How Product Adoption Metrics Give Your SaaS Business Transformative Powers

In the SaaS subscription business market, not all SaaS products are simple enough to understand and get hands on. Most of the time, companies offering Software as a Service (SaaS) attach training sessions and knowledge base with their product at the time they deliver business solutions so that the user can understand the usage of the product. All these efforts are meant to make product adoption easier for the user side.

All of us are aware of the usage manual or instruction manual that is being provided with various appliances. People need these manuals to use appliances correctly. Just like this, with software and applications, instructions, training, and customer care is provided to help users adopt SaaS product.

Product adoption plays an important role in the improvement of customer onboarding and customer retention rates. CMRs, ERPs, and many other software are not easy to use. They are complete suites of applications. They can be complicated sometimes. It is crucial to offer training sessions for the team of users that is to adopt the SaaS product.

In this blog, we are going to discuss all the details of product adoption that SaaS businesses must know to improve the performance of their SaaS product adoption metrics that in the end improve their business health.

What is Product Adoption?

The process through which customers or users begin utilising a product or service, get to know its features, and incorporate it into their daily routines or workflows is referred to as product adoption. It entails moving from the product’s initial awareness to full use with the intention of maximising its worth.

Also Read: Why Value-Based Pricing Approach Is Important For Your SaaS Business

SaaS Product Adoption Metrics

Now that you know what product adoption is, it is time to discuss how businesses know if they are doing well regarding their SaaS product adoption. There are certain metrics that you can monitor with time to see if customers are adopting your product correctly or not. Whether you strategize for product adoption or want to monitor the performance, always keep this in mind:

“If you have a weapon in your hand without knowing how to wield it, you’re poised to do more harm to yourself than enemies.”

Users must know how to use the SaaS product that you provide them with so that they may use it to compete and win over their competitors.

Monitor these KPIs or metrics to see if you are helping customers enough to adopt product:

1. Feature Adoption Rate

A crucial indicator for determining how quickly people accept and make use of new or updated product features is the feature adoption rate. It provides insightful data on user behaviour and the efficiency of feature releases.

Taking feature adoption as a metric will help you evaluate numerically if it is easy for users to adopt features and use them effectively.

2. Customer Lifetime Value (CLV)

The value (monetary value and referrals) offered by a SaaS customer is the CLV. It is an important metric to evaluate product adoption. CLV is calculated with the help of a few other very important factors. For instance, individual customer retention, subscription payments that he made during his lifetime, and referrals all contribute to the calculation of CLV. All these factors also link with product adoption rate. If features are well adopted, the CLV of a customer will improve. That’s how CLV’s performance indicates if adoption is going in the right direction or not.

3. Activation Rate

In the subscription businesses, various SaaS customers, purchase a SaaS product but do not activate it. And in many cases, a payment is not processed unless the SaaS product is activated. Also, in some cases, after a week or two, SaaS customers claim for refunds and deactivation. So, you see, product activation rate is a very important metric to monitor product adoption.

4. Product Stickiness

Product stickiness shows how well your users are engaged and using your product over a period of time. One more thing, you can also make formulas to calculate all these metrics. However, these formulas will depend on your business and the factors that are involved.

If product stickiness improves, then your product adoption rate also improves, and if product stickiness is less, product adoption will also be affected. There is a direct relation between them.

5. User Retention Rate & Churn Rate

The user retention rate also has a direct relation with the product adoption rate. If users are retained, then the product adoption rate remains satisfactory otherwise, you will probably need to restrategize for SaaS product adoption.

The churn rate is the opposite of retention. Churn shows the users who cancel their subscription to your SaaS product. However, the relation between product adoption and churn is inverse. If churn increases, then the SaaS product adoption rate falls.

6. Net Promoter Score

Net Promoter Score (NPS) is a measure of how likely customers are to recommend a business to others based on their experience. An improvement in NPS can help you improve product adoption. Here, customers come after getting referrals from some of your previous customers, they put in effort to understand and utilize the SaaS product.

Also Read: How PLG Companies Can Optimize Their Sales with SubscriptionFlow

Transformation with Improvement in SaaS Adoption

If you improve the performance of your SaaS adoption metrics, then a wave of transformation will automatically come to your subscription business. Improvement in SaaS (Software as a Service) adoption is a catalyst in the transformative shift of your businesses.

It means that more customers are actively interacting with and benefiting from your offers, which boosts sales, keeps customers happy, and makes your business more competitive. Businesses can achieve revolutionary growth and better serve their customers by maximising product adoption.

If you want to experience this transformation in your SaaS subscription business, then start working on your SaaS product adoption strategy now. To improve the performance of these KPIs that we mentioned above, nothing can help you more than SubscriptionFlow. How? To know this, contact our experts now!