What is Product Adoption? Metrics & Tools to Measure and Increase

What’s your ultimate goal when creating a product?

There are many options.

But essentially and realistically, it boils down to two:

👉 Creating the most beautiful product that solves all user problems...

Or…

👉 Creating a product that users actually use in their daily lives to solve a specific problem.

I think we both know your answer.

And I think you are here because you want to achieve the latter.

Well then, read on or check out our TL;DR for a quick summary⬇️

TL;DR

• Product adoption refers to the process that results in (if successful) a loyal user who loves and uses your product regularly.
• Product adoption matters because:
• There are many qualitative and quantitative metrics for measuring product adoption, but the most important one is, of course, the product adoption rate. The product adoption rate formula is (new engaged users / total sign-ups) X 100.
• There are 5 main stages of product adoption: awareness, interest, evaluation, trial, and adoption.
• The Diffusion of Innovations Theory helps us understand why some users embrace change early on, and others refuse to give it a chance.
• UserGuiding can help you create product tours and other onboarding elements, allowing you to boost your product adoption rate without having to code. 

What is product adoption?

Product adoption, by definition, is a user experience where new and current customers engage and adopt a product inside and outside the product, through user onboarding practices, customer interactions, product updates, user/customer feedback collection techniques, and more. Tracked and utilized by thousands of businesses worldwide, it is a crucial aspect of customer health and plays a primary role in customer success, customer retention rates, churn rates, and overall, customer satisfaction.

👉 In short, successful product adoption means users are aware of your value and use your product regularly.

👉 Failed product adoption means users fail to see (or you fail to show) your value, and they churn.

Now that says enough about why product adoption should matter to you if you ask me.

But still, let’s dive a little deeper if you’re not convinced ⬇️

Why should product adoption matter to you?

I could personally name a dozen reasons why product, user, or feature adoption rates can level up your business.

But I'll keep it to 3 crucial reasons:

✅ Engagement 

Because increasing product adoption encourages your customers to engage more with your product.

✅ More positive user experiences 

Because when they use your product more and have a positive experience – product adoption at work – that creates satisfied customers and even converts unhappy customers.

✅ Higher feature adoption rates

Because good product adoption rate impacts feature adoption rates as well, meaning your product features will be more in use by your active users.

Now, all that, plus…

👉 For the most successful companies, higher adoption is indispensable for higher revenue.

SaaS start-ups, especially, are highly familiar with product adoption.

Because they continue to struggle with low retention rates, users not coming back after signing up, and they are always looking for a solution to keep their users for a long time to increase customer lifetime value.

A SaaS business has to sell the same product to the same user every month. It sounds like a curse, doesn’t it?

But product adoption is the best friend of a SaaS business.

Any effort made to improve product adoption can increase the average lifetime value and the conversion rate of the trial to the subscribed user and free to paying users.

Amazing, like a Swiss knife for product teams, isn’t it?

Here’s the thing, though:

You can’t improve what you can’t measure.

So, let’s take a look at the go-to metrics that your customer success managers might like 🤭⬇️

How to Measure Product Adoption

How well is product adoption working in your company?

Great?

Pretty bad?

You have no idea?

Most software people don’t either, and it’s okay.

Because measuring product adoption is not that easy. You can’t even calculate it directly.

You will need to track various metrics to get an understanding of your product adoption. It’s a complicated and difficult journey, but it has a great payoff.

Let’s see the top 3 crucial metrics you need to get a hold of your product adoption:

Top 3 Product Adoption Metrics

Many metrics can be used to measure product adoption.

But not all of them may be fit for all.

Still, there are 3 crucial product adoption metrics that can work for most.

Here are the user adoption metrics you need in order to calculate your adoption rate:

1- Adoption Rate

Adoption rate is the obvious number one.

The definition of adoption rate as a general term is the percentage of new users to all users, whether it is for a product or a specific feature.

Here's the adoption rate formula for visual learners:

(Number of new active users / Number of total users) X 100

How does it work in a real-life example? Like:

👉 For example, if you have 22 new users this month and the number of total users is 200 ⬇️

Your adoption rate is 22/200 x 100 = %11

It can be calculated on a daily, weekly, monthly, or yearly basis, depending on the data you need.

2- Time-to-first key action

Time-to-first key action takes into account how long it takes for product adoption to start.

👉 It is 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.

And if it takes longer (or shorter) than expected, you might need to look into it 🫣

Surprisingly, the shortest path might not be the best possible scenario all the time.

Imagine this:

The customer signs in, and the onboarding process pops up; they just spam the skip button.

And then accidentally click the action button.

Now how ideal is that scenario?

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.

This core action can be your “Aha!” moment.

Or it can be some other action during the customer journey of your choice.

What matters is figuring out which it will be, and how many do it.

👉 And using a third-party tool, there is no hassle in finding out how well your users are engaging with your core features or reviewing the new user onboarding funnel to analyze the steps with which users are having trouble.

Analytics tools such as Mixpanel, Amplitude, and Woopra, are great tools to measure product adoption with customizable funnels and lots of helpful resources.

Here’s more on our product analytics guide for you, and if you need an all-around in-app experience tool with the analytics to match… ⬇️

The 5 Main 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 product adoption 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.

The solution is simple: educating customers.

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 core features, a better pricing plan, powerful sales, and a center-stage value proposition with a smooth onboarding process can be very helpful at this stage.

2 – Interest (Information-Gathering Stage)

This is the stage where customers are attracted to the product and try to collect more information about it.

👉 Follow the steps of your potential customers and make sure you offer a good customer experience and have a strong customer brand, a well-designed website that converts, and good customer support.

Segmented email campaigns and conducting customer feedback surveys 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 them from alternatives.

Focus on creating a clear product roadmap for acquisition, decreasing customer effort score, especially in the signup and download stages, and collecting valuable feedback, especially from those you couldn’t convert.

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 a free trial period.

👉 If your product can afford to, try to offer free trials and a money-back guarantee to ensure your product is worth the shot.

Remember, if you cannot establish a form of customer loyalty and trust at the trial stage, loyal customers in the future might become a dream.

5- Adoption/Rejection (Buy or not Buy Stage)

At this stage, prospects determine if your SaaS product has value.

Then, they decide whether to adopt it – or not.

Normally, your potential customers who’ve managed to make it to this stage go through 3 sub-stages:

✅ Cognitive state (being aware and informed)

✅ Emotional state (liking and preference) and finally,

✅ Behavioral or conative state (deciding and purchasing)

If these stages are complete as well, then, congratulations. You have a new addition to your customer base AND a potential loyal customer.

Now, let me picture it for you:

Product Adoption Example from a Real-Life Example

Let’s assume that you are walking home from a long day at work:

1. You saw a billboard that says a new local pizza place named DeliciousPizza has opened. (Awareness)
2. When you went home, you looked for some information on the web to know more about DeliciousPizza’s menu and prices. (Interest)
3. You considered whether you want to try it or not. (Evaluation)
4. You said what the hell and decided to try a small pizza (just to be safe). (Trial)
5. It arrived quickly and was de-li-ci-ous 😋 so you’ve concluded that DeliciousPizza is your new go-to pizza place. (Adoption)

If only that was all there is to product adoption, but there are other factors as well.

Let's take a look ⬇️

What factors influence the adoption process of a new product?

According to Everett M. Rogers, there are 5 factors that influence the adoption of a product.

1- Relative Advantage

Does your product offer better value than your competitors'?

If a user is already using your competitor, they will be more likely to switch if what you offer is better.

2- Compatibility

Does your product fall in line with the characteristics of your audience?

Your product should be compatible with the lifestyle of your potential users and take into account the voice of the customer and common customer demands.

3- Complexity

Is your product simple to use?

Users should not have a hard time using your product, and their customer experience should be as smooth as possible.

4- Trialability

To what extent can users try your product?

If you suspect you might not be able to showcase your value proposition as much as you wish, you might try to expand your freemium plan or free-trial period.

5- Observability

How visible is your product to your audience?

You must be present where your audience is present, comment as much feedback from users as possible, and jump on opportunities for improvement.

The Product Adoption Curve (Diffusion of Innovations Theory)

Have you ever noticed that some people adopt new products or behaviors sooner than others?

In 1962, Everett M. Rogers, a professor of rural psychology, developed a theory called diffusion of innovations to explain the product adoption curve.

Rogers found that individuals within any society fall into one of five different adopter groups based on how early or how late they adopt an innovation.

While explaining the product adoption curve, Rogers’ theory tells us one important tip:

👉 If you want to promote the widespread adoption of a new product, you need to market to each adopter group differently using distinct communication channels and messages.

Let's have a look ⬇️

1- 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.

In that sense, we can say that the innovators are your adoption champions.

It is in your best interest to capture them first to influence the rest of your users to join in.

2- The Early Adopters 🧩 (13.5%)

The early adopters are also a small forward-thinking group and are often highly respected as opinion leaders.

Upon their support for the innovators, the rest of the groups get more confident in adopting.

3- 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.

4- 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.

5- Laggards 🥱 (16%)

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.

From innovators to laggards, reaching users is a challenge without a solid game plan.

Let's go through a few methods that can help ⬇️

How to Increase Product Adoption

Seeing an improvement in the product adoption metrics is every product person’s dream.

If you be a nice product person, one day you can see the product adoption fairies and wish for quick, scalable product improvement 🧚 

Just kidding!

"Oh, but Mert, I’m sure there is a simple tip that will skyrocket my product adoption."

Nope. There aren’t any magic tricks for that, unfortunately.

You just have to work for it!

Here are 5 ways to grind for better product adoption:

1- Improve your product

This is a no-brainer.

If your product is better and offers more value, your product adoption will be improved.

Don’t know where to improve? Just ask your users.

Here’s how you can collect feedback and utilize it effectively.

Offering something better or new can be more helpful in convincing users to try and adopt your product, so don't miss out on our product updates guide either 👈

2- Make your support more supportive

There will always be pain points no matter how much you fix your product.

And some of them will be a reason for churn.

Unless, of course, you are there for users every time they experience something bad or need assistance.

Make sure that reaching out to support is easy, and it is even easier to find it on your UI.

And I’m pretty sure I don’t need to tell you that your support representatives need to be friendly and knowledgeable 😉

3- Invest in a better user onboarding experience

Maybe the problem is your user onboarding.

For most low product adoption rate cases, it’s the user onboarding.

It’s simple:

If you can’t teach your product effectively, users can’t use it.

Therefore, you’ll need to take a thorough look at your user onboarding to see if there are any pain points.

And then you'll get to work to fix them.

But how effective can your onboarding be if you are dependent on the developers to create it?

Here's a solution to the root of the problem:

Create no-code user onboarding experiences with UserGuiding, fix your Product Adoption problems

UserGuiding is a no-code digital adoption solution, and it is one of the easiest user onboarding tools to use.

It is easy to use, easy on the eye, and easy on your pocket.

You can use UserGuiding to create:

✅ Interactive guides, product tours, walkthroughs, 

✅ In-app messages, hotspots, tooltips,

✅ User onboarding checklists,

✅ In-app surveys and NPS,

✅ Resource centers, and more...

...Powered with powerful analytics, customization, localization, user segmentation, and targeting.

Here’s UserGuiding in action on LinkedIn (I’ve created this in under 5 minutes!):

👉 Give UserGuiding a try, for FREE 👈

4- Engage with users inside the product

Sometimes users might need a little help or a push.

Emphasis on the little; tutorials or onboarding checklists might be overdoing it sometimes.

Whereas in-app messages are the perfect elements for the job.

You can call users to a certain action, give valuable information, or gather feedback with in-app messages.

But I won’t go into more detail, because you can read all about in-app messages in our guide here 👈

5- Engage with users outside the product

Users might also be leaving your app and not returning to it for, like, forever.

This time they might need a little push outside the product.

That is what emails are for!

And email onboarding for better product adoption is not a new concept either; there are great guidelines and examples out there.

Here’s our email onboarding article to get you started 👈

Wrapping Up...

Product adoption matters for all SaaS businesses.

But for product teams, it might be one of the most important matters at hand.

If you are not trying to figure out how to improve it, you might be falling behind in the competition.

But as long as you know your way around how to figure it out for your own product and customer base, you'll be fine.

Remember: in-app experience tools (like UserGuiding) are your friend 😎

Good luck in advance!