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Likitha A May 17, 2022

The SaaS industry is one of the fastest-growing industries, the annual growth rate of the SaaS industry is projected to surpass 17% in 2022. But despite its growth, most SaaS companies struggle to reach product adoption rates above 20%. 

With the ever-changing landscape of technology, it can be hard to keep up with the latest trends and ensure that your product is being used to its full potential.  

What is Product adoption?

Product Adoption is when a user discovers a new product and starts using it to solve a problem or serve a purpose and become the brand advocate of your product or service. It is the journey of acquisition to investing in your product to get expected solutions. In simple terms, a journey from visitors to buyers and buyers to loyal customers.

New users need to feel that your product serves their needs, and only then will they stick to it if you successfully convey the value of your product to them.

In SaaS and consumer space, the product’s stickiness is also defined as retention.

The product adoption rate can be measured daily, weekly, monthly, or annually. You can calculate your product adoption rate by dividing the number of new active users by the Number of signups and multiplying it by 100.

Product Adoption Rate = (Number of New Active Users / Number of Signups) * 100

Why should we track Product Adoption Rate?

Tracking product adoption rate is crucial for all SaaS companies because it shows how well the product is performing and what changes are necessary to improve the product for better adoption.

~ A low adoption rate indicates that the product is not meeting the user’s needs or has issues that must be identified and resolved. 

~ A high adoption rate indicates most users are satisfied with the product offerings and are likely to continue using the product, increasing customer satisfaction, and loyalty.

Key Product Adoption Metrics to track 

Time To Value (TTV)

The time it takes for customers to complete a task after the first use of your product. This metric helps you understand how long it takes for the users to complete their first action after signing up or downloading the app. It is a valuable indicator to know how long they will stick with your product before abandoning it.

Time to Value (TTV) is the time it takes for a new customer to realize value from your product.

Customer Lifetime Value (CLV)

The total amount of money an individual customer will bring in over the course of their lifetime with your company. CLV calculations help determine how much time, effort, and money should be invested into acquiring new customers versus retaining existing ones.

CLV = Average revenue per account / Customer churn rate

Product Activation Rate (PAR)

The product activation rate (PAR) is a metric that measures the percentage of people who have successfully activated your product. This metric can be tracked by looking at the number of users who have activated your product within a certain period.

Product activation rate (PAR) = Number of users who activated their account / Number of users who downloaded the app

Feature Adoption Rate (FAR)

FAR is the percentage of users who have adopted a feature within a certain period. It’s helpful to use FAR as an indicator because it shows which features are being used and which ones aren’t. You can then make changes such as improving ill-performing features or removing unused ones altogether based on this data,

Feature Adoption Rate= (Number of feature MAU / Number of user logins in a given period) *100

Customer Engagement Score (CES)

CES measures how engaged customers are with your product or service based on criteria that you define before measuring engagement. It also indicates how likely they are to recommend your product or service to others so that you can use CES as an indicator of customer satisfaction and loyalty.

CES score = (Total sum of responses) ÷ (Number of responses) 

The 4 Actionable Tactics to Improve Product Adoption

#1 Personalized Onboarding Experience

The onboarding process is the first and most important step. Keep the onboarding process simple but personalized. Users should not feel frustrated and leave the application due to the complexity and irrelevance of the steps. Make it fun, interactive, and engaging by giving them short product tours, tutorials, screen tips, and instructive guides that will lead to meaningful usage.

  • Make a Lasting First Impression with Splash Screen

The splash screen is the first glance the users get of your app. Deliver an engaging experience while getting users to signup or register, making it clear that it will be smooth sailing right away.

  • Design Product Walkthroughs with Tutorials

Configure dynamic In-app guidance in the form of interactive carousels, video, audio, GIF, and image-based product tours with our innovative tutorial tool.

Tutorials provide a quick overview of your application and how it can benefit the users. It is a suitable method of boosting usability from the first minutes of interaction with users.

  • Simple Navigation through Screen Tips

Screen tips or tool tips enable users to instantly understand your app’s value proposition. It is a powerful solution for driving features and user adoption.

#2 Effortless User Engagement 

After building an application or website, its success lies in how well you engage the users. The higher the engagement, the happier your customers are. The rate of success and satisfaction can only be determined by engagement. 

  • Gamification

One way to improve your product adoption rate is to incorporate gamification into your user engagement strategy. 

Gamification uses game-like elements in non-game contexts to engage and motivate people to achieve their goals.  

Here are four ways you can use gamification to improve your product adoption rate:

1. Use points, badges, and leaderboards to incentivize users.

2. Make the learning process fun and interactive.

3. Create a sense of community and belonging.

4. Encourage social sharing.

  • Real-time Alerts

Build interactive and meaningful experiences for the users through personalized and contextual alerts. By sending timely and relevant messages, alerts and notifications, you can keep them coming back for more. 

There are multiple channels through which a user can be engaged throughout the journey. Using channels such as push notifications, in-app messages, emails, and more, you can keep the user engaged throughout the journey.

-Send real-time push or web notifications regarding new feature updates, reminders, and informative messages.

-Initiate one-on-one conversations with in-app messages.

-Craft compelling emails and messages to share essential information or renew subscriptions.

#3 Drive Performance with Analytics and Segmentation

Understand the user by gaining deeper insights into behavioral, demographical, and transactional data. Know how your users interact with your product and where they are facing difficulties or dropping off. These analytics can be used to make changes to improve the user experience and increase adoption.

Segment your customers into different cohorts based on their behavior, such as what they are doing with the product, how long they’ve been using it, how often they use it, and what features they use the most. By segmenting your users into such cohorts, you can send relevant and personalized alerts and updates to them that will help them use your product more effectively.

  1. Identify the ideal customer segments for your product.
  1. Segment and analyze user behaviors using behavioral data
  1. Prioritize customer acquisition activities by customer segment

#4 Measure Customer Satisfaction

It is essential to know if your customers are happy with the product or service. The best way to know this is by asking if they are satisfied with your product or service and how you can make it better.

There are several ways to measure your customer satisfaction level and improve upon it over time. One way is to implement feedback surveys or NPS (Net Promoter Score) surveys in your app. This will allow you to collect anonymous data about your customers’ experience with your product and use the insights from this information to make changes for the better.

Key activities:

-Keep track of how your customers feel about your product or service and how they think it compares to the competition;

-Identify potential problems before they can become roadblocks

-Measure how your customers feel about their experience with your company.

Feedback surveys and opinion polls are a tried-and-true way of measuring customer satisfaction. This can be anything from gathering feedback on a new product to getting information on how customers use an existing product.

Also Read: The Ultimate Guide to Customer Feedback Survey

Wrapping up

The adoption rate is one of the key performance indicators for any business in the SaaS. From onboarding users to embedding analytics, and understanding how users are engaging with your platform, you can gain a deeper understanding of your customers, ultimately leading to improved performance throughout the product adoption cycle.

The key to having a successful product adoption rate is focusing on delivering a meaningful customer experience from the start of the customer journey till the end.

How can Upshot.ai help?

Upshot.ai is an omnichannel, user engagement, and gamification platform that helps digital product owners and marketers improve product adoption and conversions.

With Upshot.ai, banks, Insurance, and FinTech firms can enhance their digital experiences with pre-built gamification features. It can provide personalized insights, actionable recommendations, and contextual nudges designed to deepen its relationship with its users. Book a demo of the most comprehensive user engagement and gamification platform to achieve your digital product goals. Join our communities for more insights, guides, and best practices that keep you updated with proven strategies and tips to supercharge your campaigns.

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