Customer adoption. While it's not as cute as kitty adoption, it still plays a large role in your customer success team.
When you introduce new products, services, tools, or features, you hope that your customers will want to upgrade, purchase, or adopt the new product into their workflow.
That's what customer adoption is all about. It's about helping customers adopt new products and services that you offer through your customer success organization. This is also called product adoption sometimes.
In this post, we'll dive into why customer adoption is important, the customer adoption cycle, and how to track and increase your customer adoption rate.
What is customer adoption?
Customer adoption refers to the process when a business introduces a new product to the marketplace and acquires new and repeating customers. It's the end-to-end process of product awareness to product integration into a customer's life. Also, customer adoption is the rate at which current customers adopt/purchase new products, features, or services. It also references how quickly customers can adapt to using a product/service as intended.
Essentially, customer adoption is the process it takes for a customer to learn about a new product/service, express interest, evaluate, test, and then finally adopt a product/service by purchasing it and using it as intended. This is akin to the buyer's journey in marketing, and not too dissimilar from the product life cycle, but for the customer success team, it's customer adoption.
For example, the type of service someone needs in the awareness stage is different from what they'll need at the adoption stage. Separating the stages of the customer adoption process also helps your customer service team give specialty service to early adopters.
Understanding consumer adoption goes hand in hand with the diffusion of innovation theory -- the theory explains that an idea or product gradually gains traction and diffuses throughout a population or social system. Slowly, this idea is adopted and people start buying or using it more in their lives.
So, what is the customer adoption process like?
Customer Adoption Process
There are five stages to the customer adoption process:
Let's dive in below.
1. Product Awareness
The first stage of customer adoption is awareness. This is when a current customer becomes aware of a new product or feature. It could be through their CSM or a product notification or a marketing email.
2. Product Interest
In the second stage, a customer is interested in your product or service. If they're a part of your current customer base they might reach out to their CSM and express interest.
3. Product Evaluation
The next stage is when a customer evaluates your new product or service. They consider whether it's something they want/need and are willing to spend money on.
4. Product Testing
Then, a customer will test your product or service in some way. Either by signing up for a free trial, being a part of beta testing, watching a demo/tutorial, and/or reading reviews (if available).
5. Product Adoption
Finally, a customer decides to make a purchase. This is when the customer adopts the new product or service and uses it as intended. To fully use the product to its full potential they might need high touch customer support from their CSM. There might even be an onboarding process involved. Once this is done and the product is integrated into the customers day to day, then you've reached customer adoption.
While this might sound conceptual right now, it's important to track if current customers adopt new products/services.
Your customer success team is responsible for making sure customer adoption is a smooth process. If all goes well, the customer adoption metrics you gather will help you identify signs of renewal and churn before they happen. You can notice trends and see where in the adoption process customers get tripped up -- perhaps it's not understanding a product because it's too complex.
You might notice that customers who use certain features on a weekly basis usually renew or those that stop using certain features will churn soon.
This information will help your CSM provide better customer service and make sure the customer adoption process is going well. Measuring adoption will help you ensure your customers get the ROI they want from you.
So, how can you measure it? Customer adoption rate. Let's dive in below.
What is customer adoption rate?
Customer adoption rate is the number of adopted customers divided by the total number of customers.
For example, if you have a new feature launching and 250 of your current 1,000 customers adopt the new feature, you'll have a 25% adoption rate.
To calculate and measure customer adoption rate, you'll need to define what an adopted user is -- this might change depending on the products/services.
Besides customer adoption rate, you can also measure how long it takes users to begin using a new feature (time to first action), and the time it takes for a customer to get value from a product (time to value).
Now with all of the explanation out of the way, you might be wondering how to increase your customer adoption rate. Let's review some ideas now.
How Do You Increase Customer Adoption
Conduct beta testing.
Learn from feedback.
Reach out to loyal customers.
Improve the customer experience.
Be strategic about your onboarding process.
1. Conduct beta testing.
If you're thinking about rolling out a new product or feature, it's important to conduct beta testing. This is where you'll learn how the feature works in action. You can gather feedback and work out the kinks before fully launching a new product or tool. When you conduct beta testing, you'll only have the tool/feature available to certain customers.
2. Learn from feedback.
The best strategy to increase your customer adoption rate is to listen to your customers. After conducting beta testing, have the customers who used the new tools/features fill out a survey. Learn what works, what they liked, and what they didn't like. Then, you can perfect the tool for the official launch.
3. Reach out to loyal customers.
Another way to increase your customer adoption rate is to reach out to loyal customers. You might consider giving them a special offer or special customer support if they're interested in your new product/tool. First-class service is the best way to convince users to continue adopting new products or features.
4. Improve the customer experience.
Ultimately, the only way to increase customer adoption is to provide an excellent customer experience by providing a quality product. Your product or service needs to add value to your customers while being intuitive and simple to use. With quality products and a seamless customer experience, customers will want to adopt new features and tools when they're released.
5. Be strategic about your onboarding process.
For most SaaS companies, onboarding customers is either a high touch or a low touch service. To increase your customer adoption rate, you'll want high value customers to have access to high touch customer service. This means that your customer success team might create customized onboarding documents and give personalized tours of a new feature until a new product is fully implemented.
Customer adoption is important because customer retention can increase company revenue by 25-95% -- and customer adoption is just the other side of the customer retention coin. To increase customer adoption, focus on providing excellent customer service through your customer success team.
Originally published Nov 26, 2021 8:00:00 AM, updated November 26 2021