Whether you’re at an industry event, sifting through LinkedIn posts, or chopping it up with peers at happy hour, it’s a near certainty that you’ll hear the phrase product adoption. Is it an overused buzzword? Is it the most crucial component of growing a software company? Is it both?

Let's take a long look at product adoption. In this ultimate guide, you’ll dive deep into the topic. Too busy to read over 3,200 words? We get that. Use the hyperlinked table of contents on the right to jump to the most pertinent sections.

Within this guide, we’re only going to focus on product adoption as it applies to software companies.  If you're trying to increase the product adoption of your new dog-walking robot, I'm afraid you've come to the wrong place.

Understanding Product Adoption

What is Product Adoption?

Product adoption is the process by which users of a product or service begin to use it, incorporate it into their daily routines, and fully realize its benefits.

For software companies, product adoption relates explicitly to their target audience's acceptance, usage, and integration of their software. Successful product adoption is crucial for software companies as it directly impacts revenue generation, customer satisfaction, and competitive advantage. The more of a product a user adopts, the more value they see in it.

High product adoption rates lead to increased customer retention, reduced churn, and a greater potential for upselling and cross-selling. It also validates the market fit of the software and attracts investors and partnerships, fostering a feedback loop for continuous improvement and enabling the company to scale and grow in the market.

The Importance of Product Adoption

You can’t overstate the importance of product adoption for the business growth of a software company. Successful product adoption drives customer loyalty, expands market share, boosts brand recognition, and creates customer champions. 

A solid user base ensures a steady stream of revenue, enabling your software company to invest in further development, updates, and support, ensuring the product's longevity.

Historical Context of Product Adoption Strategies

Let’s briefly stroll through the key stages of product adoption to create some historical context. 

The history of product adoption for software companies can be traced through several key phases. In the early days of computing, software was often custom-built for specific hardware systems, limiting its reach and adoption. The 1960s and 70s saw the emergence of more standardized software applications primarily used by large corporations and institutions. NASA relied heavily on a customized real-time operating system to put astronauts on the moon. (yay, product adoption!) 

The 1980s marked a shift with the rise of personal computers, leading to the advent of shrink-wrapped software that consumers could purchase and install themselves. Early versions of word processors and spreadsheets began to hit the market. 

The 1990s wrought the proliferation of the internet, enabling software companies to distribute and update products remotely, creating unprecedented growth. This era also saw the rise of open-source software, promoting collaborative development and wider adoption. 

The 2000s and 2010s brought the era of Software-as-a-Service (SaaS), where companies offered subscription-based access to software hosted in the cloud. Mobile app stores further transformed adoption by making software easily accessible on smartphones and tablets.

Fast forward to today, and software adoption is characterized by a combination of SaaS, mobile apps, and cloud computing, focusing on user experience, ease of use, and continuous updates. Additionally, the growth of artificial intelligence and machine learning has introduced new personalization and automation possibilities, shaping how software companies design and deliver their products to a global audience.

What are the Challenges of Product Adoption?

If increasing product adoption was easy, you wouldn't be here reading this. Here are some of the common challenges software companies encounter when trying to increase their product adoption.

Creating Awareness for Your Product 

Building product awareness for software companies can be challenging due to several factors. To start, the intangible nature of software makes it difficult to showcase its value and functionality compared to physical products. Then there is competition. 

The rapidly evolving technological landscape creates a crowded market, making it challenging to stand out amidst numerous competitors. Depending on the challenges that your software solves, you can compete with dozens of other companies for the attention of prospective users. Users can only adopt what they are aware of.

How often have you come across a product with tremendous value and thought: “Where has this been all my life?” Many users might be thinking about your product. 

Creating awareness can also present a challenge in education. Software often requires a certain level of technical understanding, limiting the target audience and necessitating clear and relatable communication. Additionally, the absence of a physical presence makes it harder to establish an emotional connection with potential users. Complex features and functionalities can be challenging to convey succinctly, leading to information overload or confusion.

Overall, the intangibility, technical nature, and dynamic market dynamics make building product awareness a formidable task for software companies.

<Discover 10 Strategies to Kickstart Your Product Education and boost awareness>

Resistance to Change

Software users and the companies they work for can resist trying new software for several reasons. Firstly, there's a familiarity bias – users become accustomed to existing tools and workflows, making them hesitant to invest time and effort into learning something new.  

Then you have a fear of disruption or potential downtime during the transition that can deter users from adopting unfamiliar software. Sprinkle in uneasiness about data security and privacy breaches that may arise.

Once you can clear all of those hurdles, you have education and onboarding. The learning curve associated with new software can be daunting, requiring users to invest time and energy to become proficient. Many organizations do not have the time and resources to dedicate to ensuring your new users are learning your software in its totality.

Emphasis on Price Instead of Value

To shift a software buyer's focus from price to value, software companies must emphasize the benefits and impact the software brings to their business. Start by clearly outlining the specific problems the software solves and how it streamlines processes, enhances efficiency, or drives revenue growth. Provide real-world use cases and success stories that showcase tangible results achieved by other clients.
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Highlight the unique features and functionalities that differentiate your software from competitors, demonstrating how these aspects directly contribute to the buyer's objectives. Offer personalized demonstrations or trials that allow the buyer to experience the software's value firsthand.
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Utilize data and metrics to quantify the return on investment (ROI) that the software can deliver over time, showing how long-term gains outweigh the initial investment. By consistently communicating the transformative impact and long-term benefits, you can help the software buyer shift their focus towards value rather than being solely driven by price.

Poor User Onboarding Experiences

We touched on it briefly a few sections ago, but poor user onboarding can significantly hinder product adoption in software. If you want to really have fun reading this guide, take a drink any time you see 'user onboarding'.

Inadequate guidance during the initial stages of using a software product can lead to confusion and frustration among users, causing them to abandon the product before fully realizing its complete value. Sometimes this lack of guidance rests with the software provider (insufficient product education curriculum and customer support), while other failures lie with the learning infrastructure around for the user. A lack of clear instructions and tutorials can make it difficult for users to understand the software's features and functionalities, preventing them from effectively incorporating it into their workflow.

No matter where the blame lies, with proper onboarding, users may experience quick wins and tangible benefits that will accelerate their adoption of new software. It can also lead to errors and inefficiencies, further diminishing adoption.

Creating and Measuring Your Product Adoption Strategy

You know the challenges to getting users to adopt your product. Now let’s look at creating a product adoption strategy to overcome those challenges and how to measure the success or failure of your work.

Define Target Users and Segments

Defining target users and segments is crucial for a software company to effectively create a product adoption strategy. Target users refer to the individuals or groups most likely to benefit from and use the software. The target users for tax software would be taxpayers. Segments, however, involve categorizing these users into distinct groups based on shared characteristics, needs, and behaviors. To use that same example, a segment would include novice taxpayers and experienced taxpayers.
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To define target users, a software company should rely on thorough market research to identify potential customers' demographics, psychographics, and pain points. This involves understanding age, gender, occupation, interests, challenges, and preferences. From this research, your company will create detailed user personas representing archetypal individuals within the target audience.
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Segments are formed by clustering users with similar attributes or needs together. For instance, your software company might segment users based on company size, industry, geographic location, or specific use cases.
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These segments help the company develop tailored marketing messages, features, and pricing plans to resonate with each group's unique requirements. By accurately defining target users and segments, a software company can align its product development, marketing efforts, and customer support to effectively address the needs of different user groups, leading to higher adoption rates and customer satisfaction. Regular refinement of these definitions based on feedback and market changes is essential for sustained success.

Setting Clear Product Adoption Goals

Defining your target users and segments establishes who you want to adopt your software, now it’s time to create measurable goals to determine the success of your strategies. 

Be considerate and measured when setting your goals. While it’s easy to throw goals on a whiteboard that are double of the year before, you want to ensure your goals are realistic based on your market and your resources. 

Product Adoption Metrics

Below is a sample of product adoption metrics and KPIs your software company can track to measure the success of your campaigns. 

• User Acquisition: This metric focuses on attracting a certain number of new users to the software within a specific timeframe. It might involve metrics like the number of downloads, sign-ups, or initial activations.
• Activation Rate: The activation rate measures the percentage of users who complete the initial setup or onboarding process and start actively using the software. A higher activation rate indicates that users are finding value in the product.
• User Engagement: Software companies often aim to increase user engagement by measuring metrics such as daily or monthly active users, time spent using the software, and the frequency of interactions.
• Feature Adoption: Companies might set goals related to the adoption of specific features within their software. This can help drive deeper engagement and showcase the software's capabilities.

[Take a deeper dive by learning 4 Product Adoption Metrics to Measure Success]

Mapping and Optimizing the Customer Journey

Mapping the customer journey is crucial for product adoption because it provides software companies with valuable insights into the user's experience and interactions with the product. 

This understanding helps optimize the user's path from initial awareness to becoming a loyal and engaged customer. Here's why mapping the customer journey is important for product adoption:

Identifying Pain Points and Opportunities

Product adoption starts with awareness, which, if you recall, is one of the most challenging roadblocks software companies face with product adoption. But once your users are aware of your product and begin using it, it’s time for you to avoid the precise areas where your target users and segments struggle. Mapping the customer journey helps pinpoint the s where users might encounter challenges or frustrations.
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By identifying pain points, software companies can address these issues and create a smoother, more seamless experience, reducing barriers to adoption.

Tailoring User Onboarding

A well-defined customer journey allows software companies to design a user-friendly onboarding process. By understanding how users progress from initial sign-up to active users, companies can provide guidance and resources at each step, ensuring users get value from the product quickly.

Enhancing User Engagement

Mapping the customer journey helps identify opportunities to engage users more effectively. By understanding when and how users interact with the software, companies can design strategies to keep users engaged and coming back for more, which is essential for successful adoption.

Personalization and Segmentation

Customer journey mapping allows companies to segment their user base and personalize the user experience based on different user personas and behaviors. This enables tailored communication, features, and recommendations that resonate with specific user needs and preferences.

Optimizing Touchpoints

Understanding the customer’s journey in your software helps you identify touchpoints where users might drop off or disengage. Once identified, your engineering teams can work to optimize these touchpoints, such as improving user interfaces, providing better support, or offering incentives; companies can keep users progressing through the journey and prevent abandonment.

Building Trust and Loyalty

A well-mapped customer journey helps build trust and loyalty by establishing a positive relationship between the user and the software company. When users have a consistent and valuable experience, they are more likely to trust the product and become loyal customers.

Measuring Progress and Success

Remember those product adoption metrics and KPIs from above? Use them to create a framework for measuring key adoption metrics at each stage. This enables you to track progress, identify trends, and make data-driven decisions to improve adoption rates.

Continuous Improvement

The insights gained from mapping the customer journey allow for ongoing iteration and enhancement of the product and adoption strategies. As user behaviors and needs evolve, software companies can adapt their approach to ensure sustained adoption success.

Creating User Onboarding and Training that Boosts Product Adoption

You know what product adoption is. You know what the challenges are. And you know how to build a strategy that will track and measure how well your software is being adopted. So, you’re all done, right? Let the users and money flow to the ceiling.
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Not quite.
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Something you’ve noticed coming up again and again here is user onboarding and training. It’s hard to say that there is a singular element of product adoption that trumps all others, but if forced to choose one, user onboarding would be the winner.
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Learn how leveraging user onboarding and training boosts product adoption.

The Modern Buyer/Learner has Changed

Everything about the way that we learn about products and ultimately decide which products to purchase has changed. Those little, powerfully addicting devices in all of our hands have dramatically altered the way to approach purchasing. 

As you’re building out a product adoption strategy, keeping the modern software buyer in mind is critical. 

The modern buyer seeks intuitive and user-friendly software solutions, avoiding the need to invest time in learning new systems. Before making a decision, buyers want to feel confident that both themselves and their team members can swiftly and smoothly initiate utilization of your product.

That confidence will come from the assurance that your company will partner with them on their onboarding process.

Create Product Education and Training that is Interactive 

Interactive education is critical for onboarding users on a new software. The droning videos and  black and white booklets of yesteryear simply will no longer get it done. If users find your training and onboarding material to be dry or cumbersome to learn, they simply won’t learn it. Which means they won’t adopt your software. Which will make retention nearly impossible. 

Instead, find a way to make the training and onboarding user-led, rather than instructor-led.

Here are some examples of interactive product training and onboarding. 

Simulations and Interactive Walkthroughs

Create guided simulations that allow users to interact with the software in a controlled environment. Walk them through real-life scenarios, demonstrating how to perform tasks and use features effectively.

Hands-on Learning

Provide users with hands-on exercises that encourage them to actively use the software. This practical approach helps reinforce learning and boosts confidence.

Within Instruqt, users can complete unique tasks and challenges within your actual environment. This interactive approach empowers them to learn while doing, as opposed to simply watching someone do the task they are meant to learn. 

See this for yourself.

Gamification Elements

Introduce gamified elements like badges, points, and leaderboards. Users can earn rewards for completing modules, encouraging them to engage with the training materials.

You can do this in Instruqt by creating a learning academy.

Virtual Labs and Sandboxes

Set up virtual environments where users can experiment with the software freely without the fear of making mistakes in the actual system. 

Learn how to create a hot-start sandbox within Instruqt. 

Collaborative Learning

Development work can be lonely. But that does not mean training and onboarding should be. Foster collaboration among learners through discussion forums, group projects, or shared problem-solving exercises. 

Peer interaction enhances understanding and knowledge sharing.

‍Interactive Videos

Create videos with interactive elements, such as clickable hotspots, annotations, and branching paths. This allows users to explore specific features or topics within the video content.

‍Variety is Key

While you may be able to segment your users into groups based on characteristics, they are all unique. Each may have a different preference when it comes to learning your software.

To ensure you maximize product adoption, incorporate a few of the above forms of interactive education into your training and onboarding plan. 

How Instruqt Increases Product Adoption

How does Instruqt help software companies increase their product adoption? In a great many ways! But if we had to distill it down to one, it would be through our unparalleled ability to maximize how users learn and interact with your product.

We'd love to keep typing away on the many ways Instruqt can solve your product adoption challenges, but you've read over 3,000 words already! That's more than enough. Instead, sit back and enjoy this short and succinct video and after that take Instruqt for a spin by taking our test drive.

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