Product adoption happens when customers know of and share the value of the products they use. In its best form, product adoption goes far beyond purchasing. Instead, customers become themselves, advocates for the product and actively work to implement it into their work and lives. For Software-as-a-Service (SaaS) companies especially ones that run on a subscription model, this can be incredibly important as it usually translates to lower churn and greater life time value for customers among other important benefits.

Tech giant Apple is a good example of successfully executing a product adoption strategy. Apple’s users take it as a matter of pride to carry and use Apple products and indeed many subscribe to the whole ecosystem of Apple products from their personal computers, handphones to even things like the Apple-polishing cloth. While Apple is not traditionally a SaaS company, the ability to attract and retain long term customers via product adoption is an important takeaway SaaS companies should learn from.

This is incredibly important because it helps build long term success. Some key reasons for why you should care about product adoption for your SaaS are:

1) Acquiring new customers is 5 - 25 times more expensive than retaining current ones.

2) Research shows that increasing customer retention rates by 5% increases profits by 25% to 95%.

3) Adopters are ideal targets for product expansion strategies such as cross selling or upselling, increasing your revenue.

This article will give you an overview of the 6 stages of product adoption for SaaS that cuts across marketing, sales and customer success functions. As we examine each stage we will provide tips as well as examples of engagement that you should consider implementing.

Stage 1: Awareness

This is where a potential customer first learns about your product. Another term for potential customers at this stage is leads. Generally speaking, awareness building is via marketing efforts or via word of mouth. Building awareness among leads is supremely important, after all how are people to purchase your product if they are not aware of it in the first place. Depending on the nature of your business and profile of your customers the means of reaching out can vary widely.

Some examples of marketing efforts to raise awareness are:

1) Display Advertising

2) Social Media

3) Search Engine Optimisation (SEO)

4) Referral Campaigns

5) Email Campaign

Ultimately awareness is a volume game and what you are looking for is mindshare and is measured through analogous data points such as page views, click thru rates, etc.

Stage 2: Consideration

This is where a potential customer has identified that they have a problem to be addressed and is actively looking out for product offerings that may address this.  Another way of describing customers at this stage in marketing terms is a marketing qualified lead (MQL). A MQL is a lead that has engaged with your company and could if nurtured correctly be ready to make a purchase.

Engagement with a MQL could come through in a number of ways such as:

1) Trials/Samples

2) Newsletter Subscription

3) Experience Pages

4) Case Study

5) Ad Re-targeting

With a MQL, the key goal is to show them the value of your product offering and why it is uniquely suited to address their problems. A simple way of evaluating a MQL and when they may be suited is via Lead Scores.

Lead Scoring is the process of assigning numerical values to the points of interaction a lead has with your business. For example, this could be page views, emails opened and any contact information they have submitted. Lead Scores have to be determined by each company and may be adjusted as more information is generated from the collection process. Lead Scores helps you prioritise leads who have been sufficiently nurtured and are ready for engagement with in stage 3.

Stage 3: Purchase

This is where a potential customer is ready to make a purchase decision. Another term for such a potential customer is a sales qualified lead (SQL). A lead has expressed or can be inferred to have generated enough interest that you are ready to move on into your sales process, for example via Lead Scoring.

At this stage sales personnel generally take over the engagement from the marketing team. They engage with the SQL to help close the sale. Some examples of such engagement may be:

1) Sales meetings

2) Addressing tech integration

3) Addressing security concerns

4) Managed large scale trials

In instances where your product has optimised for self-service purchase, it may also be possible that leads transit through this stage without engagement by sales personnel, instead choosing to make a self-service purchase.

Stage 4: Activation

The lead has made the purchase and is now a paying customer. This is a critical part of the product adoption process and can make or break the ultimate adoption of a product.

At this stage the sales team will hand over the customer to the customer success team for engagement. The key goals for the customer success team are to ensure activation rates are high for the customer so that usage starts high and remains high. Some examples of engagement:

1) Goal/expectation setting meetings

2) Training

3) Onboarding

4) Support interactions

5) Feedback

6) Usage Data Analysis

Customer success teams would do well throughout activation that customers and their users have the correct resources on hand to complete their activation events. One example is through training videos or FAQs for how to carry out functions. Another option is via a digital adoption platform such as Usertip that can create in-application walkthroughs for how to carry out certain functions. This ensures users never have to leave your product for step-by-step automated guidance that can be triggered upon their first login or on-demand.

Stage 5: Renewal

The customer has come to the end of their term and is ready for renewal. The customer success team should have consistently followed up and should be aware and confident of closing renewal.

At this stage, depending on the changing needs of the customer this may be a good time to upsell the customer accordingly. Another potential angle of engagement may be to review with the customer for potential cross selling opportunities for other solutions that along with the currently being used one creates an ecosystem which can offer more value to the customer. Involving a customer in a single ecosystem help create stickiness.

Stage 6: Referral

The customer is so pleased with the application that they are ready to refer it to other people. The customer success team and the sales team should follow up closely at this point. An important way of tracking propensity and readiness for referral is via Net Promoter Score (NPS) tracking. One important thing companies can do to encourage this behaviour is also to create incentive programs for referral.

Conclusion

Product adoption for SaaS can mean the difference between a customer who only pays once and a customer who never stops subscribing and is constantly referring you new business. In those terms, you can see clearly why it is important and definitely needs to be a focus for your company today. If you would love to learn more about Usertip and how we can help you supercharge your product adoption process please do check out our page here.

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