Measuring success: 12 key adoption metrics for product development

Measuring product adoption is integral to the success of your company. You need product adoption data to know if your software is successful. 

Otherwise, you risk flying blind. Improving your products without customer insight can waste your time and effort. 

It’s essential to track product adoption regularly. It’s the best way to see how users engage with your product and what leads to product adoption. You can also uncover how to assist users in the onboarding process to increase adoption rates. 

Wondering how to measure product adoption? In this article, we'll explore 12 key metrics you should track to better understand your product adoption rate. 

Product adoption is the process in which new or existing customers accept, integrate, and use a new product. 

The process starts with the customer’s product awareness and understanding, followed by the decision to try the product and incorporate it into their routine or workflow. 

Product adoption is a key metric for businesses to calculate. It can help them measure the success of their product and how their target market is using and perceiving it. 

High product adoption means users know your product's value and use it regularly.  

Product adoption metrics give you valuable insight into how well users are adopting your product and what you can do to improve product adoption. 

If you want to improve customer experience and increase conversion rates, you must understand user behavior. 

What features are users engaging with? Are common fall-off points preventing user adoption? 

Measuring product adoption metrics gives you an idea of what users find valuable and the underperforming aspects of your product that need improvement. 

This can help you create a product roadmap to make changes, improve conversion rates, and guide users toward product adoption. 

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You'll need to measure adoption over time to be sure you’re improving your product adoption. While you can use numerous metrics to measure product adoption, they won’t all be a good fit. 

The user adoption metrics you choose to track depend on what’s essential to your business and whether you're coming from a sales, marketing, or product development perspective. Depending on your objectives, implement the ones that make the most sense.

To help get you started with measuring the success of your product, here are the top 12 metrics to measure product adoption: 

1. Product adoption rate

Your product adoption rate is a valuable metric that shows the popularity of your products among new signups. 

Calculating your product adoption rate allows you to see how many recent sign-ups have actually adopted your product rather than just using it once or twice. 

This can give you direct insight into your product's stickiness and engagement level. 

How to calculate product adoption rate

You can calculate your product adoption rate using the following formula: 

(New active users/total signups) x 100

New active users are those who adopted your product in a specific time frame. 

Total signups are the number of users who signed up during that same time frame, including customers who only used your product once or twice. 

This formula determines the percentage of new signups who adopted your product and became active users. 

2. Customer retention rate

Your customer retention rate shows how successful you have been at retaining customers and expanding their lifetime with your product. 

A high retention rate shows strong customer loyalty and allows you to expand your product by leveraging your existing customer base. 

Your retention rate can also demonstrate how well your product engages users over a given period. 

How to calculate user retention rate

To calculate your customer retention rate, use this formula:

((Total customers at the end of a given time frame − the number of users acquired during that time frame)/total number of users at the beginning of the period) x 100

This metric can give you insight into how many customers are maintaining your service. 

If your retention rate is low, you should conduct a retention analysis to uncover why and devise ways to boost it.

3. Customer churn rate

While your retention rate shows the number of customers you retained in a given period, your churn rate or attrition rate is the opposite.  

Your churn rate can show how many people failed to adopt your product, allowing you to investigate why and make changes accordingly. 

A high churn rate could signify anything from usability issues to a mismatch with your audience or a flaw with your software. 

How to calculate customer churn rate

You can calculate your customer churn rate with the following formula:

(Total number of users lost during a specific period/total number of users at the beginning of the period) x 100

Your churn rate tells you what percentage of your customers are leaving compared to your total customer base. 

Calculating this metric is essential as it tells you how well you connect with your customers. Consider tracking your churn rate monthly to see how well your long-term user adoption strategies work. 

4. Activation rate

Activation rate measures the number of users who begin a product trial and reach a specific milestone. 

The activation rate assesses how well you’re showing users the value of your product, causing them to become active users. 

Your activation rate can determine if you've created a streamlined user experience (UX) that successfully drives a new user to complete activation.

How to calculate activation rate

You can use the following formula to calculate your activation rate:

(Number of customers who reached the activation milestone/the number of customers who signed up) x 100

This is a crucial metric for software companies as it assesses how effectively they convert new signups or installations into active, engaged users. 

You can also use this metric to assess your onboarding. Low activation rates can indicate a complicated onboarding process is preventing new users from reaching the activation point.

5. Time to value

Time to value (TTV) calculates the time it takes from sign-up to realizing a specific product benefit. 

New users take time to understand your product's functionality and the value it provides. The longer your TTV, the more likely customers will become frustrated and not reach the realization point. 

Knowing your TTV can help you streamline the onboarding process, lessen the learning curve, and identify bugs that could reduce your TTV rate. 

How to calculate time to value

Fortunately, it is fairly simple to calculate the TTV. 

To get this metric, look at the time between when a user initially signed up and completed the defined product milestone. 

6. Average session duration

The average session duration is how long a user spends engaging with your product on average. This metric measures how well your product keeps users engaged and helps them gain value. 

The average session duration can also be an early warning sign for potential churn. Shorter session durations may suggest a user is losing interest in your product or service. 

Calculating your average session duration can help you determine if you need to take proactive steps to improve user engagement. You might consider improving product design, interaction elements, or overall user experience.

How to measure average session duration

To calculate the average session duration, divide the total number of sessions by the total time spent. 

7. Usage frequency

Usage frequency measures how frequently customers use your product after the initial onboarding phase. 

This metric can help you better understand your product's adoption by spotting patterns and trends in user activity. It also allows you to improve the product experience, which goes a long way toward raising engagement and retention rates. 

This metric can allow you to segment your user base by activity to target upselling and support efforts.  

How to calculate usage frequency

You can determine the usage frequency rate by figuring out how many users accessed the product in a given period and dividing that by the total number of users you have. 

8. Product stickiness: Daily/monthly active users

Product stickiness refers to how well your product retains and engages users over an extended period. 

Calculating product stickiness can help you measure overall company success. It can also be helpful when tracking other key performance indicators (KPIs), such as customer lifetime value.  

How to calculate product stickiness

You can measure your product's stickiness by dividing the number of daily active users (DAUs) by monthly active users (MAUs).  

9. Feature adoption rate

This metric measures how many users actively use a specific feature. Your feature adoption rate tells you which product features resonate most with users. 

A low feature adoption rate could indicate that you need a better onboarding process to guide users through your product and its key features. 

It may be helpful to simplify the user experience with in-app guidance and widgets to help users get the most out of your product's features. 

Alternatively, a low feature adoption rate could indicate a feature isn't relevant to users. Calculating the feature adoption rate for your product can give you valuable insight into what is and isn't working.  

How to calculate feature adoption rate 

You can measure your feature adoption rate with the following formula:

(The number of people who used a feature/the number of people who used your product) x 100

10. Net Promoter Score (NPS)

Your Net Promoter Score (NPS) helps you measure customer satisfaction and loyalty toward your product. 

This is an important metric, as a high score means your user is happy with your product and more likely to recommend it to others. 

Your NPS can tell you how successful your product is and whether there’s something you need to improve to boost customer satisfaction and loyalty.  

How to calculate NPS

To determine your NPS, you need to directly poll users on their perception of and loyalty to your product.

You can survey them with the following question: "How likely would you recommend this product on a scale from 0 (not very likely) to 10 (very likely)?" 

People who answer 0-6 are detractors, and those who answer 9 or 10 are promoters.  

You can calculate your NPS using the formula: 

NPS = the percentage of promoters − the percentage of detractors. 

If 50% of respondents are promoters and 20% are detractors, your NPS would be 30%.

While NPS measures customer satisfaction, it usually doesn’t provide specific enough data as a standalone survey. 

Consider layering this question with another to find out why they gave you the rating they did. This can give you better insight into how customers perceive your brand and what needs improvement.  

11. Customer satisfaction score

Your customer satisfaction score (CSAT) indicates how satisfied people are with your company, brand, or product. 

Your CSAT score is essential as it helps you understand how your customers view your brand and can help you better understand sudden increases in product adoption or churn.  

How to measure customer satisfaction

As with your NPS, you calculate your CSAT score by sending a survey to customers. 

Start by asking them the following rating question: "On a scale of 1 (very unsatisfied) to 5 (very satisfied), how would you rate your experience with our brand?" 

You can use the data you receive to calculate your CSAT score. 

To get this metric, divide the total number of customers who picked "very satisfied" (5) or “satisfied” (4) by the total number of survey responses. 

Next, multiply that result by 100 to get your customer satisfaction percentage. 

Consider partnering this question with another to see why the customer gave the answer they did. This can give you valuable insight into how your product is performing. 

12. Customer lifetime value

Customer lifetime value (CLTV) measures the overall value that a customer brings to your business during their lifetime as a customer. 

This metric shows which customers remain loyal and which customers may require additional attention or retention efforts.

How to calculate customer lifetime value

To calculate the lifetime value of a customer, multiply the revenue per customer by the customer's lifespan, then subtract the cost of customer acquisition. 

Only some of the metrics we've discussed here will meet your business's needs. So, how will you know which product adoption metrics you should use? 

When choosing user adoption metrics, you need to consider:

Who is adopting

You need an idea of who your target audience is, as this affects what metrics will give you the data you need.

What features they love

You must monitor metrics that tell you which features your users like and dislike. This allows you to focus your product development on what's most in demand. 

How long users stay

Knowing how long people interact with your product and remain active users is critical. This can help you develop strategies to reduce churn rates. Metrics like retention rates and customer lifetime value can provide valuable information on how to retain customers. 

While choosing the right metrics can help you improve product adoption and customer retention, manually tracking all of these metrics can be an overwhelming prospect. 

Fortunately, digital adoption platforms can streamline this process. 

Here are three of the top programs that can help you effectively optimize your product adoption process:

Userpilot

Userpilot is considered the best digital adoption and product analytics tool. It’s an all-in-one platform that provides advanced analytics and in-app engagement capabilities. It can help you measure and increase product adoption by leveraging real-time data.

Mixpanel

Mixpanel is a product analytics platform that enables product teams to analyze in-app engagement. 

With Mixpanel, you can track events, set up reports, and monitor vital metrics with the click of a button. One key benefit is that it seamlessly integrates with Userpilot, helping you get the most out of your data.  

Appcues

Appcues supports product adoption by helping you measure product adoption on mobile. It offers basic features like tracking product usage and user behavior, and it can help you conduct user surveys and design a user-friendly onboarding process.  

After you’ve analyzed your product adoption data, you must use this data to increase user engagement and retention. 

To improve product adoption, take what you’ve learned from your data to identify adoption barriers. Identifying where users stop the adoption process can help you make effective changes to your product. 

A poor onboarding process is one of the biggest things that can turn users off. Ensure a smooth onboarding process to guide users through your product's features.   

You can also improve adoption and customer retention by informing users with in-app feature announcements. Since users might not be aware of updated or new features, these notifications are crucial in demonstrating your product’s value. 

You can reach a wider audience with email updates, blog posts, or social updates. Show infrequent users how new features and app updates can help them, and they'll be more likely to adopt your product.

Adoption metrics give you more detailed information about how customers use your product and what features they use. Engagement metrics are less detailed and simply measure things like the amount of time a user spends engaging with your product on a specific day/time. 

Customer acquisition focuses on bringing people into your business. Whether they find your product organically or through a referral, customer acquisition is about getting people to visit your website and use your product for the first time. 

Alternatively, adoption focuses on turning visitors or casual subscribers into long-term users. 

While it’s important to market your product, this work can be pointless if you can’t convert new customers into long-term users. 

Adoption metrics can help you determine what causes people to adopt your product and what features they engage with the most. You can use this information to improve your customer experience and increase user adoption.

Every product user will go through five stages as part of the adoption process:

Awareness

In the introduction stage, potential customers visit your website to learn more about your product. Your website should promote your value proposition and offer a simple onboarding process.

Interest

This is the information-gathering stage, where customers who are attracted to your product will dig deeper to learn more about it. A well-designed, high-converting website and good customer service are critical at this stage to increase conversion rates. 

Evaluation

Also called the consideration stage, this is where customers decide whether your product is worth trying. During this stage, customers need to see what sets your company apart from the competition and why they should try your product. 

Trial

Users sign up for an initial trial of your product to see what it does and how effectively it meets their needs. This is a major hurdle, as customers have actually started using your product. However, good onboarding can prevent customer churn. 

Adoption

This is the final stage of the adoption process. Customers now determine whether your product provides them with value and decide whether to adopt or reject it. 

Once you develop and implement a user adoption strategy for your product, how can you tell if it is successful? 

Fortunately, tracking the right metrics can help you understand how successful your strategy has been, allowing you to improve your product and onboarding process. 

Some of the most critical metrics that can indicate if your adoption strategy is working include your product adoption rate, retention rate, and activation rate.