Defining Adoption and Engagement Metrics
It’s easy to get confused about the difference between adoption and engagement. The goal of this article is to clearly outline this distinction and provide tips on how to improve each area. This article assumes that you’ve already built something, found product market fit, and established a process to acquire users.
To summarize this post: adoption focuses on configuring users, while engagement focuses on retaining them.
Why does it matter?
One of the biggest challenges for a SaaS company is acquiring users. For every dollar that is spent on user acquisition, you need to be able to retain and grow it. Continuously improving how your product adopts and engages users can accelerate growth.
Churn is the enemy of Saas growth.
Phase 1: Adoption
What is it and why is it important?
Adoption refers to the early indicators that lead to long-term success. Any user can sign up for a product, but a user typically adopts the product only if it helps them achieve a certain goal. For example, Facebook
Companies with high adoption rates acquire new users very efficiently, and would benefit from lower cost per acquisition and higher marketing return on investment.
How to increase adoption
Tip 1: Establish an activation criteria
The activation criteria are the things that you know if our customers do, they’re more likely to come back to the second month. Make sure that all of a user’s initial interactions with the product are specifically designed to get them to activate.
Tip 2: Create a great user onboarding experience
It’s difficult to get a user to learn more about your product. Make it easier by using a combination of tool tips, tutorials, guides, and empty states to creatively ramp up users until they are able to understand the product enough to start using it.
Tip 3: Be patient with non-essential features
A typical SaaS has many features to show off, but you don’t want to bombard the user with them after registration. You want to send the right message at the right time at the right place. For features outside of the activation criteria, show the rest through progressive disclosure while the user is exploring your product.
Phase 2: Engagement
What is it and why is it important?
So once the user is adopted and has realized the value of the product, it’s time for engagement. Engagement focuses on the consistency of actions that determine what a healthy user might look like. Now the priority would be making sure that the user continues to use the product. Continuing on with our Facebook example,
Companies with high engagement would benefit from higher customer lifetime value and higher retention.
How to increase engagement
Tip 1: Continuously build what your users need
Always be shipping, which means always work to provide more value with your product. This shows customers that you are listening to their feedback and aligning the product with their goals.
Tip 2: Enable your users and create best practices
Make sure to dedicate effort towards enabling users to do a better job with the product and helping them with problems they’re facing. This could be in the form of an online community, knowledge base, or world-class support.
Tip 3: Re-engage your users
There is a chance that users might become inactive despite being previously adopted. Attempt to re-engage your users, but consider it a last resort, as the user has probably already made a commitment to stop using your product.
To optimize the user lifecycle, you should meticulously track everything in your product.
Try to measure holistically rather than in binary. For example, instead of marking users as adopted when they’ve completed the activation criteria, create an adoption score that factors in the number of activation criteria steps that they’ve completed. In a similar approach, create an engagement score for each feature they use and compile those to generate an overall score.
Activation criteria: Feature 1, Feature 2, Feature 3
Feature 1 Adoption Score / total # of features
Feature 2 Adoption Score / total # of features
Feature 3 Adoption Score
Total Adoption Score = Feature 1 Adoption Score + Feature 2 Adoption Score
Aggregate scores can be used to get a better look at the areas that need improvement and produce a better understanding of the user lifecycle. You can now identify the areas causing friction or significant drop-offs, and choose to refine or remove them.
Please note that adoption and engagement are not one-time problems that can be solved, and these processes should never be considered complete. They should be updated regularly as the product changes over time.
Congratulations! With high adoption and engagement, you are on your way to achieve hyper growth. Keep at it to achieve world domination.
One thing to stress is that this cycle does not simply move forward, and they are not one-time problems that can be solved. This process should never be considered complete. This process has to be updated regularly as the product changes over time, and they are continuous processes that complement each other. So as you meet the needs of your users, the methods that you use to measure their satisfaction with your product should change as well.
Thanks for reading.