Leveraging the Product Adoption Curve For Growth Hacking

When it comes to growing your SaaS business, understanding the needs of your customers is crucial. But sometimes even if you know your audience exceedingly well, you still get stuck. This is not unique to you but indeed happens to even the best of businesses.

In order to break this deadlock, many business leaders have turned to incorporating the product adoption curve to better frame their growth hacking efforts and guide their product lifecycle management. If this sounds unfamiliar, worry not! At Usertip we care deeply about product adoption and in this article we will introduce the product adoption curve and what it means for your growth hacking efforts.

The Product Adoption Curve

The product adoption curve is a model that answers 2 important questions:

1) Who are the different buyers of your product; and

2) When do they buy?

This is what the product adoption curve looks like:

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This product adoption model most familiarly consists of 5 distinct stages which as a whole define how product adoption happens. As business leaders a detailed understanding of customers at each stage can drastically alter how we can hack growth through redesign of our product, marketing, customer support and customer success strategies. Let’s see how this works in detail.

Stage 1: Innovators

Innovators is the term for your first group of users who utilise your product. Generally, it is thought that 2.5% of total sales comes from innovators. While small they are an important milestone to hit as we grow our products. So, what exactly are the characteristics of an innovator and how do we target their needs.

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People who are innovators tend to be obsessed with technology and find gratification from being on the cutting edge. They are often motivated by using technology for their own sake.

Innovators often have a strong aptitude for technical information and specifications. They enjoy testing new products and can live with minor issues or flaws in your product. Innovators typically are open to helping out your team with feedback, reviews or just generally being product champions if you are able to satisfy their needs.

To growth hack this group of users, we need to play to their characteristics by providing them access to technical information and personnel. Cost is also a factor for innovators and charging an overly high price may drive them away. Innovators are not just your customers; they are also often your first avenue for word-of-mouth marketing and user testing and should be viewed as partners for pushing your product to the next level.

Stage 2: Early Adopters

If you play your cards right, at some point you will begin to see a growing number of sales and a steadier conversion rate. These are indicators that you have entered the early adopters phase of the curve which tend to make up 13.5% of total sales.

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Early adopters tend to be ahead of the general populace and willing to brave mostly unknown waters. The primary motivation of early adopters is to gain revolutionary competitive advantage via technology. As opposed to innovators who enjoy playing with technology, they are motivated by strategic advantages that technology can bring to leapfrog others.

Early adopters tend to have great imagination for strategic application of technology and are willing to accept the risk of using untested technology in the face of a potentially high reward. Early adopters are not as price sensitive as they are looking for improvements that are orders of magnitudes above what is currently in place.

To growth hack this group of users, we need to play to their characteristics by offering a rapid time to market in particular to fulfil their strategic applications. Depending on their needs, early adopters may demand a high degree of customisation and support but correspondingly are more willing to dole out the dollars for doing so. Early adopters are the customers who will more concretely fund the development of your product in the early days if you can fulfil their strategic needs in the requisite time period.

Stage 3: Early Majority

A third wave of sales and higher conversion rates usually indicates the arrival of the early majority who represent 34% of total sales. The early majority also marks the start of your product’s peak and a sign that your product has gained mainstream recognition.

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The early majority in contrast to early adopters are typically not looking for revolutionary improvements in technology. While still willing to take some risk, they are more pragmatic and looking to gain sustainable and proven improvements in productivity. They very much prefer to buy only when a solution has been tested and proven its value.

The early majority focus on proven applications with a good track record. They are less concerned about the technology specifications and instead driven by the real-world results and trade-offs. They are more likely to go with market leaders and to compete with incumbents you should directly how your ability to match or exceed them. Many early majority users may be managers of mission-critical applications or have operational rather than strategic duties. This means they are concerned with continuity, stability and proven effectiveness rather than order of magnitude improvements.

To growth hack this group of users, we need to play to their characteristics by ensuring we have a good track record and references to back them up. Preferably these are from similar companies and/or users who share a similar context. Early majorities also appreciate seeing the solution in action before committing to long term projects.

Stage 4: Late Majority

Your product has been out for a good amount of time and there is widespread use and brand name recognition in the industry. There may however still be folk who remain a bit sceptical and these late majority users will form the next 34% of your total product sales.

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The late majority tend to be highly risk adverse. Their key motivation for adopting technology is simply to stay even with the competition and avoid competitive disadvantage. They usually are not as interested in technology as they are in the people and benefits for people in using technology. Risk adverse, price sensitive and not always being most up to date on technology trends, they often rely on a trusted advisor for their technology needs. Examples of these may be a consultant, system integrator a trusted friend or even their internal head of IT.

To growth hack this group of users, we need to play to their characteristics by ensuring we have pre-assembled products that are prepared and ready to meet their needs. The late majority is less likely to want to deal with specific customisation and more likely to want out of the box solutions that already fulfil their needs. Price sensitivity also means that they are more likely to be attracted by discounts while being less willing to pay for value added services. Given their lack of familiarity with technology, the late majority may ironically be the ones most benefiting from value added services and in the view of longer-term customer retention, leaders should consider whether it makes sense to offer these at a reduced rate to build longer term trust and relations with the late majority.

Stage 5: Laggards

Laggards represent the last 16% of your total sales. These may be extreme sceptics or may somehow just not have heard of your product before. The latter may indicate a marketing or user targeting blind spot.

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Laggards dislike change. They know their existing processes and workflows and disbelieve arguments for how technology will improve productivity preferring to stick with the current status quo. Being sceptics, they rarely believe in marketing hype and often worry about unintended consequences. In earlier stages of your product adoption curve, laggards are most likely to be the ones who are blocking your product adoption.

To growth hack this group of users… is likely quite difficult. By their very nature laggards are not likely to be easily convinced nor be easily targeted for growth efforts. Instead, the adoption of technology by laggards is more likely to be as a matter of necessity rather than any personal desire. For example, the mainstream shift to the use of text messengers like Whatsapp, Telegram and Facebook Messager over SMS meant laggards were “forced” to shit to the use of smartphones. If there is to be a key to winning over laggards, it would be less about focusing on them specifically. Instead, it is important to create ecosystems of value which would push all users, including laggards by extension, towards your product.

Conclusion

Whew! That was a bit of a long information download, but hopefully it has helped you build a conception of the different kinds of customers and how to approach and target each of them. It is critical to remember that at different stages of the product adoption curve you should adjust your messaging and your strategy to fit different needs. This is not just in reference to marketing efforts but also product roadmaps, customer support & customer success efforts. By aligning all your business arms with the different needs of customers as your product matures and user characteristics morph, you are better able to hack growth and generate a sustainable healthy customer base.

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UserTip is a Digital Adoption Platform offering no-code builders for product walkthroughs and tooltips that can be pushed to your platform within seconds. Click here to find out more, or click here to speak to a product specialist.

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