Product Adoption | 11 MIN READ

SaaS: Quick Guide to the Product Adoption Curve!

In this quick guide, we will explain what you need to know about the Product Adoption Curve in SaaS marketing which will propel your growth to new heights.

Rakhin V
May 26, 2020

Product-Adoption-Curve

product adoption curve

Know your audience. This has been a nugget of wisdom passed down for decades now, for a good reason. If you do not have an intimate understanding of who your ideal customer is, you are destined to fail. However, knowing your audience won’t be enough. You have to convince them that your product has value to increase your product adoption. You need to understand the product adoption curve.

In this quick guide, we will explain what you need to know about product adoption and the production adoption curve. Understanding these aspects of SaaS marketing will propel your growth to new heights. 

Product Adoption Definition 

Before we get into the product adoption curve itself, you need to get familiar with the product adoption definition. 

It involves helping the users of your product or service to see the value they have, while habitually using it. There are four stages to product adoption. They are: 

  • Awareness 
  • Interest 
  • Evaluation 
  • Conversion 

You may be overly focused on metrics like how many users have signed up to use your product or how many daily users it has. When looked at individually, these do not give a clear understanding of whether people have success with using your product in their daily lives. You are not sure if your product has become an indispensable tool for them. 

Genuine product adoption occurs when there is so much value in your product that it is not worth it for users to drop it and move over to another one. This is part of why you need to have both incoming users in mind, as well as existing ones. This is why adding new features and making enhancements to your product should always be on your mind.

With over 200 million SaaS cloud workloads installed in 2018, you have a tremendous amount of competition, requiring you to keep innovating to retain and attract customers. SaaS is a $116 billion market, so you cannot afford to slack on this. 

When you understand the product adoption definition clearly, you know your audience clearly. This will ensure your product lifecycle is smooth. 

What Is the Product Adoption Curve? 

Now that you understand what product adoption means, we will shift over to the product adoption curve. Essentially, this is a model that shows you who is buying your products and when they are doing so. This model helps you take the data you have regarding product adoption and pan out to see the big picture. The product adoption curve looks at the lifecycle of a product and identifies what is going on at different points within it. 

The product adoption curve can be split up into five phases. These are: 

  • Innovators 
  • Early Adoptors 
  • Early Majority 
  • Late Majority 
  • Laggards 

The specific amount of time that each phase lasts varies, so we will look at the phases, or stages, themselves. 

1. Innovators 

The very first people to jump into using a product are the innovators. These people are a special group of users who are head over heels when it comes to SaaS. They are always looking for the freshest and latest in SaaS development. 

Since the product adoption curve is a bell curve, it means innovators comprise a small percentage of the total uses of a product over the lifecycle. This is to be expected and completely normal. When you are seeing just a few sales trickling in right after launching, you don’t have to worry. It’s typical for new products to sales hovering around 2.5% when a product is in the innovator stage. 

2. Early Adopters 

Soon enough, you will see your sales start to rise steadily. Your conversion rate will be increasing continuously. This is when you know you are in the early adopter phase. These are users who get ahead of the curve like innovators. They are looking to experiment with a product and are like explorers navigating the SaaS world. 

They may have actually already known about the product when it was in the innovator stage. However, they may have purposely waited to jump in on it. This is one of the ways they differ from innovators, who will jump head-first into a product. Early adopters want to see some data on the efficacy of a product before they get on board. The usual sales percentage for this phase is 13.5%. 

3. Early Majority 

When a product enters the early majority phase, it has gained traction and is seeing plenty of sales. People have now seen early adopters successfully use a product and jump in on the action. The product now is seen as having proven its value, so it’s a safe investment. This propels sales through the roof. Sales are around 34% in this phase. 

Towards the end of the early majority stage, the top of the bell curve is reached. This means the product is peaking. What comes next begins the decline of the product adoption curve. 

4. Late Majority 

At this stage, a product has been out and used for a considerable amount of time. Its use is widespread, yet there were still people out there who were not convinced that it was worth using. These people make up the late majority phase and beyond. The product adoption rate for this phase is the same as the one before it, which is around 34%. 

5. Laggards 

This final stage of the product adoption curve comes after all the buzz surrounding a product has turned practically silent. Laggards are late to the party, sometimes by several years. The people who get in this late are usually people who are highly skeptical of new products. Also, they may have just been entirely unaware that it existed until now. 

There is a sizable portion of sales occurring within this stage. With 16% of product adoption happening here, it can be surprising that there are more laggards than innovators. 

There is a sizable portion of sales occurring within this stage. With 16% of product adoption happening here, it can be surprising that there are more laggards than innovators.

Product Adoption Life Cycle

Product adoption cycle is the flow or series of events in which users adopt or consume your product. With a product adoption curve, you will have deeper understand on how you can plan product marketing activities. It begins with the launch of your product and ends when you stop. The types of adopters are mentioned above. These are classifications of people based on their adaptability to new products. With the product adoption life cycle, it is important to keep the product life cycle in mind. Mapping the product adoption curve with the product life cycle will give you the best results. Every stage of the product life cycle is divided based on different characteristics.  These are-

  • Introduction

In this stage, the product needs to penetrate the market. The choices the company needs to make include- deep penetration or skim through the market? Penetration means increased consumer adoption, fixing the pricing, and profits as well.

  • Growth

The second stage of product adoption is where the ball moves to customer satisfaction. Here, the marketing and efforts can be aligned to creating growth. Driving loyalty should be the focus for any company in this stage of product life cycle.

  • Maturity

This stage of product lifecycle depends on innovation, strategy, maintenance, and defence. Depending on the nature of company policies, customer demands, product seepage, and more, the brand will stay.

  • Decline

In this stage of product lifecycle, companies need to make decisions that will focus on growth and staying relevant. Either there needs to be an overhaul or a calculated exit.

Once the product lifecycle is understood, the next step is to understand the customer adoption process or the product adoption process.

Product Adoption Process

Customers in any sphere go through 5 stages while adopting a product. These are-

  1. Product Awareness
  2. Product interest
  3. Evaluation of the product
  4. Trial
  5. Product Adoption

It is a natural cycle that all customers go through while become loyal users.

Product Awareness

In this stage, the customer is aware of the product. There is less interest and he/she seeks more information about it. This leads to seeking for information. The bearers of this stage include advertising, marketing, publicity, word of mouth and more.

Product Interest

The next stage is when the customer needs information about the product. This is a crucial stage as customers make a big chunk of decision here. In this interest stage, they decide whether to get more information or not.

Evaluation of the product

In this stage, customers can try the product in a sample scale to see if they like it and enjoy using it. The motive is to establish a connection to evaluate the product. They can compare it with competitors to understand its potential.

Trial

In this stage, the customer tries the product to see if it works. Does it fit what they are looking for? Does it solve a problem? The usefulness of the product is determined in this stage. The key here is if the innovation works to satisfy the requirements of the customer.

Adoption

The customer chooses the product. The customer makes the product a regular one and a sale is made. This may not involve loyalty as yet. It can be a direct association to the product.

Product Adoption Marketing

Adoption marketing or adoption curve marketing is marketing involving the product adoption curve. The most important way to make a customer a product adopter is through retention. Here are some techniques that will help companies ace their product adoption.

  • Create product tips
  • Improve visual walk throughs
  • Create charts and demonstrate the value of features
  • Re-engage through email marketing
  • Offer easy onboarding
  • Segment customers based on demographics, type and more
  • Ace content marketing
  • Create compelling social media
  • Target customer journey stages with CTA’s, announcements and more
  • Use informative webinars to inform users and give them product information

What is Chasm?

Chasm in the product adoption curve lifecycle means a point where things are at a stand still. It is at a point where it seems for the company that there is no future early in its life.

Source: Marketing Student

In simple terms, chasm is the growth that has stopped your company from experiencing its true potential in terms of product adoption.

How to overcome the Chasm?

Crossing the chasm is necessary for any SaaS company to scale. It is one of the biggest challenges companies will face in the beginning. Here are some ways companies can overcome chasm.

  • Focus on the importance of the product
  • Appeal to the need for it in the future
  • Improve or revamp the messaging
  • Create competitor comparisons
  • Offer compelling case studies and showcase them
  • Promote on social media
  • Add relevant testimonials
  • Get listed on third-party sited
  • Achieve inclusion in trustworthy third party reports
  • Improve product and redesign them accordingly
  • Diversify into new markets

Product Adoption Curve Metrics

To understand the new product adoption bell curve, it is important to use some metrics. Here are three metrics that will help you deal with the product adoption situation.

Adoption Rate

Adoption rate is the percentage of new users against all users. This can be measured for a particular product, feature, or service.

Time-to-first-key action

This metric is the time it takes for a new customer to use an existing feature. Conversely, it is also the average time taken for an existing customer to try a new feature.

Core Action percentage

This is the percentage of users who have utilised or understood or used a core feature in a product for the first time. This is when the Aha! Moment is realised.

Wrapping Up

Now that you have a better understanding of the product adoption curve, you can know what to expect throughout the lifecycle of your product. When you know this, you know your customers, helping you to serve them better. Within every phase of the curve, you need to get users excited to use your product. This can help propel your product success beyond what you would have expected. Product adoption is easily the most important thing for product teams. Analysing product adoption groups and forming product adoption strategies accordingly will help improve product success.

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Originally Published May 26th, 2020, Updated February 26th, 2021

Rakhin V

Rakhin has over 10 years of experience driving business development and client services. In his prior roles, he stayed close to customers to understand their requirements and help them achieve their business goals. He is passionate about customer success.

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