Adoption rate

Why is adoption rate important for business?

Adoption rate is important because it shows how well a product, service, or technology meets user needs. 

It is one of several crucial digital adoption metrics that provide insight into how users are accepting and utilizing new technology.

If adoption is slow, businesses may adjust pricing, improve onboarding, or add features to increase engagement.

It also helps companies predict growth. A strong adoption rate suggests a product will gain more users over time, while a weak rate may indicate the need for better marketing or product changes.

For software and apps, adoption rate affects long-term retention and revenue. Products with high adoption are more likely to keep users and attract new ones.

Research supports this: McKinsey found that banks with strong digital adoption create more shareholder value through competitive advantages.

Another study found that improving digital customer experience increases satisfaction by 30% and revenues by up to 50%. 

In other words, adoption rate is a key factor in staying competitive and driving business growth.

What are the goals of tracking adoption rates?

The main goals of tracking adoption rates are to measure success, boost engagement, and support business growth.

Let’s explore these goals in more detail.

Measuring product success

• Tracks how many users actively use a product after trying it.
• Shows if the product meets user needs and expectations.
• Identifies whether onboarding and user experience work well.
• Provides data to compare performance across different versions or competitors.

Boosting user engagement

• Highlights where users lose interest or stop using the product.
• Helps improve features, onboarding, and customer support.
• Guides pricing, marketing, and messaging to increase adoption.
• Encourages better experiences that keep users coming back.

Supporting business growth

• Predicts long-term success by showing user trends over time.
• Increases revenue by improving customer retention and satisfaction.
• Helps businesses gain a competitive edge with higher adoption.
• Aligns teams on strategies that improve adoption and overall success.

Who is involved in the adoption rate process?

Many people inside and outside a company play a role in the adoption rate process. Internal teams shape, promote, and support the product, while external stakeholders influence adoption through feedback, regulations, or partnerships.

Let’s take a closer look.

Internal stakeholders

• Product managers: Plan features, set priorities, and track adoption trends.
• Engineers: Build and improve the product based on user needs.
• Designers: Make the product easy and enjoyable to use.
• Marketing teams: Create campaigns to attract and retain users.
• Sales teams: Sell the product and share insights on adoption challenges.
• Customer support teams: Help users and report common issues affecting adoption.
• Executives: Ensure adoption strategies support business goals and growth.

External stakeholders

• Customers: Use the product and shape adoption through their behavior.
• Investors: Expect strong adoption as a sign of success and future growth.
• Regulators: Set rules that may impact adoption, like security or compliance laws.
• Partners and suppliers: Provide tools, services, or integrations that affect usability.
• Industry experts: Influence adoption through reviews, trends, and recommendations.

What is required for adoption rate success?

To increase adoption rate, organizations need to focus on three key areas: making the product easy to use, keeping users engaged, and using data to improve adoption. These areas help users see value, stay interested, and continue using the product.

Make the product easy to use

Ensure the product is simple and intuitive from the start. Guide new users with clear instructions, tutorials, or walkthroughs to help them get started fast. Remove anything that makes adoption difficult, such as complicated steps or unclear features. Keep improving the product based on user feedback to make it even easier to use.

Keep users engaged

Show users why the product is valuable through emails, in-app messages, or tutorials. Offer strong customer support with quick answers and helpful guides. Create a sense of community with forums, FAQs, and training to keep users interested and involved.

Use data to improve adoption

Track key metrics like active users and drop-off points to understand user behavior. Test different approaches to see what boosts adoption. Use feedback and analytics to improve marketing, onboarding, and product features, ensuring users stay engaged and keep coming back.

Why do adoption rate projects fail?

Adoption rate projects often fail due to poor onboarding, lack of engagement, and failure to use data effectively. These challenges make it harder for users to adopt and continue using a product, leading to lower retention and missed growth opportunities.

Poor onboarding and user experience

If new users struggle to understand or navigate the product, adoption suffers. Complicated onboarding, unclear instructions, or a lack of guidance can frustrate users and cause them to abandon the product early. Without a smooth onboarding process, even the best products fail to gain traction.

Lack of engagement and ongoing support

Users need continuous motivation to stay engaged. If communication stops after onboarding, adoption rates drop. Poor customer support, a lack of tutorials, and limited product updates can leave users feeling unsupported. Without regular check-ins or engagement strategies, users may lose interest or switch to alternatives.

Failure to use data and feedback

Ignoring user feedback and key adoption metrics leads to poor decision-making. If organizations don’t track usage trends, drop-off points, or feature engagement, they miss opportunities to improve adoption. Without A/B testing and customer insights, teams may invest in the wrong areas, making it harder to retain users.

Adoption rate use cases

Businesses track adoption rates to see if users find value, stay engaged, and keep using the product.

Here are three examples of adoption rate in action.

Fintech

Scenario: A banking app struggles because many customers still visit branches instead of using digital services.

Method: The bank makes the app easier to use, adds secure features like mobile deposits, and promotes benefits through marketing. It also educates users on how to bank online.

Outcome: More customers switch to digital banking, reducing branch visits, improving satisfaction, and cutting costs.

E-learning

Scenario: An online learning platform sees many students sign up but few finish their courses.

Method: The company adds interactive lessons, progress tracking, and gamification. It also sends reminders and offers live support to keep students engaged.

Outcome: More students complete courses, leading to higher retention, better learning outcomes, and increased enrollments.

SaaS (Software as a Service)

Scenario: A business tool struggles to keep new users after they start a free trial.

Method: The company improves onboarding with in-app tutorials, setup guides, and quick customer support. It also adds incentives to encourage deeper engagement.

Outcome: More trial users become paying customers, increasing revenue, satisfaction, and long-term retention.