SaaS: Quick Guide to the Product Adoption Curve! (2023)

SaaS: Quick Guide to the Product Adoption Curve! (1)

Know your audience. This has been a nugget of wisdom passed down for decades now, for a good reason. If you do not have an intimate understanding of who your ideal customer is, you are destined to fail. However, knowing your audience won’t be enough. Youhave toconvince them that your product has value to increase your product adoption. You need to understand the product adoption curve.

In this quick guide, we will explain what you need to know about product adoption and the production adoption curve. Understanding these aspects of SaaS marketing will propel your growth to new heights.

Product Adoption Definition

Before we get into the product adoption curve itself, you need to get familiar with the product adoption definition.

It involves helping the users of your product or service to see the value they have, while habitually using it. There are four stages to product adoption. They are:

  • Awareness
  • Interest
  • Evaluation
  • Conversion

You may be overly focused on metrics like how many users have signed up to use your product or how many daily users it has. When looked at individually, these do not give a clear understanding of whether people have success with using your product in their daily lives. You are not sure if your product has become an indispensable tool for them.

Genuine product adoption occurs when there is so much value in your product that it is not worth it for users to drop it and move over to another one. This is part of why you need to have both incoming users in mind, as well as existing ones.This is whyadding new features and making enhancements to your product should always be on your mind.

Withover 200 millionSaaS cloud workloads installed in 2018, you have a tremendous amount of competition, requiring you to keep innovating to retain and attract customers. SaaS is a $116 billion market, so you cannot afford to slack on this.

When you understand the product adoption definition clearly, you know your audience clearly. This will ensure your product lifecycle is smooth.

SaaS: Quick Guide to the Product Adoption Curve! (2)

(Video) The Product Adoption Curve Explained

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    What Is the Product AdoptionCurve?

    Now that you understand what product adoption means, we will shift over to the product adoption curve. Essentially, this is a model that shows you who is buying your products and when they are doing so. This model helps you take the data you have regarding product adoption and pan out to see the big picture. The product adoption curve looks at the lifecycle of a product and identifies what is going on at different points within it.

    The product adoption curve can be split up into five phases. These are:

    • Innovators
    • EarlyAdoptors
    • Early Majority
    • Late Majority
    • Laggards

    The specific amount of time that each phase lasts varies, so we will look at the phases, or stages, themselves.

    1. Innovators

    The very first people to jump into using a product are the innovators. These people are a special group of users who are head over heels when it comes to SaaS. They are always looking for the freshest and latest in SaaS development.

    Since the product adoption curve is a bell curve, it means innovators comprise a small percentage of the total uses of a product over the lifecycle. This is to be expected and completely normal. When you are seeing just a few sales trickling in right after launching, you don’t have to worry. It’s typical for new products to sales hoveringaround 2.5%when a product is in the innovator stage.

    2. Early Adopters

    Soon enough, you will see your sales start to rise steadily. Your conversion rate will be increasing continuously. This is when you know you are in the early adopter phase. These are users who get ahead of the curve like innovators. They are looking to experiment with a product and are like explorers navigating the SaaS world.

    They may haveactually alreadyknown about the product when it was in the innovator stage. However, they may have purposely waited to jump in on it. This is one of the ways they differ from innovators, who will jump head-first into a product. Early adopters want to see some data on the efficacy of a product before they get on board. The usual sales percentage for this phase is 13.5%.

    3. Early Majority

    When a product enters the early majority phase, it has gained traction and is seeing plenty of sales. People have now seen early adopters successfully use a product and jump in on the action. The product now is seen as having proven its value, so it’s a safe investment. This propels sales through the roof. Sales are around 34% in this phase.

    (Video) How To Increase Activation & Adoption Of Your SaaS Product

    Towards the end of the early majority stage, the top of the bell curve is reached. This means the product is peaking. What comes next begins the decline of the product adoption curve.

    4. Late Majority

    At this stage, a product has been out and used for a considerable amount of time. Its use is widespread, yet there were still people out there who were not convinced that it was worth using. These people make up the late majority phase and beyond. The product adoption rate for this phase is the same as the one before it, which is around 34%.

    5. Laggards

    This final stage of the product adoption curve comes after all the buzz surrounding a product has turned practically silent. Laggards are late to the party, sometimes by several years. The people who get in this late are usually people who are highly skeptical of new products. Also, they may have just been entirely unaware that it existed until now.

    There is a sizable portion of sales occurring within this stage. With 16% of product adoption happening here, it can be surprising that there are more laggards than innovators.

    There is a sizable portion of sales occurring within this stage. With 16% of product adoption happening here, it can be surprising that there are more laggards than innovators.

    Product Adoption Life Cycle

    Product adoption cycle is the flow or series of events in which users adopt or consume your product. With a product adoption curve, you will have deeper understand on how you can plan product marketing activities. It begins with the launch of your product and ends when you stop. The types of adopters are mentioned above. These are classifications of people based on their adaptability to new products. With the product adoption life cycle, it is important to keep the product life cycle in mind. Mapping the product adoption curve with the product life cycle will give you the best results. Every stage of the product life cycle is divided based on different characteristics. These are-

    • Introduction

    In this stage, the product needs to penetrate the market. The choices the company needs to make include- deep penetration or skim through the market? Penetration means increased consumer adoption, fixing the pricing, and profits as well.

    • Growth

    The second stage of product adoption is where the ball moves to customer satisfaction. Here, the marketing and efforts can be aligned to creating growth. Driving loyalty should be the focus for any company in this stage of product life cycle.

    • Maturity

    This stage of product lifecycle depends on innovation, strategy, maintenance, and defence. Depending on the nature of company policies, customer demands, product seepage, and more, the brand will stay.

    • Decline

    In this stage of product lifecycle, companies need to make decisions that will focus on growth and staying relevant. Either there needs to be an overhaul or a calculated exit.

    Once the product lifecycle is understood, the next step is to understand the customer adoption process or the product adoption process.

    Product Adoption Process

    Customers in any sphere go through 5 stages while adopting a product. These are-

    1. Product Awareness
    2. Product interest
    3. Evaluation of the product
    4. Trial
    5. Product Adoption

    It is a natural cycle that all customers go through while become loyal users.

    (Video) 6 SaaS Product Onboarding Mistakes Made by 1000 Companies [ Detailed Research of 1000+ hours ]

    Product Awareness

    In this stage, the customer is aware of the product. There is less interest and he/she seeks more information about it. This leads to seeking for information. The bearers of this stage include advertising, marketing, publicity, word of mouth and more.

    Product Interest

    The next stage is when the customer needs information about the product. This is a crucial stage as customers make a big chunk of decision here. In this interest stage, they decide whether to get more information or not.

    Evaluation of the product

    In this stage, customers can try the product in a sample scale to see if they like it and enjoy using it. The motive is to establish a connection to evaluate the product. They can compare it with competitors to understand its potential.


    In this stage, the customer tries the product to see if it works. Does it fit what they are looking for? Does it solve a problem? The usefulness of the product is determined in this stage. The key here is if the innovation works to satisfy the requirements of the customer.


    The customer chooses the product. The customer makes the product a regular one and a sale is made. This may not involve loyalty as yet. It can be a direct association to the product.

    Product Adoption Marketing

    Adoption marketing or adoption curve marketing is marketing involving the product adoption curve. The most important way to make a customer a product adopter is through retention. Here are some techniques that will help companies ace their product adoption.

    • Create product tips
    • Improve visual walk throughs
    • Create charts and demonstrate the value of features
    • Re-engage through email marketing
    • Offer easy onboarding
    • Segment customers based on demographics, type and more
    • Ace content marketing
    • Create compelling social media
    • Target customer journey stages with CTA’s, announcements and more
    • Use informative webinars to inform users and give them product information

    What is Chasm?

    Chasm in the product adoption curve lifecycle means a point where things are at a stand still. It is at a point where it seems for the company that there is no future early in its life.

    SaaS: Quick Guide to the Product Adoption Curve! (3)

    In simple terms, chasm is the growth that has stopped your company from experiencing its true potential in terms of product adoption.

    How to overcome the Chasm?

    Crossing the chasm is necessary for any SaaS company to scale. It is one of the biggest challenges companies will face in the beginning. Here are some ways companies can overcome chasm.

    • Focus on the importance of the product
    • Appeal to the need for it in the future
    • Improve or revamp the messaging
    • Create competitor comparisons
    • Offer compelling case studies and showcase them
    • Promote on social media
    • Add relevant testimonials
    • Get listed on third-party sited
    • Achieve inclusion in trustworthy third party reports
    • Improve product and redesign them accordingly
    • Diversify into new markets

    Product Adoption Curve Metrics

    To understand the new product adoption bell curve, it is important to use some metrics. Here are three metrics that will help you deal with the product adoption situation.

    Adoption Rate

    Adoption rate is the percentage of new users against all users. This can be measured for a particular product, feature, or service.

    Time-to-first-key action

    This metric is the time it takes for a new customer to use an existing feature. Conversely, it is also the average time taken for an existing customer to try a new feature.

    (Video) Technology Adoption Lifecycle - Explaining the Saas Bell Curve

    Core Action percentage

    This is the percentage of users who have utilised or understood or used a core feature in a product for the first time. This is when the Aha! Moment is realised.45

    Wrapping Up

    Now that you have a better understanding of the product adoption curve, you can know what to expect throughout the lifecycle of your product. When you know this, you know your customers, helping you to serve them better. Within every phase of the curve, you need to get users excited to use your product. This can help propel your product success beyond what you would have expected. Product adoption is easily the most important thing for product teams. Analysing product adoption groups and forming product adoption strategies accordingly will help improve product success.

    You might also like:

    • How to create a product adoption strategy – Create a product adoption strategy or user adoption strategy with the best techniques mentioned in the blog.
    • To understand how SmartKarrot can helps SaaS companies keep and grow loyal customers, Request a Demo.

    SaaS: Quick Guide to the Product Adoption Curve! (4)

    WRITTEN BYRakhin V

    Rakhin has over 10 years of experience driving business development and client services. In his prior roles, he stayed close to customers to understand their requirements and help them achieve their business goals. He is passionate about customer success.

    Published May 26, 2020, Updated February 26, 2021

    (Video) Five Stage Framework To Accelerate Product Adoption

    • Customer Success,
    • product adoption,
    • Product Adoption Curve,
    • product success,
    • SaaS


    What are the stages of the product adoption curve? ›

    The five stages of the Product Adoption Curve are: innovators, early adopters, early majority, late majority, and laggards, with a chasm between the early adopters and early majority.

    How to drive SaaS product adoption? ›

    6 user adoption strategies for B2B SaaS businesses
    1. Identify your activation criteria. ...
    2. Get to the heart of why customers use your product. ...
    3. Offer a trial period. ...
    4. Optimize your customer onboarding process. ...
    5. Analyze feature and product usage. ...
    6. Market to your existing customers (not just prospects)
    Jan 27, 2023

    What is product adoption in SaaS? ›

    Product adoption is the process that customers follow as they discover, purchase and begin using a new product or service. While companies over all industries invest a lot into marketing and sales, SaaS providers need to place equal emphasis on what happens when a lead turns into a paying customer.

    What are the five 5 different customer segments in a chasm framework? ›

    The five customer segments are — Innovators, Early Adopters, Early Majority, Late Majority, and Laggards. The product has to evolve to meet the needs of every target segment as they all differ from each other.

    What is the 7 stage product life cycle? ›

    Product management life cycle in seven main stages: Idea generation and management, research and analytics, planning, prototyping, validation, delivery, and finally, launch. An effective product management process will help your business goals get achieved much sooner.

    What is the 5 stage model of adoption process? ›

    There are six product adoption stages—awareness, interest, evaluation, trial, activation, and adoption. Product adoption isn't always a linear process—users can jump between stages. There are also five adopter profiles—innovators, early adopters, early majority, late majority, and laggards.

    What is a good user adoption rate for SaaS? ›

    Product adoption rate benchmarks in SaaS

    The median activation rate is 17%, while the 90th percentile rate is 65%. User growth: It is the month-over-month growth in the number of weekly active users. The median growth rate is 4%, while the 90th percentile rate is 72%.

    What are the four stages of product adoption? ›

    Product adoption describes the process of users becoming aware of a product, understanding its value, and beginning to use it. The process is usually broken down into four discrete stages: awareness, interest, evaluation and conversion.

    How is SaaS adoption measured? ›

    A customer or user adoption rate is the number of users who've adopted your product divided by the total number of users/customers. For instance, if you have a new feature and 350 of your existing 1,000 customers adopt it, you'll have a 35% user adoption rate.

    What are the 5 A's of a customer path? ›

    The 5A customer journey reflects the connectivity among customers and is described as a process of 1) Aware, 2) Appeal, 3) Ask, 4) Act, and 5) Advocate.

    What are the 4 pillars of segmentation? ›

    Demographic, psychographic, geographic, and behavioral are the four pillars of market segmentation, but consider using these four extra types to enhance your marketing efforts.

    What are the 6 segmentation criteria? ›

    There are 6 types of user segmentation that can help you determine your target. They are behavioral segmentation, psychographic, demographic, geographic, occasional, and cultural.

    How do I increase feature adoption in SaaS? ›

    How to Increase Feature Adoption
    1. Build features that solve user problems. ...
    2. Create a robust, omnichannel new feature announcement strategy. ...
    3. Use in-app guidance to provide contextual feature training to users. ...
    4. Collect and analyze user behavior data to understand how new features are being used and adopted.
    Feb 7, 2023

    What are the 5 elements of product life cycle? ›

    The product life cycle is the progression of a product through five distinct stages: development, introduction, growth, maturity and decline. The concept was developed by German economist Theodore Levitt, who published his Product Life Cycle model in the Harvard Business Review in 1965. We still use this model today.

    What are the 6 product life cycle? ›

    This cycle can be broken up into different stages, including—development, introduction, growth, maturity, saturation, and decline.

    What are the 7 core concepts of adoption? ›

    The classic "Seven Core Issues in Adoption," published in the early 1980s, outlined the seven lifelong issues experienced by all members of the adoption triad: loss, rejection, guilt and shame, grief, identity, intimacy, and mastery/control.

    What are the 5 adopter categories? ›

    What are the 5 adopter categories?
    • Innovators. Innovators are customers who are most likely to buy new products. ...
    • Early adopters. Early adopters are customers who can influence whether others explore a company's new products. ...
    • Early majority. ...
    • Late majority. ...
    • Laggards.
    Jun 24, 2022

    What are the three pathways to adoption? ›

    In the U.S., there are three main pathways to adoption: domestic adoption, international adoption, and foster care adoption.

    What is a good rule of 40 SaaS? ›

    The Rule of 40 – popularized by Brad Feld – states that for healthy SaaS companies, if the growth rate were to be added to their profit margin, the combined value should typically exceed 40%.

    What is a good SaaS quick ratio? ›

    What is a good SaaS Quick Ratio benchmark? Early stage companies with a ratio of 4 or higher are considered healthy. This ratio becomes more difficult to maintain with growth. At a SaaS Quick Ratio of 2, you are losing half of your new Monthly Recurring Revenue (MRR) every month.

    How do you quantify product adoption? ›

    12 product adoption metrics you should be measuring
    1. Conversion rate. ...
    2. Adoption rate. ...
    3. Time to value (time to adopt) ...
    4. Activation rate. ...
    5. Usage frequency. ...
    6. Churn rate. ...
    7. Customer Lifetime Value (CLTV) ...
    8. Average session duration.

    What are the 4 forces that influence product adoption? ›

    4 forces influencing product adoption
    • Highlight the imperfections of your potential customer's current product.
    • Show how well your product solves their issues.
    • Decrease the fear of change and explain how they can easily switch to your solution.
    • Decrease the potential customer's attachment to their current product.
    Mar 29, 2021

    What are consumers 5 steps of adopting a new product? ›

    Stages in the Adoption Process
    • Stage 1: Product Awareness. ...
    • Stage 2: Product Interest. ...
    • Stage 3: Product Evaluation. ...
    • Stage 4: Product Trial. ...
    • Stage 5: Product Adoption.
    Jan 25, 2023

    What are the five stages before adopting a product? ›

    The 5 stages are: product awareness, product interest, product evaluation, product trial, and product adoption.

    What is the rule of thumb for SaaS valuation? ›

    The general rule of thumb is that an LTV/CAC ratio of 3 is ideal for most SaaS businesses. This will allow for enough cushion to account for a dip in the LTV or an increase in the CAC and still be able to generate a healthy gross profit margin.

    What are product adoption metrics? ›

    Product adoption metrics help you measure and track how successful your product is at meeting your users' needs and helping them achieve their goals. These metrics also show you if your onboarding process drives users to adopt, and whether they're realizing the full value of your product.

    What are SaaS growth metrics? ›

    SaaS Metrics Definition

    SaaS (software-as-a-service) metrics are benchmarks that companies measure in order to establish steady growth. Like traditional KPIs, SaaS metrics help businesses gauge the success of their organization and effectively prepare themselves for a stable economic future.

    What are the 4 E's of customer experience? ›

    The authors theorized the fundamental elements of customer experiences as 4Es: Educational, Esthetic, Escapist, and Entertainment experiences.

    What is the 5 C's model? ›

    What is the 5C Analysis? 5C Analysis is a marketing framework to analyze the environment in which a company operates. It can provide insight into the key drivers of success, as well as the risk exposure to various environmental factors. The 5Cs are Company, Collaborators, Customers, Competitors, and Context.

    What is the 5 C's approach? ›

    The 5 C's stand for Company, Collaborators, Customers, Competitors, and Climate. These five categories help perform situational analysis in almost any situation, while also remaining straightforward, simple, and to the point.

    What are the 4 C's for successful segmentation? ›

    The 4 C's of Marketing are Customer, Cost, Convenience, and Communication. These 4 C's determine whether a company is likely to succeed or fail in the long run.

    What are the 5 basic segmentation? ›

    Five ways to segment markets include demographic, psychographic, behavioral, geographic, and firmographic segmentation.

    What are the four 4 major segmentation variables? ›

    Segmentation variables refer to the factors marketers use to categorize their audience into different groups. The 4 main types of segmentation variables include demographic, geographic, psychographic, and behavioral traits.

    What are the 8 type of market segmentation? ›

    Read this article to learn about the eight important bases for segmentation of market, i.e., (1) Geographic Segmentation, (2) Demographic Segment, (3) Economic Segmentation, (4) Psychological/Psychographic Segmentation, (5) Sociocultural Segmentation, (6) Use Related Segmentation, (7) Benefits Segmentation, and (8) ...

    What are the 4 generic target marketing strategies? ›

    There are typically 4 different types of market targeting strategy:
    • Mass marketing (undifferentiated marketing)
    • Segmented marketing (differentiated marketing)
    • Concentrated marketing (niche marketing)
    • Micromarketing.

    What are the 7 bases of market segmentation explain? ›

    The basis of the segmentation is age, sex, education, income, occupation, marital status, family size, family life cycle, religion, nationality and social class. All these variables are either used as a single factor or in combination to segment the market.

    What are the 4 stages of product life cycle curve? ›

    The 4 stages of the product life cycle are introduction, growth, maturity, and decline.

    What are the 5 stages in the diffusion of innovation curve? ›

    Awareness, persuasion, decision, implementation, and continuation. These are the five stages of adoption according to diffusion of innovation theory.

    What is the 5 stage product life cycle? ›

    The product life cycle is the progression of a product through five distinct stages: development, introduction, growth, maturity and decline. The concept was developed by German economist Theodore Levitt, who published his Product Life Cycle model in the Harvard Business Review in 1965. We still use this model today.

    Does a product life cycle have 4 or 5 stages? ›

    A product life cycle is the amount of time a product goes from being introduced into the market until it's taken off the shelves. There are four stages in a product's life cycle—introduction, growth, maturity, and decline.

    What is the meaning of 4 Ps? ›

    The four Ps are a “marketing mix” comprised of four key elements—product, price, place, and promotion—used when marketing a product or service. Typically, businesses consider the four Ps when creating marketing plans and strategies to effectively market to their target audience.

    What are the 4 stages of the business life cycle? ›

    Every business goes through four phases of a life cycle: startup, growth, maturity and renewal/rebirth or decline.

    What are the 4 elements of diffusion of innovation? ›

    As expressed in this definition, innovation, communication channels, time, and social system are the four key components of the diffusion of innovations.

    What is the product adoption process? ›

    Product adoption is the process by which people learn about your product or app and start using it to accomplish their goals. Product adoption is usually distinguished from acquisition—while acquisition is about bringing people to your site, adoption is all about turning those visitors into users.

    What is step 5 in product development? ›

    Step 5: Consumer Feedback

    Feedback is extremely important to ensure the product design of the product works as intended to. With consumers testing prototypes, when it is carefully done you might uncover some insightful information about your product.

    Are there 6 six stages of product life cycle? ›

    This cycle can be broken up into different stages, including—development, introduction, growth, maturity, saturation, and decline.


    1. How To Collect Customer Feedback Without Committing To SaaS Product Roadmap
    (Dan Martell)
    2. Measuring Adoption in SaaS
    (Enterprise SaaS)
    3. How Do I Get My First 10 Customers for My SaaS Product
    4. How the Product Adoption Cycle | New Venture Launch
    (Alanis Business Academy)
    5. The Future of Customer Education and How it Impacts Product Adoption with Northpass and BambooHR
    6. Tried-and-Tested Script For Preselling Your B2B SaaS Product
    (Dan Martell)


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