How to measure & drive SaaS product adoption [2022]

How to measure & drive SaaS product adoption [2022]

There are plenty of things you probably want to get right with your SaaS business.

Hell, there are plenty of things you need to get right if you’re going to be successful.

  • Build strong relationships with potential users and customers alike
  • Make it easy for users to sign up and become paying customers
  • Allow average folks to become power-users as quickly as possible

Lucky for you, there’s one concept that incorporates all these SaaS ideas and successful SaaS examples into two words.

Product adoption.

Let’s learn all about how to measure product adoption and of course improve it to give your SaaS business a huge leg up.


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Table of contents


Implement product tours in just 5 minutes

Driftly Homepage With Tour

Use no-code product tours to nudge users towards that WOW moment. Guide your customers towards the most impactful areas of your software as they breeze through onboarding, adopt core features and become life-long power users.


What is product adoption?

Simply put, SaaS product adoption refers to the journey new customers embark on as they’re introduced to, start engaging with and eventually become power users of your software.

You can think about the term “adoption” as it’s more commonly used when describing parents making a child part of their family.

Before adopting a new child, potential adoptee parents need to met the child, get to know them and eventually make a strong enough connection to commit to giving them a permanent home.

It’s a similar story when potential customers adopt your product.

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What is the product adoption curve?

The product adoption curve simply conceptualizes when and how different segments of the market adopt new products based on the stage of the business.

1. Innovators

Innovators are your very first customers. Often, they’ll start free trials or become paying users before the business has proven itself in order to get early access to your SaaS product. These folks love to give feedback and don’t mind a bug or two as long as they’re not affecting anything mission critical.

Example: Friends, family, online friends, other small business owners in your space.

2. Early adopters

Early adopters are similar to innovators in that they want to get in the door early and don’t mind small bugs. But these are often the first big test for your SaaS business in that these early customers will only continue to pay for software that works for them. Keeping these early adopters on board requires that you’re at least approaching product-market fit.

Example: Small business owners in your space who you cold DM on Twitter.

How I found an early customer on Twitter today.

1. Searched competitor handle and sorted by latest
2. Found tweet from person with positive recommendation
3. DM’d them to ask about their experience (no sales pitch, just asked for feedback)
4. Let Driftly do the talking

See the tweet

3. Early majority

Early majority customers are the first wave of users that would rather work with established, proven products. These are the folks who need to see social proof, case studies, see good online reviews, hear good work-of-mouth and want to see you’ve been around for a while.

Example: Businesses that find your SaaS product by searching Google for what your software does.

4. Late majority

The late majority are similar to the early majority but are even more risk-averse. They want to cross every “t” and dot every “i” before giving your product a shot. This is for good reason, as late majority customers are often already running successful businesses and can’t afford to make big mistakes in front of their large user bases.

Example: A member of a team has been on your email list for a year and sends it to their manager to see if it’s a good fit to solve their pain point.

5. Laggards

This is often the largest section of the market because it really describes all the customers and users who haven’t tried your product. For whatever reason (team size, scale, risk aversion, etc), these folks are really uncomfortable trying new software and will often require a lot of “sales” time to get them on board.

Example: A large team brings it up for 6 monthly meetings in a row before decided to have a junior team member put together a 5-page report to see if the tool is a good idea to try out.

What makes SaaS adoption a struggle sometimes is that the company may be unknown and/or small. So the risk is the business sustainability / longevity.

See the tweet

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Why is adoption important in customer success?

Whether you’re a solo founder or part of a growing customer success team, it’s important that you create and develop compelling adoption processes for your product and individual features.

Why?

Successful SaaS businesses depend on growing Monthly Recurring Revenue (MRR) as well as their profit margins.

This can only happen if you have a low churn rate (and high retention rate), meaning the majority of users become paying users and stay that way.

Even better, you build expansion revenue from them as they upgrade to bigger, more expensive plans as their businesses grow and they need more features.

To accomplish all this, your customers need to have positive takeaways throughout their entire experience with your product. The better they feel about your software and the more value they get from it, the easier it will be for them to keep paying your business month after month, year after year.

That’s when a customer success team comes in. It’s literally in your job title to make customers of your product successful. That means a huge part of your day-to-day should be focused on making this customer adoption process as frictionless and unforgettable as humanly possible.

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What are the 6 stages of the product adoption process?

1. Awareness

All new customers must first be introduced to your business and product.

This can happen in a lot of different ways.

But regardless of how it happens, you want to give potential customers a great interaction with your company if you want to stand a chance of them continuing in the adoption process.

Example: A potential customer has a big pain point and search Google for answers. They find and read a blog post you wrote and did some SEO work on. You solve their problem quickly and effectively through your content and make their day.

“This one thing was really dragging my day down. So happy I found this article that helped me fix it. And in only 5 minutes too! It’s so well-written. I wonder what company put it together?”

2. Interest

Once a potential customer has found your SaaS business, you pique their interest.

This most often happens when a potential customer has a pain point that your product solves. The bigger the pain point, the better!

Example (continued): The potential customer sees one of your in-content Calls To Action (CTA) that your SaaS product actually solves a big problem for them related to what they searched Google for.

“Hmm, this actually looks pretty interesting. If this actually does what it says it does, I need to at least learn a bit more about it.”

3. Evaluation

After a potential customer has convinced themselves they they are indeed interested in your product, it’s analysis time.

They’re going to do their due diligence to see if they actually want to invest in your product.

Example (continued): The potential customer clicks your CTA and reads through your homepage, feature pages and pricing to see if this is the right software for them. They also book a sales call and forward their findings to their team to get their thoughts.

“Looks like an interesting SaaS product! I booked a discovery call with you because I have a few questions about the software. Looking forward to chatting.”

4. Testing

This is a big step in the adoption process because it’s when a potential customer takes the first step towards becoming an active customer.

Often before buying, customers will give your product a test run through a free trial, demo call, etc.

I would also count actually becoming a monthly paying users here. Often potential customers will pay for a single month of product usage as a test run because it’s a good way to test out a product without a long-term commitment.

Example (continued): The potential customer deems your product of worthy to try. They start a free trial of your product and begin onboarding. They use the product as they see fit and are constantly analyzing everything about the product, most importantly the value they’re getting out of it.

“This product is really intuitive and was easy to set up. It solves the exact pain point I had when I found this tool. Plus, it has a few other awesome features I didn’t know about. Seems like paying for this is a no-brainer!”

5. Commitment

The big moment every SaaS business loves to experience.

The potential customer enters their credit card details and becomes a paying customer through a monthly or annual subscription.

Cha-ching!

Example (continued): The potential customer officially becomes a paying customer.

“Shut up and take my money! I’m pumped to get rocking and rolling with this software.

6. Power-user

Once a potential customer becomes a paying user, the customer journey is not over.

Far from it!

This is actually when the hard work begins to keep that user paying for as long as possible (and increase their Lifetime Value).

For them to truly “adopt” your product, they need to consider it not just a fringe piece of software they pay for.

It needs to…

  • be core to solving big customer pain points.
  • give customers clear and significant financial ROI.
  • become a subscription customers will never consider cancelling.

Example (continued): The new customer starts using your software more frequently and begins considering if this is a fringe tool or core to their needs.

“I really hope this product delivers what it promises on the website. If it gets my business the ROI has for their other customers, this will be our go-to tool for a long time.”

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When does onboarding end and adoption begin?

Let’s take a quick sidebar. This is a common question so let’s address it.

The end of onboarding and the beginning of the early days of product adoption can easily blur together.

You’ll come up with different answers depending on who you ask and what SaaS product you’re talking about.

An easy general answer here is that onboarding ends shortly after commitment. Once a new user has tried out your product for the first time and been introduced to all the most impactful features, onboarding can be considered over.

Then the transition to adoption officially begins.

  • Do users use your product often?
  • Do they easily understand the ROI they’re getting out of it?
  • Is it easy to become a power user?

We’ll talk about how to use analytics and SaaS metrics to dive deeper into the customer adoption process here in a bit. But this is a good answer to describe when onboarding ends and adoption begins.

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How to measure product adoption & customer onboarding?

Measuring onboarding when doing the same for product adoption is a good idea.

A positive onboarding experience will lead to stronger product adoption in the future for most users.

And once you learn how to measure product adoption (and onboarding as part of it), you’ll have a much better handle on how successful your users really are with your product.

Most SaaS businesses will measure their customer onboarding success by using many of the metrics mentioned below in this article.

Time To Value (TTV) is probably the most direct way to measure customer onboarding though.

Here are a few steps you can take to measure this:

  1. Define what your most impactful, highest ROI features are for your users
  2. Build out internal tools to measure how often those features are used
  3. Take those usage rates and work to improve them

If you don’t want to build this out internally yourself, why not give Driftly a try? Our product tours are specifically built to guide users through a welcoming onboarding experience and show them your SaaS tool’s biggest features.

And the best part? Analytics are baked right into our tool so you can measure onboarding success through tour completion rates and improve them over time.

Driftly Analytics
Easily measure onboarding and hit your product goals!
@FosterNZ

Good marketing is not enough to get paying users for your B2B SaaS startup. Neither is adding features to the product. To grow quickly and minimize churn, you need to craft the user onboarding experience in your software.

See the tweet

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Questions to ask & answer to improve customer adoption

As you start attracting attention to your product during the Awareness phase, you’ll want to set up a few systems to collect qualitative data as users begin and proceed through their adoption journeys.

Who?

  • Who makes it all the way through the adoption process?
  • What percent of your user base would you consider “fully adopted”?
  • What characteristics or behaviors do they have in common?

What?

When?

  • When do you consider a customer “fully adopted”?
  • When do you know a customer won’t become “fully adopted”?

How?

  • How long does it take your average customer to become “fully adopted”?
  • How often do they use specific features?
  • How did they get to adoption?
  • How much support did they need (and what did they need help with)?

There are lots of ways to answer these questions! Customer interviews, surveys, analytics, heat maps or mouse tracking, etc. It may take weeks or even months to answer all these questions but take your time to get good answers.

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Using analytics and metrics to improve customer adoption

The value of getting qualitative questions and answers is impossible to replace.

And while you should always be collecting this kind of information, you’ll also want to start collecting quantitative data once you have a good number of users using your product.

Here are the analytics and metrics you should be measuring and working to improve to make your product adoption even more effective.

Monthly Active Users

Monthly Active Users (MAUs) is a simple measurement of how many users have logged into your software in the past 1 month (~30 days).

1,000 users logged into your software over the past 30 days. That’s 1,000 MAUs.

The more MAUs you have active on your software, the more likely your platform is a key tool for your customers. So the more MAUs, the faster the product adoption.

Adoption rate

Adoption rate is the obvious choice for measuring product adoption. You can measure adoption rate by comparing MAUs against total users (MAUs / Total Users).

100 active users last month out of 200 total users = 50% adoption rate.

The higher this rate, the higher percentage of your users are using your software regularly. This means more adoption!

Free > paid conversion rate

This metric only applies for those who use free trial or freemium activation strategies. Conversion rate can be measured by comparing the number of paying users to the total number of new users (free and paying) who start over a given time period (paying/free).

100 users started free trials last month and 20 became paying users = 20% conversion rate.

The higher this percentage, the more free users are converting to paying users. Paying users are more invested in the product because they need to see an ROI from it and the more invested your users are, the more likely it is they’ll continue in their adoption journeys.

Time to value

Time to value measures how long it takes a user to reach that “aha” moment that tips them towards becoming a real power user.

It’s impossible to define this generally because every SaaS platform is so different.

But often, this “wow” moment will come after using your tool’s most impactful, highest ROI features.

And you want as many users to experience this moment as quickly as possible.

100 users start using your software, 50 use your highest-impact feature within 7 days. TTV is 7 days (the 50 who didn’t use this feature aren’t counted but we do want to decrease this number too).

Try using a tool like Driftly to integrate checklists into your SaaS’ dashboard. This is an easy way to lower TTV and nudge more users to use your biggest features.

The first checklist most of our users publish is a list of their highest ROI features!

Usage frequency

Usage frequency simply measures how often the average user uses your tool.

  • 1x per month
  • 1x per week
  • 1x per day
  • 10x per day

This is a fun metrics because it’s the best way to measure if the product you’ve built truly becomes part of people’s life.

Think about social media platforms like Twitter, TikTok, Reddit, etc. Most have become massive successes because of how they’re able to become a core part of people’s daily ritual.

To be clear, your tool can still provide massive value if users use it 1x per month. And usage frequency of 10x per day doesn’t necessarily mean your SaaS is successful.

That being said, higher usage frequency does suggest your tool is becoming a more core part of users’ attention. This means adoption is strong and active.

Expansion revenue

Expansion revenue measures how much additional revenue your business generates from existing users upgrading to more expensive tiers or plans.

You have 100 active users all paying $100/mo. Over a month, 20 upgrade to $200/mo plans. That’s $2,000 of expansion revenue in the given month.

This metric is an easy way to tie product adoption with financial success. Users who are having success with your product and repaying that success by paying more are clearly on their way to becoming power users.

The holy grail of SaaS is generally considered to be when expansion revenue outpaces churn, so that net subscription revenue is *growing* each month even if you don’t add any new customers (Negative Net Churn).

Took just over 6 years, but Ghost is just about there now.

See the tweet

Average Revenue Per User (ARPU)

ARPU measures the average revenue generated by your customer base in a given time period.

You have 100 users all paying you $100/mo. Your ARPU is $100.

ARPU is somewhat tied to expansion revenue. The more expansion revenue you generate, the higher your ARPU.

ARPU is more of a birds-eye view on the health of how your business generates revenue. Often the higher your Average Revenue Per Customer, the better your product adoption and the more value you’re providing for customers.

Revenue churn

Revenue churn measures how much subscription revenue you’ve lost in a given time period from people cancelling their subscription.

You have 100 active customers all paying $100/mo on the 1st of the month. On the 1st of the next month, multiple of those active customers have cancelled $1,000 worth of monthly revenue. That’s 10% revenue churn.

Like expansion revenue, this is a good way to see how adoption and financial success are tied for your SaaS business.

But in this case, you’re seeing the customers who didn’t adopt successfully and can find patterns to address what may be causing users to churn.

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How to improve product adoption?

Now we get to the key question…

How to actually drive user adoption (and improve the key metrics we described above)?

Here are a few best practices that you can swipe. Test them out and see if they work to increase the rate of your SaaS product’s adoption.

Build for adoption from day one

If you’ve just recently started your SaaS business, start thinking about product adoption right now.

It’s much easier to keep this a priority from day one than to see poor metrics down the line and try to improve adoption when your onboarding process is already in place.

Try using a tool like Driftly to integrate product tours into your SaaS’ dashboard. This is an easy way to keep users who are onboarding focused using your software’s most impactful features and continuing their adoption journey.

Driftly Homepage With Tour
Hold users hands until they get enough momentum to continue product adoption themselves.

Personalize onboarding for every user

This one sounds complicated but can actually be easy if you have software that can do this for you.

Every unique user needs unique onboarding. This means your software will meet every user where they are and help them with the support they need.

If you’re building SEO software, people are going to use it much differently if they’re an SEO beginner or a seasoned pro. Onboarding should take this into account to give both customer types the best adoption experience possible.

Give Driftly’s product tour segmentation a try. You can easily build checklists and product tours based on customer types. In just a few minutes, you can implement unique onboarding for every kind of customer type that signs up for your software.

Easily implement product tours that only appear for your hardcore fans!

Keep honing your marketing channels

Your marketing channels don’t just need to drive a lot of website traffic and free trials.

They need to be sending you paying users and improving your profit margin and bottom line.

Continue to keep an eye on your marketing channels over time.

  • Are they producing free users?
  • Are they producing paying users?
  • Are the free users they’re producing turning into paying users?

If your marketing channels are performing at the top of the funnel but not affecting your bottom line, it may be time to attack your marketing channels from a different angle or try new ones entirely.

Implement engagement (and re-engagement) campaigns

Just getting a new user started on a free trial is the easy part.

You need to engage them during that trial and give them every opportunity to become a paying user.

  • Set up an email sequence for new sign ups that tells them about your product’s best features, company news, how to upgrade their account, etc.
  • Set up email automation for when customers achieve key goals, hit certain ROI, etc.
  • Set up email automation for customers who aren’t using your software to re-engage them.

Talk to customers

This is essential in the early days of your SaaS business but should always be a focus so you can stay connected with the needs of your customer base.

  • Gather feedback using a widget in your software’s dashboard like Marker.io
  • Send an email blast out to a list of users asking for feedback using ConvertKit.
  • Manually email some of your favorite users to ask them some key questions.
  • Ask users to complete a quick feedback survey with Typeform.

Resource: Here’s a list of 9 customer interview questions to ask

I came up with SaaS building hack for founders.

Instead of building features all at once…

1. Use SaaS boilerplate
2. Build 1 feature for 1-2 weeks
3. Market and sell for 3-4 weeks
4. Listen to customer feedback
5. Repeat

See the tweet

Build out helpful documentation

Having well-written documentation can be the difference between a frustrated customer base that always writes into support and a collection of happy customers who return to your documentation time after time for self-help.

This will minimize your support load. Even more importantly, you’ll help your users make your product work better for them, leading to better adoption.

Check out Driftly’s documentation as an example. We’re always adding new docs, videos and other helpful tools to make self-help as simple and fast as possible for our users.

Keep support a high priority

Providing effective, fast support is one of the best ways to turn average customers into power users.

No SaaS product is perfect. At some point, customers will need help with something and this becomes a blocker for them in their adoption journey.

If you can unlock users at these points as quickly as possible, you’ll keep them on the adoption path.

  • Email support doesn’t have to be complicated. You can use a tool like Keeping to provide great email support from your Gmail inbox.
  • Once you get to the point of having 2+ folks doing support, it may be time to upgrade to real help desk software. There are plenty out there to consider, but Zendesk is one option.
  • If you have the team and bandwidth, a tool like Intercom is a great way to give your users access to livechat and email support all with one tool.

Use analytics and metrics…

…to inform onboarding and adoption choices

This is a big one!

When you have a sizable customer base, that patterns you see through regularly reviewing analytics and metrics can easily point you in the right direction when it comes to making adoption even easier for your users.

  • You see that user churn is fairly low for paying users during month 1 and 2. But it doubles in month 3. How come?
  • Your free trial to paying user conversion is strong 9 months of the year. But it takes a big dip during the winter months. Why is that?
  • Your number of monthly active users and adoption rate both take a big dip this month compared to last month. What big change did you make to onboarding last month?
  • You have strong expansion revenue. What profile of customer is most likely to upgrade? What features do they upgrade for?

…to track at-risk behavior

Often when users are in danger of churning or cancelling your product, there are warning signs. The goal with SaaS is to retain as many quality customers as possible!

Keeping an active eye on when this is happening is a great way to track at-risk behaviors and prioritize engagement and extra support for users in danger of churning.

  • They may start to write into support more often. You can set up a notification when support activity increases for a customer.
  • Perhaps they begin showing frustration in their communication. Your support team may simply want to keep an eye out for messages that have negative sentiments.
  • Maybe they simply stop using your software. You can try setting up monitoring software to alert you when users hit a certain threshold of inactivity.

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What’s next?

There you have it.

You started this blog post wondering, “how can I better drive product adoption?”

Hopefully you’ve learned a thing or two. Not just about actions you can take to improve your product adoption pipeline, but also SaaS ideas and concepts you can keep in mind as you make your SaaS product even more frictionless.

If you can get each of these right, you can run one hell of a SaaS business.

You got this!

If you have any questions or want to chat about product adoption, don’t hesitate to ask Driftly’s co-founders on Twitter!


Implement product tours in just 5 minutes

Driftly Homepage With Tour

Use no-code product tours to nudge users towards that WOW moment. Guide your customers towards the most impactful areas of your software as they breeze through onboarding, adopt core features and become life-long power users.