Every time you release a new version of your software, your team gets pumped up. But there’s also anxiety about how your customers will react, whether they will find it helpful, and how it will impact their experience. You’ve invested a lot of effort and resources to make your app shine, and you expect that customers will zealously adopt it from day one.
However, the truth is that users often ignore new features, or are totally unaware they exist. To make things worse, companies lack insights into how customers use their product or whether they even use it at all. The fix? Measuring adoption.
Businesses that track product adoption achieve higher retention and lower churn. In the long run, this translates into more consistent revenue.
In today’s post, we’ll shed some light on this strategy. We’ll show you how product analytics helps you in this process, and you’ll get guidelines to ensure you’re heading in the right direction.
Table of contents
- Product and feature adoption – what they are and why they’re important
- Setting up and measuring adoption rate in product analytics
- Best practices to boost feature adoption
- Final thoughts
Product adoption is the stage of the customer journey when a beginner gets familiar with your web or mobile app and becomes a frequent user. That’s typically associated with actions like logging into accounts.
Following this logic, feature adoption means that someone actively interacts with a particular feature within a product.
People adopt an app or functionality when it gives them value – in other words, it helps them reach their goals. The greater your users’ engagement, the bigger the chance they will discover new functions in your product.
Higher adoption increases the likelihood of acquiring loyal, long-term users and customers. This is especially crucial for SaaS companies whose business model is subscription-based licensing with frequent renewals. Providing more benefits and making it easier for your customers to succeed with each renewal is the path to boosting Customer Lifetime Value.
Calculating CLV gives you a closer look at your business’ health in the long run. Including this metric into your analysis is useful for determining specific marketing goals and setting up sales strategies to lower acquisition costs and keep retention high.
To get more details on one of the key customer metrics, read our post:
Customer Lifetime Value: What Is It and Why Is It Important for Your Business
Acquiring new customers is much cheaper than retaining existing ones. As a study by Bain & Company tells us, lifting customer retention rates by just 5% increases profits by as much as 95%. You don’t have to devote all your resources to finding new customers and learning what they need. Some investment must also be made in keeping current customers happy. And return buyers spend about 67% more by their third year of their relationship with a business than in their first six months, according to Annexcloud. These factors all significantly impact your ROI.
On the other hand, unused features should be a red flag to your customer success team. People may find them hard to use, or simply don’t see any value in them. A functionality or piece of software that your customer pays for but brings no value might change their mind about the next renewal.
That’s why it’s critical to keep tabs on product and feature adoption and establish a continuous improvement framework into your product development process.
Ok, so you know that adoption rate is important. What next? You need to make sure that users get value from your product as quickly as possible.
Now we’ll guide you through measuring adoption rate.
To check whether your app or functionality is successful, you need to first define what you want to achieve with it and how it helps your customers. Finally, define how all that is linked to your organization’s business objective.
Every team needs to define adoption. For instance, if it’s a music application, adoption could be sharing a song. For a collaboration platform it could be uploading and downloading files, or posting comments to documents and articles.
This step involves measuring feature or product usage. But you need to have a wider perspective, not just whether it’s used or not. You should focus on three dimensions:
- Time to adopt – How much time it takes for customers to start using a new feature.
- Breadth of adoption – How many people in your client base or segment actively use the feature.
- Duration of adoption – How long people keep using the feature after discovering it.
You can’t estimate whether adoption is good or bad based on your intuition. Instead, focus on metrics that help you assess if you’re hot or not. But you can’t track everything.
The perspective you take depends on your company’s profile. Maybe you’ll track account creation? Completed first transaction? The number of people using a new function in your app?
However, you can apply some common metrics as your baseline, namely:
- Adoption rate – the percentage of new users of a feature
- Percentage of users who performed a key action for the first time
- Time to first key action – how much time a new user needs to try an existing feature or how much time an existing user needs to try a new feature
- Number of unique users who are using the feature
- Total number of times people have used the feature
The rest depends on you. Think about the main purpose of your app and what kind of user flow you expect people to follow. Break this down into smaller actions you want clients to take to get the most out of your product, and use this to identify more metrics.
Compare 5 leading product analytics platforms
Piwik PRO, Mixpanel, Amplitude, Heap, and Kissmetrics
Like with most analytics strategies, you need to have a solid foundation and structured process. This is where a tracking plan comes in handy. A simple spreadsheet should do the job of gathering in one place all available information about events and actions performed within your product.
The plan should cover:
- what you want to track
- explanations of why these events are needed
- unified naming conventions for events
- event triggers
- steps in the funnel
- software required
- implementation schedule
If you want to get more details on this strategy, check out our post:
Analytics Implementation in 12 Steps: An Exhaustive Guide (Tracking Plan Included!)
Many product teams closely investigate sticky features – these are the ones that pique users’ interest by providing consistent value and are so gripping that they use them regularly. They’re often the ones that generate the biggest ROI.
The parts of your app or software that users stick to the most are difficult to replace. At the same time, they’re usually complex and require effort by the user. So they’re tough to adopt. However, those who can manage the more intricate and valuable features won’t churn so easily. They are also more frequently ready to purchase your other offerings.
As you go through your analytics data, it’s vital to find patterns of product or feature usage. They highlight when your clients interact with your app most actively, during what part of the day, and how often.
Then, you can look at specific segments of users – for instance, dividing them up by subscription plans to get a more detailed picture. You can find out if your Netflix subscribers with the Premium plan tend to watch the same shows, whether they share a batch of favorite episodes, or when they add items to their watch list.
With all that knowledge you’ll be able to tailor your product in the next update and execute effective marketing campaigns.
One way to get deep knowledge about your product usage is comparing how people use its different versions. You can segment customers based on tiers like Standard, Premium, and Enterprise, and analyze adoption rates in each of them. This approach enables you to spot frictions and allocate your resources more efficiently to boost product usage.
Equipped with precise information on the adoption, you’ll be able to review your product and tactics. It will be easier to design a new development strategy, decide what to keep, and set directions for improvements and fixes.
In your effort to draw customers to new features, you’ve got to make sure they know about them in the first place. The announcement process should be at the top of your agenda when you develop or update your product.
Use all your channels: blog, in-app messages, newsletters, and social media. Keep in mind that not every feature is equally important to all users. Tailor notifications to custom user segments so they’re always relevant.
You can track even the fanciest metrics but you won’t see results if you measure adoption for all customers at once. Our customer success team advises you to prioritise treating clients individually. This means you need to calculate the adoption rate for a particular individual.
That significantly impacts the whole process and lets you determine whether and how engaged and advanced your users are.
Once you know what works and what doesn’t, you can take your strategy to another level by setting adoption objectives for key features, the ones that boost income. Your strategy can be built around customer satisfaction. By measuring whether you’re reaching a certain threshold or not, you’ll have a better idea of what your product’s chances to succeed are.
Even the biggest collection of analytics data and KPIs will never be enough to fully understand how and why people adopt a feature. That’s why you should reach out to your clients and learn first-hand from them about what’s missing or broken in your product. This feedback will have an invaluable impact on your next upgrade.
One of the key issues you should focus on while working towards improving adoption is educating clients on your product and its new features. Make sure to clarify the benefits they bring, explain how they will solve your customers’ problems, and communicate new use cases. There’s lots of ways to do that, like:
- 1-on-1 with clients
- automatic emails
- in-app messaging
- step-by-step walkthroughs
- case studies
- help center
- community forum
When it comes to adoption of new products and features, there is a serious obstacle that marketers and customer success teams must overcome. That obstacle is resistance. Learning new things, whether a workflow, a habit or an interface, requires effort and generates friction.
First, know what actions users must take to employ the new feature successfully. Then, by using analytics and examining onboarding funnels, conducting UX surveys and in-depth interviews to gather client feedback, you’ll know where and why people get stuck.
To ease the learning process, stick to universal design conventions that people are familiar with. Make sure you’ve got navigation menus, an intuitive interface, and a customer help center in place. Anything that can help in using a new product without going through a longish tutorial will do the job.
You can gather great insights from clients who have stopped doing business with you. Analyzing data throughout their relationship with your brand helps you discover what pushed them to churn. In the same way, information gathered from clients who renew their subscription tells you what makes them stay and what sparks them to make additional purchases.
There can be different factors hampering adoption. Often these are technical issues like login errors. But they could be UI problems, like inconsistency when your users have expectations about how they can access something or what it should look like, but they run into something completely different.
Your task is to verify and test your product before rollout. Also, experiment with different versions of functionalities, check what solutions work better in terms of UX and UI. As you find what fits, prioritize it and include it in your new release. The faster you discover what’s missing or what damages the customer experience, the bigger your chances for getting them to embrace your product enthusiastically.
Compare 5 leading product analytics platforms
Piwik PRO, Mixpanel, Amplitude, Heap, and Kissmetrics
To maintain a strong position in today’s competitive software market, organizations need to tap into all possible resources that let them create sharper, more engaging products. Measuring adoption fits into this strategy as it gives you insights into how fast customers begin using a feature. You’ll learn whether your product helps them reach their goals. And if it does, they will stick with your brand for longer.
Yeah, it’s a complex process. But we believe that following our guidelines will help it go smoother for you. If you have any questions about these issues or want to know more about our product, just…