Product adoption refers to the way through which your target audiences will learn about your product and start using it by understanding the product’s value. An example of product adoption could be when customers purchase a certain product or download an app, they are engaging in product adoption.
Product adoption or more commonly known as user adoption is the plan that enables the users to utilize the products that they have to complete the goals that the product was created to help with. Adoption can be defined as the percentage of users that tend to perform a particular behavior regarding a product. Companies even share their products with existing customers to analyze user behavior and get customer feedback to improve their products and convert existing customers into long-term users.
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What is Product Adoption?
Product adoption is the process where the users become aware of a particular product, understand the value that it has, and start adopting it. Product adoption is the process of familiarizing customers with a product or service and integrating it into their daily lives. It involves understanding user preferences, creating awareness about the product’s benefits, and building an emotional connection so that customers will become loyal users.
By definition, the process of product adoption is a way through which people will hear about any new product and become regular users. It targets potential customers and converts them into loyal customers. It is a really important aspect of the customer journey and has a very important role to play in the success of a business.
It is one of the essential goals for the business. In case the product is adopted, you will be able to create a proper customer base and you will also be able to take a position in the market. Product adoption can be used for marking the transition from any product being foreign and unknown to becoming welcomed and regularly used by all users. The process depends on the user and there are different adopter types within the customer base. Also, they have different values.
Key Takeaways!
- The product adoption process refers to the process through which new customers learn how to use a product or service and become familiar with it.
- The opposite of churn is product adoption. Churn occurs when users decide to not use your product.
- Once customers choose to adopt your product, it means they have made the decision to use it.
Difference between Adoption and Acquisition
User acquisition aims to increase the number of people who try out your product, while product adoption is about assisting users in becoming acquainted and devoted to it. User acquisition refers to the stage when a consumer chooses to try out your product for the first time. But on the other hand, when a user experiences enough success with your product, they decide to invest in using it and stop searching for other solutions. This is known as product adoption, and the user becomes a regular user.
Why is Product Adoption Important?
The importance of product adoption is hidden in its ability to create and optimize a loyal customer base. Whether you have a retail business or an e-commerce one, it is important to know about product adoption since it has a direct connection with customer success. Not to mention that it also improves rates of customer retention while leading to better revenue.
Also, with product adoption, you can gain loyal customers that are a fan of your product. This means you have a higher probability of upselling your products. This ultimately leads to an expansion in the market as well.
In most cases, businesses tend to link the process of product adoption with important metrics such as daily users, signups, and much more. But these metrics don’t provide the whole picture. You need to measure how the customers can properly incorporate the product completely into their lifestyle.
So, product adoption is one step ahead of examining your product fans and providing proper marketing tactics. Product adoption can only be possible if the product value is more than the effort and cost of creating the change. Hence, it translates to the needs and requirements that customers tend to have.
What is Product Adoption Curve?
Understanding the product adoption curve can help you gain insights on how to better engage potential customers and ensure successful product adoption. By using the curve of product adoption, a company will be able to gain useful insights regarding the targeting of different sections of the customer base. By definition, the product adoption curve can be described as a visual representation of ways in which different people have the urge to try out new products with time.
The respective phases of the curve don’t indicate the people to whom you must sell your products. However, it talks about when and how to target different customer segments that are ideal for the company. Across the customer base that you have, some people will be early buyers of your products and there are some who are late buyers.
There are 5 different phases in the product adoption curve such as innovators, early adopters, early majority, late majority, and laggards. Every single one of the phases has got different advantages as well as challenges that need addressing to ensure that the market is completely saturated. Marketing tactics and messaging strategies for every single phase when ensuring proper results.
Types of Adopters in Product Adoption Curve
1) The innovators
The first group of users to adopt a product are called innovators. They make up 2.5% of the market and are enthusiastic about new technology. Even if there are issues, they are willing to try it out. Early feedback from innovators is valuable, but their long-term commitment to using the product is not guaranteed.
2) The early adopters
About 13.5% of the market consists of early adopters. They are individuals who have a greater desire for trying out new products and more financial resources to spend on solutions. These people are interested in innovation and expect the product to efficiently solve their problems, not just be something new. Attracting early adopters can help you build a positive reputation and fix any glitches in the product.
3) The early majority
The early majority group makes up 34% of the market and prefers products that have a good reputation and are already established. They tend to avoid risks and need to trust the first two groups before feeling secure enough to make a purchase. However, once they have made a decision, they are likely to become loyal customers because they seek long-term solutions.
4) The late majority
The late majority makes up 34% of the market and shares similarities with the previous group. However, they are more cautious and less tolerant of technical problems. They will only adopt your product once they feel completely confident in its reliability.
5) The laggards
The laggards make up the last 16% of the market and tend to be less open to trying out new products. They prefer to stick to the technology they already know and will only make a change if it’s necessary.
What are the Product Adoption Stages?
Regardless of the market or the type of users, there are 5 distinct stages of the product adoption process that the user will go through. Let us have a look at these stages from the details mentioned below.
1) Awareness (Stage of Introduction)
This is the first stage in the process of product adoption. In this stage, the customers will enter the website to find information about the product.
It will be helpful if you get to teach the customers about the product. Now the prospects might not be aware that the product exists for solving the problem. Also, the customer might have an idea about the problem but don’t have an idea about the solution. You providing some information about the product can be helpful for sure.
It is important to make sure that your product is completely recognizable and useful in the first place. Take the attention of the customers to different features of the product so that they can have an idea.
2) Interest (Stage of Gathering Information)
In this particular stage, the customers will be attracted to the product that you have and hence will try to know more about it.
You have to follow your customer’s steps and get proper support in the best way. Getting some segmented emails about the product sent to your customers can be of great help.
3) Evaluation (Stage of Consideration)
Now, this is the stage where the customers will wonder whether the product is worth trying or it is not.
You need to help your prospective customers properly evaluate the product. They have to view different aspects of your product and understand how different it is from the competition.
4) Trial (Stage of Sampling)
In this stage of the process, the users will try your product to check how the product is functioning to solve the problems of the prospects.
This is the stage that is extremely important since it will help the customers decide whether they want to use the product regularly or not. You can provide free trials to the prospects or offer a money-back option to build confidence amongst the users.
5) Adoption or Rejection (Stage of Buying/Not Buying)
In this stage, the prospects will conclude whether the product has any value and will be further adopted or not. This is the final stage of the process and here the customers will proceed with positive or negative action.
Factors that Influence Product Adoption
5 different factors have a role to play in the process of product adoption. These factors have a major influence on the process. All of these points are mentioned below.
1) Relative Advantage
Does the product offer any more value to the prospects than your competitor? In case you have a competitor, the prospects will most likely switch if you are offering something better.
2) Compatibility
You need to ensure that your product is falling in line with the different characteristics that your audience exhibits. Now the product should be compatible and reliable.
3) Complexity
Make sure that your product is simple and easy to use. There is no need for users to struggle while using the product, right?
4) Trialability
Are the users able to try the product that you have? If so, then what is the limit of the trial? The users need to have a free period of trial to build reliability.
5) Observability
Is your product properly visible to the audience? You need to ensure that your product is completely present where your audience wants it.
Measuring Product Adoption
How well is product adoption working in the company that you have? Does the product adoption process in your company work according to your needs? Is it good or bad? Do you not have an idea about it?
Well, you are certainly not alone because most people don’t have an idea about it. This is because it is not easy to measure product adoption properly. You won’t even be able to directly calculate it in the first place.
You have to keep an eye on different metrics to have a proper understanding of the process. This whole thing can be complicated. But once you managed to successfully get the results, it will be worth it.
Metrics to Measure Product Adoption
Here are some of the product adoption metrics that can help you measure it effectively –
1) Rate of Adoption
Now, this is a metric that can help in the calculation of any adoption of a particularly new feature in the product.
You will be calculating how many people from your existing users are utilizing a particular product. You may calculate it using- (Number of New Users of a Feature / Total Number of Users) * 100
2) Product Adoption Rate
This is the metric that will help in determining the popularity that the product has amongst the people who have signed up recently.
Proper calculation of the rate of product adoption can help in checking the new signups for product adoption. You may find it through- (New Engaged Users / Total Signups) * 100
3) Percentage Of Users Performing An Action
As it has been defined by the name, it is the percentage of the people who have managed to use a particular key action, and that too for the first time in a product
4) Time-to-first Key Action
With this metric, you can determine the speed at which the users are adopting the product.
You can also check other perspectives such as the time has gone by without the users adopting any product.
5) Frequency of Average Users
One of the primary metrics that assist in understanding the product adoption process best is average usage frequency.
You will be able to calculate the number of times the users have been utilizing the product or the feature that you have.
6) Daily or Monthly Users That Are Active
Now, this metric is a general one, and with this, you can have an understanding of the active users that you have for your product for a given period.
So, you will easily be able to understand the users of your product.
7) Customer Retention Rates
Another general metric on the list, the Retention metric will help you figure out product adoption in the best way and that too in an overall sense.
This metric is really important for businesses that want to be successful with their products.
8) Percentage of Monthly and Daily Users That Are Active
This metric utilizes the information about the Daily and Monthly active users in a better way. You will be able to figure out the percentage of the users that have been utilizing your product of yours for a certain period.
This metric can also be useful when it comes to making improvements in user engagement and adoption levels. To find it, use the formula- (Daily/Monthly Active Users / Total Number of Users) * 100
9) Average Time Spent
As it has been mentioned in the name itself, this particular metric will focus majorly on the average time that the user is spending interacting with the feature or the product that you have. This metric is also commonly known as the breadth of use. With this metric, you can figure out how much the users are properly using the product that you have for them.
10) Cost-per-Acquisition
This metric mostly focuses on the amount of money that you are spending to get each user to try and then purchase the product, app, or service that you have. This metric helps in figuring out the effect of product adoption on the marketing and sales efforts of the company. You will be able to manage the company budget better with this metric.
11) NPS
This is an indirect metric that helps in tracking product adoption. However, it is a really important thing that you need to track. With NPS, you can see the percentage of prospects who have successfully utilized your product and will highly recommend it to other users. It can help in measuring the satisfaction of the users regarding your product.
12) Customer Lifetime Value
The Customer Lifetime Value is another amazing metric that can help in the determination of the value that any particular customer will bring to the business. This can also be utilized as a basis of comparison for direct metrics of adoption. You may find it through the formula- Customer Value * Average Customer Lifespan
13) Customer engagement score (CES)
Measuring customer engagement is essential for delivering value from your product. To assess the risk of churn and potential expansion opportunities, you can calculate the Customer Engagement Score (CES). To do this, you need to consider various aspects such as user actions, usage frequency and completed tasks for each customer and combine them. Remember that customers only benefit from your product when they use it.
14) Product-qualified leads (PQLs)
Product-qualified leads are potential customers who are likely to purchase your product.
15) New feature adoption rate
Measuring the feature adoption rate is crucial in assessing the value customers derive from interacting with your SaaS product, as developers embed much of its value within its features. This helps determine how much value customers may be missing out on or not fully utilizing.
Example of New Product Adoption Process
Here is an example from real life to make sure you understand the process of product adoption in the best way. Say that you have been walking home from work.
- You see a billboard that shows that a new Pizza place by the name of DeliPizza has opened up nearby. (Awareness)
- After going home, you go on the internet to find some more information about DeliPizza from the menu that they have online. (Interest)
- You are considering whether you should try the pizza or not. (Evaluation)
- You go ahead and tried a small version of the pizza. (Trial)
- Since the pizza arrived quickly and it tasted amazing, you decided to choose DeliPizza as your new go-to pizza place. (Adoption)
Tips to Increase Product Adoption
Every company needs to ensure that the users are successfully adopting the product that they have.
So, there are some things that these companies need to do to make sure the product adoption process is improved. It is all about making the product adoption process simple. Here are some important steps to follow –
- Start the adoption process from the very first day by creating a product that is pretty simple to use and easily comprehensible. Target the early adopters and best customers that you have with the help of channels and different marketing campaigns which can help in the process of conversion.
- You should focus more on the engagement as well as re-engagement of the customers which is a priority. You can also utilize everything that you have managed to learn about the improvement of product adoption in the best way so that it can help in the process. Brands can use in-app messages to update users about new features.
- When it comes to onboarding, it is a pretty important process for product adoption. Here is how you will be able to do it better. Contextual onboarding is a must and you need to make your users understand the process of onboarding in a more personalized manner.
- Brands should focus more on onboarding when it comes to driving the users to a point of activation. They need to personalize and segment the onboarding based on the personas of your customers. User feedback can be extremely useful in understanding the improvement of the onboarding flow.
- There is a very important role that customer support has to play when it comes to increasing the adoption of a product. When you invest in support, you will surely be able to get the users to properly adopt a process without actually going through any challenges. Here are some steps to follow.
- You need to provide proper guidance to your customers in the beginning so that they can be prepared for the future and become active users of the product. You also have to balance all the important resources of self-service to provide proper support. You should also prioritize the support for at-risk behaviors to reduce the churning dangers.
Implications of the Adoption Process for Marketers
To begin with, we should use promotions to increase overall awareness about the new product and its advantages. We can also arrange for the distribution of samples or simulated trials to assist potential buyers in making their initial purchasing decisions.
During the evaluation stage, marketers need to highlight their commitment to quality control and offer strong guarantees to support the buyer’s decision-making process. It is crucial to connect production and physical distribution to how customers adopt products and make repeat purchases.
What questions you can use to improve adoption rates for your product?
Some of the questions you can ask yourself to improve adoption rates for your product are –
- How easy is it for new users to grasp and use your product?
- Is the product attractive to innovators and early adopters?
- What are the most indicative customer behaviors for predicting adoption?
- Which channels are most commonly used to acquire customers?
- How does the speed of product adoption affect your ability to retain them?
How to Make Potential Consumers Adopt the New Product
- Relative Advantage – How much better is the innovation compared to the products that already exist?
- Compatibility – How well the innovation aligns with the values and experiences of possible consumers.
- Complexity – It refers to how challenging it might be to identify or utilize the innovation.
- Divisibility – It is referring to the possibility of testing the innovation on a smaller scale.
- Communicability – The degree to which others can observe or understand the results of using the innovation.
Conclusion!
Overall, it may be said that product adoption helps brands to properly maintain a strong and successful position in the competitive business world by helping them delve into the world of potential customers and converting them into early adopters and then into loyal customers.
Feedback from early adopters also helps brands in improving their products and creating more engaging products. This strategy helps brands in letting their daily active users adopt new products or understand new features of an existing product and be aware of the value proposition of a product.
How important do you consider the use of a product adoption strategy before launching a new product?
FAQs
1) What is the product adoption lifecycle?
The product adoption curve illustrates how different customer segments adopt a product at various stages of its lifecycle. It identifies the innovators, early adopters, early majority, late majority, and laggards and provides insight into their size and characteristics at each stage.
2) How do you drive product adoption?
To increase the use of your product, develop a strategy for product adoption using some proven tactics. These tactics include creating high-quality products, enhancing the onboarding process, establishing customer support, interacting with users within and outside the app, and using customer feedback to improve the product’s functionality.
3) Product adoption vs product adoption lifecycle: What is the difference?
Product adoption is when users become aware of a product and its benefits and start utilizing it. On the other hand, the product adoption lifecycle displays the different customer groups’ adoption rates of a product in various stages of the product’s life.
4) What are the key areas of your product you need to focus on for increasing adoption?
You need to pay heed to the following are-
- Customer onboarding
- Product design
- messaging and tutorials
- Customer success workflows
- Behavioral data, etc
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