3 User Adoption Metrics You Should Know

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.

1) What is adoption?

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:

  1. Internal adoption: is when your existing users begin using new features of your product or service.
  2. External adoption: is when new users begin using existing features of your product or service.
  3. Adoption flags: is when new users adopt new features from your offerings. You should be delighted if they are successful in adopting these new features. If not, then you need to dig deeper into their usage problem and solve it.
  4. Routine adoption: is when your existing users adopt existing features of your product or service.

Because user adoption is an unbiased behavioral measurement it is consequently valid and reliable, as well as honest.

2) Why User Adoption is Important

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.

3) Product Adoption Metrics

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.

3.1 Adoption Rate:

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.

3.2 Time-to-first key action:

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.

3.3 Percentage of users who performed the core action 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.

Some great analytics tools on the market to measure product adoption with customizable funnels and many helpful resources includes tools such as MixpanelWoopra, and Amplitude.

4) How to Improve Your Customer Adoption Rates

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:

  • Better Onboarding: If you want to improve the adoption rates of future customers this can be done by examining the adoption rates of customers who have recently exited the onboarding process. Make sure to incorporate regular monitoring as it will reveal patterns in feature access, issues, or time spent in the product. This can help improve the initial training. Once you start to analyze the results of your potential consumers’ onboarding process, you can refine the stage and create optimized processes moving forward.
  • Establish Real-World Goals: You need to define, pursue, and honor goals that relate directly to a customer’s experience of business value. These kinds of goals build a direct connection from learning about the product, to implementing it within a real-world scenario, and finally on to using it to gain business success. It is highly recommended that the goals follow the SMART framework; they need to be Specific, Measurable, Attainable, Relevant, and Timely. The only way your consumers will remain loyal is if your product generates business value. Therefore, you should use goals to continually let your users know how today’s actions will lead to tomorrow’s success.
  • Continue to Improve: You should always strive for constant improvement. When you observe the customers’ progress through their user journey, you need to take what you have learned and use it to optimize your future processes. For example, if you see that customers are having trouble understanding the steps involved in onboarding, and then you can sharpen them to be easier to follow. Remember, once you make changes, you have to track user interaction afterward. This will tell you if the changes are working as planned.
  • Be Proactive: As mentioned earlier, customer success is about working to continually increase customer experience. Customer success metrics show how the consumer is using the product today. However, your team should also have an idea of how your consumers will need to use it in the future. So you should be prepared to launch personalized campaigns with clear business objectives around the usage of specific features.
  • Product Education Never Stops: It is always a good idea to offer a little extra guidance and support to your users. This can be an online tutorial, a training session or a free seminar. Providing extra product education related to your offerings can help you clarify how specific product features correlate to overall business success. You can use your consumer success metrics to create customized offerings that target specific features and product usage.

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.

5) Conclusion

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.

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