Within every customer success metric, the importance lies in their ability to reveal the customer experience of the product or service you are selling. This will allow you to add value to that experience and increase the growth of both your customer relationships and your own company.
At its core, that is what customer success is all about. To use close customer monitoring to combine customer data and use the resulting insights to proactive actions that deliver value. You can read more about important customer success metrics you should know if you have your own SaaS business.
If you are running a SaaS company, you are most likely familiar with the metric “Customer Retention Rate”. One very effective way to improve your company’s retention rate is by focusing on “Product Adoption” metrics.
User adoption metrics are a guide to future action. The first step is for you to make the calculation. The second step is to use that result to take proactive, targeted action.
When a new prospect discovers your business, you only have one chance to make a great first impression. Adoption metrics give you solid data and knowledge about that first impression from your audiences’ perspective. These metrics are extremely helpful for large-scale data analysis and can uncover essential aspects of the user experience.
Let’s start with a short definition of user adoption. Then we will give you an understanding of the importance of these metrics, before explaining three vital user adoption metrics you should know.
When defining adoption in connection to products and services, adoption is the act of beginning to use something new.
When we consider new product features and new users, there are four main types of user adoption you should know:
Because user adoption is an unbiased behavioral measurement it is consequently valid and reliable, as well as honest.
With the digital transformation of today’s businesses, we are now experiencing a situation where the customers are in control of the marketplace. It is fairly easy for any user of a subscription-based product and other SaaS services to switch to a competitor at any time. This means that customer value is no longer entirely achieved in a single up-front sales transaction. Instead, customer value is achieved over the years, through a regular cycle of subscription renewal.
As a consequence, the importance lies in nurturing customer growth so that you can facilitate recurring subscription renewals and revenue over time.
Before you are able to preserve an ongoing consumer relationship with continuous renewal, you need to get one thing right; you have to make sure your users are using the product or service and using it correctly. That all begins with the right user adoption.
Therefore, it is deeply critical that you have a working, ongoing understanding of the customer experience during the consumer journey.
There are three metrics you can use to calculate product adoption rates. These metrics can help you measure the success of a new product or service that you are offering.
The three user adoption metrics are “Adaption Rate”, “Time-to-first Key Action”, and “Percentage of users who performed the core action for the first time”.
Let’s take a closer look at them.
The adoption rate is the percentage of a number of new consumers to the number of total consumers.
In order to calculate this, you can simply use the following equation:
Adoption rate = (The number of new users / Total Number of Users) x 100.
For example, if you have 30 new users and the number of total users is 300: Your adoption rate is 30/300 x 100 = 10%.
This metric can be calculated on a daily, weekly, monthly or yearly basis.
The time-to-first key action is the average time it takes a new consumer to use an existing feature of your product or service.
It can also be the time it takes an existing customer to use a new feature for the first time.
The title of this final metric clearly explains its definition.
The metric “percentage of users who performed the core action for the first time” is the percentage of your users who have performed a core feature for the first time in a given period of time.
So there you have the three product adoption metrics.
In order to help you monitor and measure your SaaS adoption rates, you have the opportunity to apply some tools. These tools can review everything from the new user onboarding funnel to analyze the steps in which users are having difficulty with.
Once you start to use these product adoption metrics you might find that the metrics are not performing in a successful manner. If so, you need to act.
Below you can learn about five actions that can change the way your users interact with your product/service:
If you experience that a particular product feature is frequently receiving low adoption rates then you should rethink the way it is taught or prioritized. Likewise, if consumers continually show low product usage rates, you should consider the user interface tutorials.
Through repeated use and monitoring of these metrics, you can take any necessary action and ensure that your customers are always receiving maximum value.
As you see, the goal of employing user adoption metrics, as with all good customer success measurements, is to turn customer understanding into a better customer experience that provides value.
Therefore, to increase SaaS adoption, you have to grow your customer support and user onboarding process.
Making improvements in these aspects will improve the adoption of your SaaS product and consequently help grow revenue for your firm.