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9 Customer Adoption Metrics You Must Track

Saturday, March 02, 2024

9 Customer Adoption Metrics You Must Track

When a customer buys your product or signs up for your service, that's great – but it's not enough. You also need them to actually use and enjoy what you offer.

​This is what we call customer adoption: how often and how fully a customer puts your product to work after purchase.

​Tracking customer adoption metrics is key for companies who really want to understand their buyers and create great experiences. Are most customers utilizing all available features? Do some seem confused or unhappy with certain aspects? Solid metrics give the insights you need to tailor improvements and support exactly where required.

I see far too many businesses obsessed with marketing and acquisition, practically ignoring whether their precious customers continue loving the product afterward – and I don’t blame them. It’s shockingly easy to overlook.

What I need everyone reading this to understand is that satisfied, loyal users are the lifeblood of any sustainable business. Monitoring a few smart metrics around adoption can help ensure you delight rather than disappoint.

In this post, I'll walk through 9 must-track customer adoption metrics that give amazingly helpful visibility into user behaviors and sentiment. From feature usage rates to Net Promoter Scores, properly tracking these key performance indicators over time offers a goldmine of data to work with. You can perfectly tune your customer education, user experience, and product development roadmap – the list goes on!

So buckle up for a breakdown of metrics that pave the road to customer-centric products people simply can't live without. Using these 8 adoption metrics to maximum advantage will have buyers high-fiving your business for years to come.

Business Analytics

#1: New Customer Conversion Rate

Let's start with one of the most crucial customer adoption metrics: the new customer conversion rate. This handy metric shows what percentage of people exploring your product through a free trial or demo end up becoming paying customers. In other words, how good are you at turning fresh signups into happy buyers?

A high new customer conversion rate means your introductory product experiences like free trials nail their goal of showcasing your solution's awesomeness. When trials clearly communicate the immediate value new users gain, conversion rates can skyrocket. On the flip side, a confusing early user journey that buries perks under too many steps will certainly suppress conversions.

Calculating this metric helps you pinpoint how captivating and smooth your customer onboarding truly is. First, take the number of trial users who go on to purchase over a period of time. Then divide it by the total trial signups you saw. Multiply that by 100 to get a percentage, and voila – you have your magic new customer conversion number.

As a benchmark, smart companies aim for 25-50% on this metric. Anything under 20% signals your intro journeys fail to create lightbulb moments. Time for some trial and onboarding process rework! Stay above that 25% threshold, and you're golden in setting new visitors on a path to satisfied customer adoption in no time.

#2: Retention Rate

Retention Rate

Now we get to the meat and potatoes – the retention rate. This crucial customer adoption metric looks at what percentage of your customers continue using your product month-to-month rather than canceling. High churn is truly terrible for business, so an epic retention rate demonstrates happy, engaged users.

Calculating the monthly retention rate is simple math. Take the number of customers who have stuck around at the end of a month and divide it by everyone who was active at the beginning of the month. Convert that number to a percentage, and now you have a clear snapshot of how well you retain buyers over time.

As an impressive goal, aim for over 92% monthly retention once your product and onboarding processes mature. A rate lower than 80% is a huge red flag though – at that point you may think it appropriate to call in the customer satisfaction cavalry.

Identifying why users cancel mid-adoption is the only way to patch the leaks in your onboarding flow or underwhelming product experiences.

Digging into account usage behaviors, surveying dissatisfied customers who churned recently, and reviewing common feature adoption patterns can uncover what to improve. Use these insights to better engage each type of user with educational content tailored to their needs.

#3: Account Activity

Account activity gives you rare insights into how frequently customers interact with your product. Do they login daily? Weekly? Or stare blankly at their inactive account not sure how to proceed? Tracking activity levels across your user base reveals crucial engagement and adoption patterns.

Using handy analytics tools like Mixpanel, you can pick key actions like logins, feature clicks, and page visits to monitor over time. Define these actions as custom events within your product, then view trends on how customers trigger these events.

Segment users into activity level buckets like high, medium and low engagement. Pay close attention if a chunk of folks fall below your threshold for "moderate" use over weekly or monthly periods. Low activity signals your onboarding and educational resources come up short helping users unlock full value.

Essentially see if you can answer the question: "why don't moderate-to-low activity users tap into more features or login more often?" Surveys, user testing, and interviews help uncover pain points you can directly address through better in-app messaging or refreshed tutorials. Revise wherever your product falls short meeting promises so that snazzy features don't sit barely used.

Boosting account activity through targeted user experience improvements leads right back to higher adoption and customer retention over time. And supporting more fulfilling user journeys is what it's all about.

#4: Feature Adoption Rates

Now this metric gives you gold – which product features actually appeal to users versus which ones flop? Monitoring feature adoption rates shows exactly how customers interact with specific components you launch.

To calculate adoption rates, take any single feature and divide total users who clicked on or utilized it by your overall user base over a period of time. You’ll end up with the percentage of people who actually tap into each offering.

Getting extra insightful, you can break down adoption by customer segments or personas too. Do SMB and enterprise customers activate different feature sets? Identifying adoption preferences across your user base allows smart tailoring.

Carefully tracking adoption gives you an awesome roadmap of where to guide development next.

Low engagement with a feature indicates it somehow misses the mark solving user needs or proving value. Consider sprucing it up through better positioning and customer education - or simply cull consistently underused capabilities so your product doesn't feel overwhelming.

Lean into features that customers clearly rely on based on standout adoption rates. Find adjacent functionalities that complement popular pieces to knock future releases out of the park! Using adoption intelligence, you can craft experiences that perfectly align with exactly how customers want to leverage your product.

#5: Average Session Length

Average Session Length

Average session length is an interesting metric that reveals how long customers actively use your product each visit. Short sessions might mean users don't find what they need efficiently. Extended sessions are a great sign they discover ongoing value with each login.

Calculate this by adding up all session durations over a month or quarter, then divide by the total number of sessions opened. For example, 5,000 total hours of usage divided by 10,000 sessions means a 30 minute average length.

Comparing your average benchmark to industry standards helps gauge how engaging sessions truly feel for users. Certain products like games aim for 20+ minutes per session as the sweet spot while business tools see 60+ minutes.

Additionally, break average session length down by customer persona. Support agents may dip in and out of knowledge base software quickly, while social media managers could benefit from lengthier analytic dashboard sessions. Relevance varies.

If multiple personas consistently rate below your target average session time, take that as a signal to boost stickiness. Evaluate whether more intuitive navigation, better feature explanations at launch, or additional alerts on new data to analyze could lengthen session durations across the board.

#6: Churn Rate Across Cohorts

Here's another interesting one – compare churn rates between customer cohorts. A "cohort" refers to groups of users that signed up during specific time periods, like each month in 2020. By analyzing their churn trends over time, you spot how behavior shifts across seasons or after major releases.

Visualizing each monthly cohort on a graph illuminates patterns. Map subscription length along the X-axis and plot retained customers' percentage on the Y-axis. Do some cohorts retain higher percentages of users over long periods, while others plummet after a few months?

As an example, cohorts right before and after a major product redesign launch may have starkly different retention curves. This quantifies whether your shiny new features had positive, negative, or neutral impact on long-term user satisfaction!

Additionally, seasonal cohorts often follow unique curves that stand apart from the usual churn rate. Holiday sign ups might stick around longer thanks to winter discounts or free trial extensions. When comparing cohorts, inconsistencies stand out against the baseline averages - now you can research why anomalies occur at those isolated points in time.

By splitting analysis across cohorts, you dodge issues that arise when blending vastly different customer groups. Ensure you have enough cohort-specific educational resources to account for seasonal needs, properly frame new releases, and support niche use cases that arise.

#7: Customer Health Score

While overall product adoption metrics are invaluable, you need the full picture. Let's drill down to the individual customer level with a nifty model called customer health scores. This methodology tags users with a composite "health" rating based on their personal usage and engagement habits.

First, handpick metrics like login frequency, feature adoption rates, and activity levels that best indicate an active, satisfied user for your product. Track these for all customers over set periods.

Next, define a framework to score individual users on each metric, setting thresholds aligned to product best practices. Sum all scores to calculate a total 0-100 health rating per customer. Segment users as healthy, at risk, or already churned based on their points.

For example, Nancy logs into the app 6 days a week, utilizes 8+ core features, and registered 300 sessions last month. Her score comes to 93 points – rated a "Healthy" user. But Tom hasn't signed in for 3 weeks, sticks to only 2 basic features, and had just 5 sessions last quarter. His 32 point score puts Tom into your "At Risk" segment.

With health scores established, you can target customers slipping into at-risk territory with personalized promotions and training content before they cancel completely. Or analyze why certain personas have lower average health scores, then strengthen onboarding touchpoints to better set those users up for long-term adoption success.

Monitoring individual health combines both broad product analytics and the ability to support discrete users. It’s a personal touch that most customers love to see.

#8: Net Promoter Score (NPS)

Net Promoter Score (NPS)

Last but definitely not least, we have Net Promoter Score - the classic metric gauging customer loyalty and satisfaction. NPS measures how likely users are to rave about your product to colleagues or peers on a 0-10 scale.

​Fire off a simple NPS survey to customers asking: "How likely are you to recommend us to other industry folks?" Group scores of 9-10 as loyal "promoters", 7-8 as "passives", and 0-6 as unsatisfied "detractors". Subtract your % of detractors from % promoters to get a final NPS.

Scores over 50 indicate excellent experiences breeding word-of-mouth referrals and customer retention. But an NPS below zero means unhappy users outnumber promoters – a major red flag! Low NPS suggests poor touchpoints degrading trust and adoption over time.

Segmenting NPS surveys by customer persona or user activity level provides deeper analysis. Do your enterprise customers score way higher than SMB users? Are active longtime subscribers bigger fans than recent sign ups still learning workflows?

Spotlighting personas with exceptionally high or low NPS helps you double down on what works while improving weak spots. For example, new customers may need expanded onboarding education to boost confidence and in-app familiarity over time.

#9: Customer Effort Score

Along with Net Promoter Score, another useful metric is Customer Effort Score (CES), gauging how much effort your product takes for customers to use and find solutions.

CES surveys simply ask "How easy was it to resolve your issue with our product?" on a scale like 1-Difficult to 5-Very Easy. Low scores signal clunky experiences requiring too many steps or confusing workflows.

Akin to NPS, tally those responding with 4-5 as promoters, 3 as passive, and 1-2 as detractors. Subtract percentage of detractors from promoters to get your overall CES.

Scores above 50 are positive, suggesting the product takes reasonable effort to harness value. But consistent scores below 50 indicate unnecessary complexity degrading adoption. Streamline flows and educational touchpoints with an eye toward reducing customer effort.

As always, break down CES by persona and feature area. If SMB marketing users rate ease of use far lower than enterprise product managers, you likely need persona-specific tutorials guiding common use cases to simplify their journey.

Tracking customer effort alongside satisfaction paints a full picture. Experiences may delight users but still need simplification to drive long-term retention and prevent churn. Lean into strong NPS combined with high CES for maximum adoption potential.

Last Remarks

Developing a great product is just the first step to sustainable business success. Cultivating passionate, engaged customers who renew subscriptions and promote your solution ultimately drives revenue growth and reduces customer acquisition costs over time.

Tracking customer adoption through metrics around account activity, feature usage, health scoring, and sentiment provides the data needed to create delightful user experiences. Listen to adoption analytics, build processes to act on insights uncovered, and constantly evolve to exceed customer expectations.

A relentless focus on helping more users achieve desired outcomes leads companies to build trusted brands with enthusiastic fans. Savvy businesses realize adoption metrics offer the compass guiding strategic decisions at each step of the customer journey.

Use these 9 customer adoption metrics as guideposts to gauge progress toward developing truly customer-centric products that sell themselves. Tune onboarding checklists, educational touchpoints, feature releases, and support channels to align with real user behaviors.

Adoption tracking provides the vision you need to walk in your customers’ shoes. While acquiring new users has its place, retaining happy customers should take the spotlight on center stage.

Carefully listening to signals from in-product behaviors separates great companies from the rest. They embed users in the product team's mindset and roadmap prioritization. Adoption metrics lead to improvements and innovations that directly map to making customers successful and satisfied.

So take the time to implement tracking on these 9 adoption metrics for a transparent view into the customer experience. Whether aiming to boost account activity, raise NPS, or improve feature stickiness, let data guide your next best actions in creating smile-worthy products.

Sign up for my No B.S. Newsletter packed with insider tips on tracking key metrics, designing sticky user experiences, and guiding data-backed product development. This no-nonsense newsletter cuts through the noise to spotlight battle-tested best practices for connecting with customers at each touchpoint.

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