What is Product Adoption?
Product adoption, by definition, is a process by which customers hear about a new product or a service and become recurring users of it. Tracked and utilized by thousands of businesses worldwide, it is a crucial aspect of customer health and plays a primary role in customer success.
Product adoption is the key to a successful and growing SaaS product. Without it, your product will fail. It revolves around the implementation of new products and their adoption by users and is an area of concern for product creators, as well as businesses that adopt new products for internal use.
Product adoption focuses on the areas such as:
Though product adoption is only one aspect of digital adoption, it is a very important one.
Simply put, product adoption is the process of customers discovering, purchasing, and implementing a new application into their work or lives. Many companies invest a lot of time and money into the first part of the process - the discovery.
From expensive marketing tactics to free trials, SaaS companies place a significant emphasis on the acquisition part of the customer lifecycle, but what happens after a new user converts to a paying customer is even more critical and often overlooked. If paying customers isn't fully utilizing your software, they will cancel or not renew their subscription.
If you don't have a solid adoption strategy in place, you'll waste all the time and money you spent on marketing and converting a customer. According to Harvard Business Review, it costs 5 to 25 times more to acquire a new customer than keep an existing one.
“Product adoption is essential for any SaaS business that is serious about gaining returning customers that love what they have to offer.”
When companies focus on customer adoption, they are not merely increasing conversions; they're developing a base of customers who know and share the value of their product.
Whenever users try a new product for the first time, they're actually undertaking a transformation—one that will move them from beginner to enthusiast. However, they'll have to learn a lot about your product first to get there.
You can define product adoption as the endpoint in this user journey. It's the stage when users have finally learned enough about your product to put it to good use—and even prefer it for tackling their specific problems.
Looking at the Product-Led Growth Flywheel, you can see that the adoption stage of the user journey is where beginners become regular users. This is important because regulars are your core user base. They understand and fully appreciate your product’s value. They have integrated it into their tech stack and have come to rely on it in their daily workflows.
Having a product adoption framework matters because when users fully adopt your product, they stick around. Adoption translates into higher retention and lower churn, both of which make your revenue more consistent and predictable over time.