product adoption situation.
Here are the user adoption metrics you need to calculate your adoption rate:
1 Adoption Rate:
It is the percentage of new users to all users, whether it is for a product or a specific feature.
For example, if you have 34 new users this month and the number of total users is 265:
It can be calculated on a daily, weekly, monthly, or yearly basis.
2 Time-to-first key action:
The average time it takes a new customer to use an existing feature, or an existing customer to use a new feature for the first time.
3 Percentage of users who performed the core action for the first time:
The name of this metric clearly reveals its definition. It is the percentage of customers who have performed a core feature for the first time in a given period of time.
To monitor and measure these metrics, you can employ tools which are able to review the customer's health. Customer health is crucial to the success of winning advocats and fans and it starts from the first login of a new user and ends up in their aha moment, and usually beyond...
Product Adoption Stages
Every user respectively goes through the 5 stages of product adoption no matter what kind of product it is.
Let’s see what each stage is about and some tips to improve them.
1 – Awareness (Introduction Stage):
In the first stage of the new product adoption process, potential customers enter your website to know about a product but they don’t have sufficient knowledge about it yet.
Teaching Customers can be helpful: Prospects may not be aware of the existence or importance of a certain problem. On the other hand, customers may realize the problem but don’t know the solution. Educating customers about either the problem or the solution can help provide a strong awareness.
An important step is making a product more recognizable and making customers be aware of it. Bringing new and differentiated features, low price, sales, proposed quality into the forefront with a smooth onboarding process can be very helpful in this stage.
2 – Interest (Information-gathering Stage):
It is the stage that customers get attracted to the product and try to have more information about it.
Follow the steps of your customers instantaneously and make sure you have strong customer support. Sending segmented emails will increase product adoption at this stage as well.
3 – Evaluation (Consideration Stage):
At this stage, customers determine whether a product is worth trying or not.
Help your prospects evaluate your product objectively. Make them see the aspects that differentiate from alternatives to it.
4 – Trial (Sampling Stage):
Users try your product to see how efficient the product is for compensating customers’ needs. It can be either the first purchase or free trial period.
Give free trials and a money-back guarantee to ensure your product is worth employing.
5- Adoption / Rejection (Buy or not Buy Stage):
Prospects determine if your SaaS product has the value and decide to adopt it or not. In the last stage of the new product adoption process, customers proceed from a cognitive state (being aware and informed) to the emotional state (liking and preference) and finally to the behavioral or cognitive state (deciding and purchasing).
You need to focus on your customer’s needs and it's essential to align your User adoption strategy with the different Adoption Stages. Like a Funnel in Marketing from Viewer to Customer it is important to tailorize your strategy towards a consistent User Journey Experience. As this User Journey is unique as your customer needs, let's have a look on how your customers can perceive change and whom to tackle to successfully increase the product adoption.
The Product Adoption Curve
There are different groups of Users during the adoption process. It depends on your business but it was helpful for us to focus on Innovators in the early Alpha Phase and bring in the early adopters in Beta rollouts.
The Innovators (2.5%)
Innovators are a small but very important group because they are always the first to learn about and adopt an innovation.
The Early Adopters (13.5%)
The early adopters are also a small forward-thinking group and are often highly respected as opinion leaders.
The Early Majority (34%)
The early majority takes time to make decisions. They will observe others’ experiences and will only adopt a product once they are convinced it has real benefits and that it is the new status quo.
The Late Majority (34%)
The late majority is more resistant to change but they are very responsive to peer pressure. They want innovations to be very well tested.
Laggards are highly unwilling to change and they also can be hard to reach with marketing campaigns. Because they often have very minimal exposure to media.
Now you know what to track and what to look for when measuring the success of a product launch. If you want to learn more about on How to use these key metrics to build A Winning User Adoption Strategy check out our latest Blogpost.