During the pandemic, millions of people trapped at home with extra time on their hands decided to start new hobbies—with inconsistent success.
Whether it was learning to speak a new language, play the guitar, or become a photographer, many projects that began with enthusiasm ended up being abandoned in favor of watching Netflix. For recurring revenue companies, there is a lesson to be learned from this phenomenon: acquisition does not equal adoption.
For Product Experience and Customer Success professionals, achieving product adoption and/or user adoption can be challenging. For one thing, how do you decide when a user has “officially” adopted your product? In the broadest sense, product adoption happens when a customer’s users have achieved the value they were expecting when they first learned about the product and decided to purchase. It’s that moment of satisfaction that happens when a customer decides that the product was actually worth the money.
And while this moment could be defined by a hard ROI number, it could also be something more qualitative. The exact moment of adoption will vary depending on the type of product and the type of customer. The key is that your product has helped your customer achieve their goals, whatever those may be.
But how do you measure user adoption? You’ll need to start tackling the following questions:
- What goals does my product solve for my customers?
- Which customer behaviors signify that they have truly adopted my product?
- Do I have the right data to track how my customers are using my product?
- What metrics should I be using to track both my companies’ and my customers’ goals?
Why Should I Measure User Adoption?
User adoption is central to the recurring revenue business model because it is one of the first significant milestones in the customer journey. Because it is early, successful user adoption has outsized downstream effects on overall customer success metrics, including net revenue retention (NRR), churn, and NPS scores.
That means even small improvements to user adoption can have major positive results. If they are using your product, the more likely they will be to experience value, which will lead to more renewals and less churn.
And the more users engage with your product, the more open they will be to upsells and expansions. The longer they engage, the more revenue they generate.
But the relationship between user adoption, retention, and churn isn’t always clearcut. You have to understand what aspects of adoption are important, and which ones aren’t. That’s why you need good data.
What Metrics Should I Use When Measuring Adoption?
Determining which product adoption metrics to track starts with understanding the basics of how your product is used. You will probably have a good instinctual feel for which customer behaviors are important. Is it log-ins? Is it downloads? The answer, of course, will depend on your product.
Once you have the basics, you can start getting more sophisticated about tracking the behaviors. The following metrics are commonly used to track user adoption:
Adoption Rate Measures what percentage of new users have adopted the product. Typically, adoption rates will be calculated for a given cohort, for example, all users who started in May 2022. You can then measure adoption rates over time.
Time-to-First Key Action The average length of time (after onboarding, account creation, or some other starting point) it takes a user to perform an action that you have determined is key to adoption.
Onboarding Completion Could be considered a subset of the Adoption Rate or the Time-to-First Key Action; Onboarding Completion is an important milestone in the customer journey.
Active Daily or Monthly Users A general metric that gives you a snapshot of how many total users you have at a certain time point.
Average Time in Product Measures how much time the average user spends using the product or a specific product feature during a single session.
Usage Frequency Tracks how frequently the average user uses the product.
Time-to-value How long it takes for users to reach a point in the customer journey when customers typically experience value.
Once you have determined which user adoption metrics to track, you can start finding correlations with more general customer success metrics like NRR, NPS scores, and customer lifetime value (CLV). This will help confirm your choices for user adoption metrics, as well as get a sense for how user adoption milestones affect the business as a whole.
What Tools Can Be Used to Track User Activity?
Tracking usage data is typically done in one of two ways:
- Within your product. This method of tracking usage activity is usually built into your product from the beginning. The data is then fed to a database or data warehouse. But depending on how long ago your product was developed, the instrumentation may need to be updated.
- From your web application. This usually involves placing tracking codes on web pages to track page views and/or specific activities. But user clicking is not synonymous with user adoption.
The best way to track and process data is to find a platform that can work seamlessly with your product. You want as few manual workarounds and special coding needs as possible so that you can be flexible and work quickly as you are working with your adoption metrics.
Determining Success Metrics
Choosing which metrics work best for your product will require some hard work and some trial and error. A good way to start is to sit down as a Customer Success team and talk about the customer journey. Many of the answers will be obvious based on renewal conversations that have gone well, or perhaps not gone so well.
Beyond known churn pain points, you should discuss your customers’ goals and how specific behaviors within the product can indicate they are achieving what they want.
Ultimately, you’ll want to focus on your product’s stickiest features. These are the functionalities that really drive ROI. Think about the features of your product that, if used well, are hard to replace in the marketplace. Capabilities that can’t be replaced are what customers will pay for.
Use Gainsight to Improve User Adoption
Gainsight PX has a range of powerful tools to help you track and improve user adoption:
- Monthly comparisons of new customers and churn
- Wide range of usage metrics and key performance metrics
- Analysis for total customer base, specific segments, and individual customer
- Insights to drive in-products tools and product improvements
Learn more about user adoption with Gainsight!