What is product adoption?

Product adoption is the process of user (or customer) activation for a web or mobile application.

Why does product adoption matter?

With the shift to subscription-based software licensing, product engagement–and specifically product adoption–has become much more critical than it was in the on-prem era. Product managers have always focused on improving the customer experience, but promoting activation early is more important than ever in SaaS, where software products are purchased every month.

Product adoption metrics

Product adoption can be measured according to these metrics:

• Stickiness: Stickiness refers to the number of users who log in to the product a minimum number of times, expressed as a count over time.
• Feature Adoption: Feature adoption measures how many users interact with your product’s specific features at a given moment, or over time.
• Growth: Growth measures the net effect of your user acquisition and retention efforts. In other words, are you gaining new users faster than you are losing existing ones? Growth can be achieved by adding new accounts or increasing usage within existing accounts. It’s expressed as the sum of new and recovered accounts or visitors divided by dropped accounts or visitors.
• MAU: The average number of unique visitors to your product each month.

For example, Monthly Product Adoption Rate (%) = [new MAU / monthly signups] * 100.

How to increase product adoption

Boosting product adoption rates comes down to improving your product; the better experience you create, the more likely users are to continue using your product. In addition to putting together a thoughtful in-app onboarding strategy, there are some other key ways to improve product adoption:

• Leverage product usage data: You can’t improve what you don’t measure. In order to assess product adoption, you should lean on product usage data to understand how users are engaging, where they are getting stuck, and any opportunities to improve their experience with your application. There are plenty of product adoption metrics to choose from, but we recommend tracking feature adoption, stickiness, and growth (which also make up your product engagement score).
• Communicate with users in-app: The best way to raise awareness of key features and encourage better use of your product is through in-app messaging. By communicating with users in-app, you’ll be able to reach them when this information will be most relevant, whether the purpose is user education, feature announcements, onboarding, or otherwise.
• Bring support inside the product: Housing support materials in your product encourages users to self-serve when they get stuck or have a question, helping to minimize the likelihood that they’ll give up and leave the product entirely. While it’s not usually the first thing that comes to mind, making support more accessible is an important tactic for driving product adoption.
• Collect user feedback: In addition to quantitative usage data, collect qualitative feedback from your users to better understand their experience with your product and anything they feel is missing. Use in-app surveys to ask users what they think of a specific feature, or to reach certain segments of your user base specifically.

What is feature adoption?

Put simply, feature adoption measures the usage for a software product’s specific features. The more features a user adopts, the more value they receive, and the less likely they are to abandon the product, making feature adoption a key metric for retention and expansion.

Like product adoption, feature adoption is a user activation metric. Feature adoption, however, is measured by interaction with a specific feature, rather than login. Feature adoption is typically expressed the same way as product adoption—MAU, adoption rate—with similar considerations for stickiness in defining activation.

Feature adoption rate is measured relative to logins: Monthly Feature Adoption Rate (%) = [feature MAU / monthly logins] * 100.

Why does feature adoption matter?

Each new feature presents an opportunity for added value. Unused features, however, can have a converse effect. This is why customer success managers are often laser-focused on feature adoption, since key metrics like retention and expansion are contingent on minimizing time to value. Paying for unused features lowers a customer’s perceived value and, ultimately, affects their willingness to renew at current price level, or even renew at all.

Feature adoption metrics

Feature adoption analytics focus the product- and customer success manager’s efforts on improving the performance of a product’s most critical features. When measuring feature launches, product managers and customer success managers should consider four key feature adoption analytics dimensions:

• Breadth of adoption: How widely has a feature been adopted across the user base or a targeted user segment? Has the feature been picked up by a majority of the targeted users or only a small percentage? Breadth of adoption shows the initial appeal of the new feature.
• Depth of adoption: How often do key user types touch the feature? Are they applying a desired process to demonstrate stickiness? Are they behaving in unexpected ways? Depth of adoption can signal relevance for an ongoing need or difficulty of use, so it’s important to keep a close eye on it and solicit feedback, if possible.
• Time to adopt: How long does it take for customers to begin using a new feature? When learning about a feature, do they immediately try it or do they wait days or weeks before using it? The more quickly a feature is adopted, the more likely it aligns to an existing pain.
• Duration of adoption: How long do users continue to use a feature after learning about it? Do they just try it out a few times or continue to use it over the course of months and years? Duration aligns to retention and helps show whether a feature is providing real value beyond its initial novelty, and can signal when a feature needs a refresh.

How do feature announcements impact feature adoption?

New features will never see significant adoption if the user base is unaware of them. So discoverability and the announcement process are important parts of driving feature adoption. Most companies employ several channels for communicating updates: blog, email, social, customer meetings, and in-app notifications.

There are a few considerations that can help shape a feature adoption strategy. The first is relevance. Users are much more likely to respond to announcements that matter to them. Few features are deeply relevant to all users, so announcements should be tailored to the most appropriate user segments. The second consideration is desired action. What does one want users to do upon reading the announcement? By delivering announcements as notifications and guidance in-app, companies can also measure whether new releases are delivering value and reduce the spike in support costs that often come with feature rollout.

Nelnet, an education technology platform, noticed an uptick in support calls from parents seeking tuition statements for tax purposes at the beginning of the school year. The team implemented an in-app guide to direct users to their annual payment summaries, and adoption of that specific feature rose 200%.

What constitutes successful adoption across these dimensions is going to vary from use case to use case, but it’s important to consider all four when assessing the outcome of any feature release.

How does onboarding impact product and feature adoption?

The post-signup period is the most crucial in a product lifecycle—after the first day, product adoption rates drop precipitously. Onboarding new users starting with the first time they open the web or mobile app is, therefore, absolutely critical. But product onboarding happens whether the experience is managed or not. Companies that focus on the onboarding experience can make their users proficient much more quickly and drive product adoption metrics like active use and retention.

The growth of SaaS applications has dramatically reduced customers’ switching costs. They are much more likely to churn if they don’t realize value quickly. Product adoption is contingent on an onboarding flow that:

• Quickly explains how the product works and its use cases
• Conveys the product’s benefits and differentiation
• Highlights and guides users to the most valuable features
• Prompts users to come back to the product over and over

Where can I learn more about product and feature adoption?

For those looking to dig a little deeper into product adoption and feature adoption, there are a number of books on the subject, including “Crossing the Chasm” by Geoffrey A. Moore, “The Innovator’s Dilemma” by Clayton M. Christensen, and “The Lean Startup” by Eric Ries. Pendo has also published information about user onboarding, as well as driving ROI from product investments.