How to nail product adoption in an oversaturated SaaS self-serve market

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Written by: Sneha Farkya

Updated on: 9/20/2022

Back in the day, SaaS applications were hosted and carried on the provider's servers, updated with new features from time to time. The advent of Software as a Service (SaaS) made buying and procuring software easy. One could access software without installing or maintaining it in exchange for money.

According to Jack Flynn's Cloud Adoption Statistics, 94% of enterprises use cloud services. Moving to the cloud has increased security, enhanced globalization, reduced costs, and facilitated agility.

That’s not it. Today, multiple modules are involved in building a SaaS application - from authentication, user management, monitoring, billing, and analytics. Still, users have to wait hours to get technical support for a product.

Around this time, software was always sold top-down. But as the number of teams in a company started to increase, the amount of products that they used for their day-to-day operations increased. Since each user has different requirements, they must understand and look for products that can fulfill their unique needs.

Thus slowly, this enterprise motion of selling software got replaced by the self-serve approach.

Realizing value in self-serve SaaS

People discover solutions to their pain points in multiple ways. Such as through social media, organic searches, referrals, and word of mouth.

When the unique features of your product and the ability to solve specific problems of the people match, the user opts to try your product, if they find your product useful, they subscribe.

While this SaaS user journey sounds straightforward, product adoption is hard to achieve. In an ideal world, as soon as the user acquires the product, they become familiar with it, explore its features, troubleshoot any problems themselves, and eventually become satisfied.

But we do not live in an ideal world, and to achieve product adoption, your product needs to deliver its value to the customer in the most effective way possible throughout their lifetime.

The key to finding your product value lies in onboarding

Product Adoption is essential for advancing users’ awareness of the product to understand its value.

The primary way to acknowledge your product's value is by onboarding users successfully. This can be entirely led by your product or assisted with a knowledge base the users can refer to. An onboarding session with your account manager will also help if your product is complex. The end outcome is to set the customer up for success.

But how do you know whether your product is engaging its users? If so, how do you know if it is promoting customer retention? How frequently is a user likely to return to use your app or product after the first time?

Metrics to gauge product adoption

There are a few key metrics you can use to track product adoption. They are,

1. Adoption Rate

The adoption rate is a way to measure how soon someone adopts your product. It is expressed as a percentage of active users to users who signed up in a given period.  This can be calculated monthly or on a quarterly basis.

For example, the adoption rate when there are 200 new users out of which 20 are active users is calculated as,

200*100 /20 = 10%

Adoption rate: number of active users x 100 / number of new users

Therefore, the adoption rate is 10%.

2. Daily Active Users / Monthly Active Users (DAU/MAU)

This metric measures how often users interact with your product and captures the value gained from it, implying that users who engage with your product more often get more benefits from it.

DAU/MAU is often a key metric for SaaS companies to measure engagement and revenue. The better the number, the more efficiently your products get adopted.

The number of “active” users can be determined by their activities on your product, such as submitting a report or uploading an image. To obtain the DAU/MAU ratio,  divide the DAU by MAU and multiply by 100.

Ratio : (DAU/MAU) x 100

3. Conversion Rate:

Conversion rates indicate how well your product leads users to take the action you want from them such as converting from a free plan to a paid plan, opting for trail or even moving to a higher paid feature.

Divide the number of conversions for your product over a period of time by the number of visitors to find the conversion rate for your product.

Conversion rate = the number of conversions / the total number of visitors.

You can define "total visitors" in various ways: every new signup, every click, or every new customer.

4. Average time of the first action:

This refers to the amount of time it takes for a new user to use an existing feature or an existing user to use a new feature for the first time is known as the average time-to-first action.

You must implement strategic practices like tooltips or email marketing to nudge users to try out new features.

Factors contributing to product adoption at different stages of the customer lifecycle

The best way to cater to product adoption is at every user journey stage. There are typically five stages in obtaining a new user. They are:

Awareness

This is your first step, where you inform users about your product/solution. One of the ways is to circulate advertisements that help to attract more customers. Use this phase to promote your product’s features and how they can solve your user’s problems.

In this regard, you can achieve your goals in various ways, ranging from aggressive marketing campaigns to referral programs, such as what PayPal did in the early 2000's.

PayPal pioneered referral marketing where users can refer their friends, and receive 5 dollars as a reward. The campaign ended up being so successful that they saw a growth of their user in double digits. Users went through all the stages of adoption, from awareness to activation, at the cost of 10 dollars per user.

Paypal referral
Source: Viral Loops blog

Interest

At this stage of the journey, the potential customer knows about your product. However, the product hasn't piqued their interest yet.

One way to optimize for interest is to avoid technical jargon and  speak in your customers’ language.  Maintain user-centric terminology as much as possible. As a rule of thumb, it's best to talk about benefits rather than features.

You can take a page from Economize's playbook, a SaaS provider that helps reduce cloud costs for enterprises.

Economize sign up
Source: Economize cloud

This page illustrates how  something as simple as a button can speak to users' interests. The button, "Our cloud cost is a blind spot - help us attribute" highlights the user's problem and how the product helps the user.

Evaluation:

Now that you have captured your potential customer's interest, the user moves on to evaluation. In this stage, the user evaluates if the product is best suited for them.

At this phase, you must communicate your product’s core features and strengths to the users. But personalization is vital since every user’s need is different. Make sure the communication is tailored accordingly.

For example, an enterprise customer may not fret about pricing, but the same cannot be said for a student.

Notion’s pricing speaks to this: their Free plan is set to attract independent creatives, whereas their larger plans are usually opted for by scaling organizations. Even the images around their pricing speak to the target audience.  

Notion's pricing
Source: Notion pricing

Trial

After all the hard work, now, the customer is ready to test your product.

Freemium models and personalized trials are two top ways to help users experience your product’s strengths firsthand.

The freemium model provided by Zapier helps the users get started with the product and experience it on their own time to determine if it suits their needs.

Zapier personalization
Source: Zapier

Trials, however, can be personalized to the user’s needs. Airtable prepares the user for the trial by asking simple questions and creating their first base from their responses.

Airtable
Source: Airtable

Adopting (or rejecting)

The last and final step of the user journey would decide if your product is worth adopting.  But apart from mere adoption, your product must convince, satisfy and provide value to your customers on an ongoing basis to keep the users for the long haul.

How do we foster better Product Adoption?

While we have described all aspects of onboarding and product adoption, there are other factors can play a significant role in your product adoption journey.

  • A smooth Sign Up process followed by fewer questions will help customers engage more with the product. People may give up if your signup flow is buggy, ask for too much information, or make it difficult to see what needs to be completed. Asking minimal details such as name, email, and phone number will work for you and the prospect.  
  • You may have noticed that while signing up on any application, there is a checkbox labeled “Allow us to send emails and newsletters.” Organizations use this feature to inform their users about new features and ultimately increase customer retention.
  • Providing users with a video tutorial will act as a walkthrough and guide them to value. Instead of reading an article, watching a mini video will be more comfortable and be a time saver. Personalized tours demonstrating your app will increase the percentage of customer retention.

Trainn provides a complete video onboarding toolkit that proves to be very powerful in navigating through your product. It is an efficient alternative to long-form documentation. With Trainn, you can create product how-to videos and training videos that engage your users.

  • In-app chat boxes will answer your customer’s curiosity, helping them troubleshoot their queries and get answers.
  • You can help your users get the most out of your app by providing a proper walkthrough of its features. Adding interactive tooltips to make users understand each feature better.
  • Enhance the customer experience to increase adoption. A quality product with easy-to-use features will add value to the customer’s experience.

Today’s SaaS products provide a solution for every problem. But the question comes back to, how likely is your customer to adopt your product in a sea of solutions?

Your onboarding metrics can give you an insight into this. You should identify and measure all factors contributing to customer engagement, retention, and growth. Acknowledge these metrics carefully and work on the feedback. The more you emphasize feedback, the better the retention will be and the more loyal and long-term your customers stay.

It’s hard to start with the perfect product adoption strategy, but you’ll get there if you start with the suitable systems as the product is built. Many users are searching for potential solutions to their problems. With a perfect self-serve strategy coupled with a delightful onboarding experience, there’s so much you can ride on!

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