What is Customer Adoption?

Processing out new product launches after days and nights of hard work, only to witness fewer purchases? Are the existing customers not interested in what you are offering? Aren’t they aware of the product launch? Or are they unsatisfied with the company? 

Well, more such questions generally lurk in the scenario. The answer to all of these lies in understanding customer adoption. Enlightening you with the term and associated details, we invite you to delve deeper into the topic. Also, don’t forget to implement the strategies we offer at the end to never face the scenario mentioned above, ever again. 

Key Takeaways: 

• Understanding Customer Adoption 
• Benefits of Customer Adoption 
• Steps of Customer Adoption 
• Customer Adoption Curve 
• Metrics to Identify Customer Adoption 
• Methods to Increase Customer Adoption 
• Conclusion 
• FAQs About Customer Adoption 

Understanding Customer Adoption 

Customer adoption can be understood as obtaining new or repeat customers on a new product launch. It is a multi-step process that aims to convert new learners about the product and old customers into buyers. Customer adoption can also be understood as the rate at which customers purchase new products or services being launched. 

Customer adoption is often confused with consumer adoption. As stated, customer adoption is concerned with the customers’ buying of products or services. Consumer adoption is concerned with gaining new consumers. 

Benefits of Customer Adoption 

Knowledge about customer adoption and increasing it offers several benefits to the company. Here are a few of them: 

Increased customer satisfaction: If a customer gets a product they need at the right time, at the best rates, and in perfect quality, they have all the factors to be satisfied with the company. It directly benefits the company by informing about the frequency of satisfied customers which influences the reputation and revenue. 

Increased brand loyalty: A brand that consistently offers products that have a positive impact on a customer’s life is more likely to retain customers. As the latter will have no reason to switch to other companies for better options, brand loyalty is likely to increase. 

Higher customer lifetime value (CLV): Customer Lifetime Value (CLV) refers to the expenditure on customers and the returns from them. The value can be of assistance in identifying the status of your customer adoption and planning the customization of strategy accordingly. 

Receive feedback easily: Customers engaging with the brands with regular interaction and usage are generally cooperative in contributing to brand development. Further, they are the source of genuine feedback on the product. 

Better resource management: With detailed insights obtained through the customer adoption process, organizations can strategically plan the division of resources based on needs. During the process, they can shift the focus more on customer interaction, and they can further know where to invest their resources after the process. It can be in marketing, customer support, or product development, depending on the data obtained. 

Increases revenue: Higher customer adoption is directly proportional to increased product usage. This increase will help upsell and cross-sell the products, subsequently enhancing revenue. Marketing is also likely to go up without additional investment, further saving costs. 

Competitive advantage: With customer adoption, you will have direct access to data on customer needs, eliminating the need to survey the market for the same.

Stages in Customer Adoption 

Customer adoption can be divided into seven stages: product awareness, product interest, product evaluation, product testing, product adoption, product retention and product advocacy. 

Product Awareness

It refers to potential or old customers getting to know about the product. It is possible through various modes such as marketing ads on social media or other mediums, marketing email, product notification, word of mouth or Customer Success Manager (CSM). 

Product Interest 

The stage includes a growing interest in the product, which is marked by additional questions or seeking information about the product. It may also include asking about the product’s relevance in their life. 

Product Evaluation 

Here, the customers will be inclined to know the product’s pros and cons. The customer will reflect on whether the product is actually essential for them or if it is worth spending the money on. The stage will also include exploring other similar options to choose the best fit for them. 

Product Testing 

The stage is marked by the customer using the product and exploring its significance and value. It can include using the product through trial or free versions. Free sign-ups, beta testing, going through the reviews and understanding the functionality through tutorials or demos will go up in this stage. 

Product Adoption 

Product adoption is the stage where the customer is set to buy the product. They have found the product to add value to their life and organization, and now they want full access to it. It will include making the payment and performing formal onboarding or other procedures, as needed, for usage in day-to-day life. 

Product Retention 

After purchasing the product, the company must gain information about the customer’s experience and reviews. A positive experience is likely to retain them. It can be further enhanced by offering perks such as proper customer service, loyalty rewards and further advantages. The key is to keep the customer happy to ensure being the priority during future purchases. 

Product Advocacy 

This is the last stage, when the customer is satisfied with the product and the brand and is likely to purchase the new launches of products or services. The customers will market the product by sharing positive reviews and by providing feedback. It marks product advocacy and is of immense importance to any brand. 

Customer Adoption Curve 

Source: Rinteractives 

A customer adoption curve provides insight for categorizing customers based on their willingness to welcome new ideas, tools and technologies. It divides the customers into five parts: innovators, early adopters, early majority, late majority and laggards. 

Innovators: They are intrigued with new technologies and products and are excited to try them. They are open to experiments, understand the presence of minor errors and hold high-risk tolerance. 

Early Adopters: They are also willing to try new products but aren’t as open to a wide variety as innovators. They are also regarded as trendsetters who offer their own opinion about the product. 

Early Majority: The early majority are open to considering the new products but they want proven ones. Their decisions are based on available data and proof of their effectiveness. They are willing to invest their time before making a decision. 

Later Majority: They go for the product only after it has been widely accepted. They want a perfect product without the presence of bugs and errors. The people in the later majority category also hold high expectations from the product and are not willing to take risks. 

Laggards: These people are extremely cautious about buying new products and are resistant to change. They are also known to be stubborn users and more inclined towards old ways and products. 

Metrics to Identify Customer Adoption 

Understanding the rate of customer adoption is helpful in strategic planning for customer adoption and retention. Hence, the following metrics are important to know: 

Customer Adoption Rate 

It can be obtained by a simple division of the number of customers who have adopted the product from the total number of existing customers. Here, you can set the criteria for when you can assume the customer has adopted the product. 

Customer Lifetime Value

The value indicates the expenditure on customers compared to the revenue generated. As a matter of fact, keeping existing customers is less costly than gaining new ones, hence making it an essential metric to focus on. It can be calculated by finding the product of the average total order amount, the average number of purchases per year and the retention rate. 

Time to First Key Action 

Here, you need to decide what stands as a key action for you to measure. The figure will inform you how likely the customer is actively seeking the product. Organizations can learn this by finding the difference in the number of days between signing up for the first time and taking the first action. 

Customer Churn Rate

It identifies the lost number of customers during a specific time. The criteria for considering a customer to be lost will also vary according to the business and company. The value can be obtained by dividing a total number of customers lost during a specific period from a total number of customers present at the start of the period. 

Number of Active Users

The metric is a direct estimate of the actual value the product is bringing to your customer’s life. You can determine if they are active with the adopted product or not, and you can estimate their satisfaction and retention level. This calculation can be done on a daily or monthly frequency, as suited for the product and company. Simply find the daily or monthly active users and divide it from the total number of users. 

Methods to Increase Customer Adoption 

Regardless of the results from metrics, the goal of the company is to increase customer adoption. Poor results will require more effort, while satisfactory ones still need to take appropriate measures. Here are some points that the companies can try to boost customer adoption: 

Focus on Customer Needs

Understand the needs of customers and develop a product that meets their requirements. Perform required research to ensure missing out on the gaps in existing products and offer updated versions accordingly. 

Incorporate Beta Testing 

Beta testing allows for feedback from customers before the product is launched. It will provide genuine feedback that can be considered before mass launch, offering enhancement of the product. 

Offer Limited Easy and Free Access

Providing limited access with access and free of cost helps customers gain first-hand experience with the product. It helps them directly pinpoint the strengths of the product and accurately judge its suitability for them. 

Connect with Loyal Customers 

Connect with such customers and provide them with lucrative offers in exchange for product usage. Seek their feedback to optimize the product. 

Share Customer Experiences 

Exhibit the value you brought to customers and their organizations. Showcase the quantitative change you were able to bring to enhance customer adoption. 

Enhance Adoption With Onboard 

Customer adoption is one of the most important aspects to focus on in the organization. Not only does it have a direct role in enhancing revenue and cutting unnecessary costs, but it also contributes to marketing as well. Improving customer adoption is also linked with the enhancement of customer experience. The same can be done via incorporation or transition to effective ERP that is a better fit for an organization. 

Onboard assists in the ERP adoption and transition by saving time and cost. Improving productivity during the process of transition and post-implementation, the well-managed process is certain to achieve the purpose easily and quickly. Connect with us now to learn how our well-crafted ERP training programs accelerate adoption of new systems in your organization! 

Common Questions About Customer Adoption 

Q1. Which tools can assist in customer adoption? 

Tools like Hotjar, Mixpanel, Userpilot and many more assist in customer adoption. 

Q2. Are customer adoption and customer acquisition the same? 

No, customer acquisition is at an early stage, where people are brought to the website. Customer adoption is the later stage, in which customers have to be converted into users. 

Q3. What factors impact customer adoption?

The factors influencing customer adoption include personal influence, needs, self-willingness to invest and the properties of innovation.