12 Product Adoption Metrics and KPIs to Track for User Adoption

12 Product Adoption Metrics and KPIs to Track for User Adoption

Key Takeaways:

• Measure Product Adoption to Drive Retention: Monitoring key product adoption metrics helps identify where users are struggling, allowing for targeted improvements that increase customer satisfaction and reduce churn.

• Optimize Onboarding for Higher Conversion: Effective onboarding plays a critical role in user adoption. Simplifying this process leads to faster Time to Value (TTV) and ensures users understand and use essential features.

• Track Feature Engagement to Improve User Experience: Regularly assessing which features users are adopting can highlight friction points, guiding product updates to ensure all features meet user needs effectively.

In the SaaS world, getting users to sign up is just the first step. The real challenge is making sure they keep using your product and incorporating it into their daily workflows. The stakes are high—churn rates are climbing, with 56% of SaaS companies earning between $3 million and $8 million seeing a drop in retention last year. As companies look to tighten budgets, keeping customers engaged and loyal is more important than ever.

So, how do you ensure your product doesn’t fall off users' radar? It’s not about completely reinventing your product; it's about understanding how your customers interact with it. Tracking key product adoption metrics and KPIs gives you insight into what keeps users engaged, what features they use, and where they might get stuck.

By keeping an eye on these metrics, you can refine your product to better meet customer needs, improve their experience, and boost retention. But which metrics are the most important? Keep reading to discover 12 critical product adoption metrics your SaaS company should monitor to keep users engaged and drive long-term success.

Also read 📚: How to Reduce Customer Churn in SaaS Businesses in 9 Steps

Also read 📚: The 12 Best Ways to Increase SaaS Retention

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What Is Product Adoption and Why Should You Track It?

Product adoption is the process by which your users become familiar with and start using your product effectively. It's about the journey from their first login to the point where your software becomes an integral part of their daily operations. This metric isn’t just about whether someone has downloaded your app or logged in; it's about how they integrate it into their workflows, use its features regularly, and depend on it for their tasks.

So, why should you track product adoption? Simply put, it's a clear indicator of your product’s value. When users fully adopt your product, it means they find it useful enough to keep using it over other options. Tracking adoption is crucial because it directly influences SaaS customer retention, satisfaction, and, ultimately, your revenue.

Tracking product adoption helps you identify points where users might struggle or lose interest. This allows you to intervene with improvements or tailored support to refine the user experience. You can adjust your onboarding process, enhance features, and even guide product development based on actual user behavior.

Also read 📚: The Most Important 17 SaaS Metrics to Measure and Improve Your Business

Also read 📚: SaaS Customer Onboarding: Best Practices and Checklist

12 Product Adoption Metrics and KPIs You Should Monitor

Here are 12 essential indicators that will help you keep tabs on how your users interact with your software:

Conversion Rate

The conversion rate measures the percentage of users who take the desired action with your software. The action could range from signing up after a free trial to upgrading a subscription level. It tells you how well your product is convincing users to make the leap from interest to commitment.

Here is how you calculate the conversion rate:

Conversion Rate (%) = (Total Number of Users/ Number of Users Who Completed a Specific Action​) ×100

Tracking your conversion rate clearly indicates your product's initial appeal and ongoing value to users. A high conversion rate suggests your onboarding process is effective and that your product meets users' needs and expectations. Conversely, a lower rate may signal a need for adjustments in product features, user experience, or even how you communicate your product's benefits.

Customer Lifetime Value (CLTV)

Customer Lifetime Value (CLTV) quantifies the total revenue you can expect from a single customer throughout their relationship with your company. It's a strong indicator of both customer loyalty and the effectiveness of your user adoption strategies.

A high CLTV suggests that customers value your product enough to continue their subscriptions. A low CLTV might indicate a problem with how users are adopting and integrating your product into their operations.

Tracking CLTV is crucial because it measures financial contribution and serves as a high-level check on the health of your product adoption. When you understand the CLTV, you can make informed decisions on where to allocate resources to maximize user satisfaction and retention.

Feature Adoption Rate

The feature adoption rate tells you how many of your users are actually using a specific feature of your software. Here is how you calculate it:

Feature Adoption Rate (%) = (Total Number of Logins or Active Users/Number of Monthly Active Users for a Feature​) ×100

This gives you a clear indication of how engaging and useful each feature is to your users. This metric highlights potential points where users might be experiencing friction. Perhaps they're not aware of the feature, or maybe it's not as accessible or intuitive as it needs to be.

By identifying features with low adoption rates, you can focus on improving these areas—whether that means tweaking the feature itself, enhancing your onboarding process, or ramping up feature-specific training. This strategic focus ensures that every part of your software is performing well and effectively meeting your users' needs.

Usage Frequency

Usage frequency measures how often your users return to your SaaS product after the initial onboarding phase. It shows the level of ongoing engagement and value users find in your product. A higher frequency suggests that users see significant benefits in your software, likely increasing their overall satisfaction and retention.

To calculate usage frequency, you can use this formula:

Usage Frequency (%) = (Number of users who access the product within a specific time period/Total number of users) ×100

You might look at metrics like monthly active users, weekly active users, or daily active users as a percentage of your total user base to get a clear picture of how often users engage with your platform. By monitoring usage frequency, you can pinpoint users who might need extra help understanding your product’s features, guiding you to offer targeted support or additional training.

Time to Value (Time to Adopt)

Time to Value (TTV) measures how long it takes a new user to realize the tangible benefits of your product after they start using it. This timeframe begins when a user first interacts with your software and extends to when they hit that critical 'aha moment'—the point where the value of your product becomes evident and impactful to them.

Why is this important for you as a SaaS business owner? TTV gauges the effectiveness of your onboarding process and indicates how quickly your product can satisfy user needs. A shorter TTV means your users are quickly finding value, which boosts their satisfaction and increases the likelihood of conversion to paying customers.

To start measuring TTV, you'll need to define what the 'aha moment' looks like for your product. It might be as simple as a user engaging with your product a specific number of times or completing a key setup step, like creating a customer profile. Use these indicators to track and optimize the time it takes users to see the real benefits of your offering.

One way to decrease your TTV is to incorporate a product tour when someone logs into your product for the first time. Many websites uses a product tour to make it easier for users to navigate the product and find value sooner in the screenshots below.

Net Promoter Score (NPS)

People usually recommend products they believe in passionately—not just ones they feel indifferent about. That level of endorsement often reflects deep satisfaction and a strong belief in the product's value.

This is where the Net Promoter Score (NPS) becomes a crucial metric for your SaaS business. NPS measures the likelihood that your users will recommend your software to others, directly indicating how much they have adopted and appreciated your product. A high NPS not only shows that your product meets user needs but also turns customers into advocates, extending your reach organically.

Activation Rate

The activation rate indicates the percentage of new users who complete a predefined set of actions to become active customers. This measure is key to understanding how effectively your onboarding process guides new users to a crucial engagement point, or what you might consider your activation event.

For example, achieving a quick time to value—let's say 25 seconds—is impressive, but it’s not enough if only 35% of your users reach your activation milestone. A low activation rate suggests it's time to revisit and simplify your onboarding flow.

Enhance user motivation by making the process straightforward, visually showing progress, and providing incentives for reaching milestones. Prioritizing these aspects ensures that more users not only try but also integrate your product into their workflows efficiently.

Churn Rate

Churn rate is a critical metric that tracks the percentage of your customers who stop using your SaaS product over a given period. It’s an inevitable aspect of any business, but understanding and managing churn can enhance user retention and overall success.

To calculate the churn rate, use this formula:

Churn Rate (%) = (Total number of users lost during a specific period/total number of users at the start of the period) ×100

This figure gives you insight into how many customers you’re losing in comparison to your total user base. Regularly tracking your churn rate, such as on a monthly basis, allows you to gauge the effectiveness of your user adoption strategies.

Average Session Duration

For SaaS companies, the goal is to keep users logged in and actively using the platform. The average session duration measures how well you’re achieving this objective by gauging how much time users spend with your SaaS product during each visit. It’s a direct measure of user engagement and an indicator of how quickly users are finding value each time they log in.

When users spend ample time engaged, it often means your product is effectively meeting their needs. Conversely, shorter sessions might be a red flag, suggesting that users aren’t fully engaging with your product, which could hint at future churn. When applying this metric, you should recognize that your product's goal influences the interpretation of this metric.

Longer sessions may not necessarily mean better performance for services designed to streamline tasks and save time. It could indicate that users are struggling to navigate or complete tasks efficiently. Therefore, it’s vital to establish a target average session duration that aligns with your product’s objectives.

Customer Tickets by Feature

It's easy to overlook complexities in your software’s design when you're familiar with every nook and cranny. However, when users encounter these complexities, their frustrations often lead to customer support tickets. Tracking customer tickets by feature isn't just about counting problems; it’s about understanding where your users are struggling and stepping in before they decide to leave.

Analyzing the reasons behind these tickets allows you to quickly identify and address UI and UX issues. This proactive approach helps you to refine your software, making it more intuitive and user-friendly with each update.

Upsell Rate

When customers start seeing your product's real value, they're more likely to invest more in what you're offering. You should use the upsell rate to measure how many of your customers are convinced enough by your product to purchase additional features or services. To calculate it, use the following formula:

Upsell Rate (%) = (Number of customers who purchased additional offerings/Total number of customers in the same cohort) ×100

A high upsell rate indicates that your product meets and exceeds user expectations, compelling them to invest further. Analyzing this metric by user segment can provide deeper insights into which groups are most engaged and see the greatest value in your offerings. By focusing on what resonates with your top-performing segments, you can replicate this success elsewhere or adjust your approach for segments with lower performance to enhance their experience and perception of value.

Customer Satisfaction (CSAT)

Have you ever wondered if your users genuinely enjoy your product after key experiences like completing the onboarding process or trying new features? Customer satisfaction (CSAT) scores are your go-to metric for measuring just that. Through short, straightforward questionnaires typically rated on a 1–5 scale, CSAT helps you gauge immediate user sentiment following significant interactions with your software.

While other metrics on this list quantify usage, CSAT dives into user sentiment. It answers critical questions: Do your users actually enjoy your product? Was their experience positive? With this information, you can pinpoint areas for improvement to ensure your product isn’t just functional but also a joy to use.

Leverage Hopscotch to Boost Product Adoption

If you're looking to streamline user onboarding and enhance feature adoption for your SaaS product, consider Hopscotch. This interactive product tour software is specifically designed for SaaS startups, offering a dynamic way to enhance how users interact with your software. Hopscotch can boost your product adoption in the following ways:

Streamlining User Onboarding

Hopscotch revolutionizes user onboarding by delivering targeted, timely messages. From the moment users engage with your product, Hopscotch helps reveal the real value of your features, simplifying complex functionalities and guiding new users through crucial processes. This targeted approach not only reduces churn but also accelerates user adoption effectively.

Enhancing Feature Adoption

With the Hopscotch feature adoption solution, you can craft custom onboarding flows and modules tailored to foster deep understanding and feature utilization. It provides users with engaging product tours that can include text, images, videos, and more, ensuring they receive the right information at the right time. This strategic delivery aids in steadily introducing users to new features, enhancing their experience, and increasing overall feature adoption.

Ready to boost product adoption by transforming how users interact with your product?Sign up for Hopscotch today and start building engaging, informative product tours that convert visitors into loyal users.