One of the key factors that can make or break a product’s success is the user experience, which largely depends on how a user interacts with the product. Users will likely love a product they find easy and enjoyable to use. And a great product is nothing without its features – the features that provide value and meet the users’ needs.

This is why feature adoption plays a key role in improving customer satisfaction and retention, more so in the case of SaaS products and solutions. If customers find it difficult to use the features, they may be less likely to continue using your product or recommend it to others. So, it’s important to measure and improve your feature adoption rates.

Here is everything you need to know about feature adoption metrics and how you can use them to make data-driven decisions to boost your product’s performance.

What is feature adoption in SaaS, and how is it calculated?

The success of a SaaS product depends largely on how well you can introduce the product’s features to your potential users. The idea is to capture their attention without being too overwhelming. Feature adoption is a key indicator of user engagement and satisfaction that determines your product’s total value. Product teams generally use this metric to assess how users engage with certain features.

For instance, let’s say you have launched a new reporting tool in your SaaS platform as part of your feature adoption strategy. You would monitor how many users access this tool and use it regularly. What if only a small percentage of users engage with the tool? It might be an indicator that you need to inform the users or release some feature enhancements to improve engagement.

Another example could be a tracking tool that tracks the use of a collaborative workspace feature. If the initial product experience is good and the users find it valuable, they are less likely to churn. This makes feature adoption a key business metric for user engagement and retention.

Now, the most important question: how do you calculate feature adoption?

Here is the feature adoption rate formula:

Where:

• Number of users using the feature is the total number of users who have actively engaged with the feature within a specific period, let’s say a month.
• Total number of eligible users is the total number of users who have access to the feature during that same period.

Why is feature adoption so important for SaaS products?

If you’ve been in the SaaS space for some time, you are probably all too familiar with how a large percentage of users never get to experience the full value of a product. It is because they expect the product to be intuitive and easy to use. And features are the best way to grab your users’ attention from the get-go.

Feature adoption directly impacts user engagement by determining exactly what features provide the most value to the users so they are most likely to use your product. By using this data, you can match value with behaviors and get users to take full advantage of your product functionality. It reduces churn and drives growth.

Additionally, a value-driven feature adoption strategy helps you refine your product offerings. This will help you win loyalty and enhance the user experience in the long run.

What’s the difference between feature adoption and product adoption?

On the surface, they seem quite similar. However, feature adoption and product adoption are two related but different aspects of how users interact with your SaaS product. 

Feature adoption measures how often users are using specific features or functionalities of a SaaS product. This means the more features they adopt, the more value they derive from your product. It helps you break down which features are valuable and popular among users. By understanding user engagement with specific features, you can encourage users to come back to your product more often.

In contrast, product adoption (also called user adoption) measures the overall acceptance and usage of your product. It is about raising awareness of your new product and its unique value proposition to get users to start using it. Product adoption is converting potential customers into regular users to accomplish your intended business goals.

In a nutshell, feature adoption measures the performance of specific features within a product, while product adoption provides a comprehensive picture of how well the users are interacting with your product as a whole.

What impact does feature adoption have on overall product health metrics (retention, monetization, etc.)?

In SaaS products, feature adoption is a subset of product usage. A lack of usage is a reflection of a lack of value that users are getting in a product.  Let’s look at how it impacts your overall product health metrics.

• Retention: Retaining users is often more cost-effective than acquiring new ones. So identifying metrics that reflect how many users are renewing with you – as opposed to acquiring new users – can be critically important. A high feature adoption rate means your product is gaining traction, which suggests users are less likely to look for alternatives.
• Conversion: Nearly every SaaS product exists to solve some problems. Features that make your users smart by turning an otherwise painful process into a simple and intuitive experience can lead to higher user satisfaction. This can boost your overall user engagement and improve your Net Promoter Score (NPS).
• Monetization: When users find value in your product and its features, they are more likely to stick with it. A high feature adoption rate is the key driver of growth – it can directly impact revenue. Particularly with subscription-based SaaS models, a high feature adoption rate can lead to increased recurring revenue (ARR) and monthly recurring revenue (MRR).
• Engagement Metrics: When users actively use specific features of a SaaS product, it leads to higher engagement levels. On the flip side, if a product doesn’t deliver on its promise, it is always at risk of replacement. Feature adoption analytics provide valuable insights into what features align with users’ requirements and what areas need improvement.
• Lifetime Value (LTV): LTV is a measure of the average gross revenue associated with a potential customer. Features that drive engagement have the potential to create great product experiences. If your product has the potential to create a lasting relationship with your users, you can generate loyalty that results in increased customer lifetime value.

Feature Adoption Funnel

The feature adoption funnel is a conceptual framework for understanding and visualizing your feature usage and adoption. This four-step process helps both new and existing users navigate through the stages of adopting a new feature within a product.

1. Exposed

This is the first stage where users are exposed to the new feature. They get to know about it either on their own or through various channels such as in-app notifications, alerts, emails, guided tours, feature release announcements, etc. The goal of this stage is to create an alert to let users know about the feature and its potential benefits. Users don’t need to take any action at this stage.

For example, let’s say 100 users have used your product, out of which only 45 saw the new feature page. This means you have an exposure rate of 45%.

2. Activated

This is the second stage where users start using the feature and they have activated it. This stage suggests the users have tried the feature and completed the actions to activate the feature like importing their data. Remember, not all features require activation.

So out of 45 who knew about the new feature, 30 activated it. You are now looking at a 67% activation rate.

3. Used

At this stage, users have already interacted with the feature to see how it works. We are talking about the users who have used the feature at least once. If they haven’t yet, you need to educate users about the feature’s potential benefits and how they can integrate it into their workflows.

Out of the 30 users who activated it, only 5 used the feature, which means 16% of activated users have used the feature.

4. Retained

This is the final stage where users have found the feature useful. It indicates that users love the feature and they are likely to use it repeatedly. It shows how engaging and useful your new product feature is. It is a key performance metric that helps understand where you should focus your attention to drive engagement.

Imagine 4 out of 5 users have used the feature again, so now you are looking at an 80% retention rate. Your overall retention rate becomes 4%.

To drive feature adoption, understanding each step is important for your new feature adoption strategy, much like how a SaaS conversion funnel is vital for your product growth.

Key metrics to properly track feature adoption

Remember, feature adoption is not a one-off deal. You need to track your progress by identifying the key metrics that can improve your feature and product adoption over time. The question is: how to measure feature adoption? Well, you can do that in a number of ways. One effective way is to closely monitor some key metrics that could impact new feature adoption.

Here are some key metrics that can help you track feature adoption for good.

Overall feature adoption rate

Feature adoption analytics measure the percentage of users who have interacted with your product’s features relative to the total number of users who are using your product. It basically tells you how valuable your product is from a user’s point of view. The more value your product’s features provide to the users, the more likely they are to keep using your product. You can use this metric to assess your product’s overall health.

Feature adoption by user cohort or segment

To better understand how well your users are interacting with your product, you can analyze users’ behavior by dividing them into specific segments or cohorts. These categories could be based on user locations, demographics, age groups, occupations, and so on. It is pretty much similar to the aforementioned, except it helps you target specific groups that are interacting with specific features within your product.

Exposed rate

The exposed rate plays an important role in assessing the effectiveness of your product and its features at the initial stage. This is where you can start working on your promotional strategies to make sure more users know that a new feature exists. By tracking the exposed rate, you can identify potential gaps in your outreach strategies. 

Activation rate

The activation rate measures the ability of a product to meet users’ perceived value. It tells you how many users are actively using the new features in a productive way. A high activation rate means users find the features valuable and are integrating them into their daily workflows.

Usage rate

The usage rate metric helps you identify features that are performing poorly by tracking the users’ attention span on the features. But a high usage rate doesn’t always mean the product is doing good. It could indicate that the users may be struggling to engage with the features. However, it could also mean users are actively engaging with the product.

Retention rate

The retention rate is an important metric that tracks how many users continue to use a new feature over an extended period. It assesses the long-term value and effectiveness of the features. If more users keep coming back, they are less likely to abandon your product. By tracking the retention rate, you can focus your attention on how to drive feature adoption.

Time-to-first use

This is an important metric that measures the duration from when users become aware of a new feature to when they have actually used it for the first time. This is important for assessing what features users find engaging to adopt first. A shorter duration suggests users are quick to recognize the value of a feature. By tracking this metric, you can identify potential bottlenecks that could impact user engagement.  

Time to adopt

This metric measures the time it takes for a user to start using a new feature within your product and recognize its potential after their first interaction with the product. A shorter timespan indicates that a user realizes your product’s value. It provides valuable insights into potential friction points to help you develop a data-driven strategy for feature adoption.

Frequency of the use

This measures how many times a user interacts regularly with a feature within your product. Use this metric to identify the users who are actively using your product more than others. You can make a list of those users to possibly convert them into regular customers.

How to improve feature adoption rates

A good feature adoption rate varies by industry, but higher rates generally suggest that users find your product valuable. Each new feature is a means to an end. The goal is to solve users’ problems and enable them to achieve their targets faster and more efficiently. Particularly in the SaaS ecosystem, where customer acquisition costs are high, a good feature adoption rate can significantly impact user retention.

Here are some feature adoption best practices you could leverage to increase adoption of new features.

Promote product features via in-app, email, and other communication channels

One of the first steps to ensure users are aware of the new features is to create a robust feature announcement strategy. Treat it like you are running a small media campaign. Remember, one of the best feature adoption tools is your product itself. Reach out to as many people as you can across multiple channels.

Here are a few of them:

• In-app notifications: It is a surefire way to promote feature adoption and discovery. Use in-app banners, pop-ups, and alerts to immediately catch your users’ attention in a less intrusive way within the app itself.
• Email campaigns: Create an engaging email campaign to highlight the product’s value, features, and potential benefits. You can target a specific group of users via emails or create reminder alerts for potential users who haven’t interacted with the new feature yet.
• Social media works like a wonder when it comes to announcing new features. It is an excellent way to introduce your new SaaS feature to your existing followers. Create social media posts on all the popular social media channels like Facebook, X (Twitter), Instagram, and LinkedIn to target more users.
• Sponsorships from industry influencers can help you tap into their existing user base and leverage their credibility to your advantage. It is amazing how influencer marketing can amplify your reach and credibility by highlighting your product’s benefits and use cases.

Use in-app walkthroughs to improve adoption

Once users know about a new feature, it becomes apparent to guide them through its use and benefits. Personalize in-app tutorials by adding graphics (videos, GIFs, etc.) to your message and encourage users to provide feedback. Use step-by-step guides or tooltips to teach users how to use the feature effectively and how it fits into their workflow. 

Additionally, these interactive walkthroughs or tutorials allow users to play around with the features without leaving the dashboard. This way you can encourage users to stay within your product’s user interface (UI), thereby increasing user engagement.

Watch session recordings to see how users use features

Not every product is a one-size-fits-all thing. It can have different types of users. If a feature brings value to one user, it doesn’t mean the same feature is relevant to every user out there. Track what users are interacting with your features and how. It can provide meaningful insights into users’ behavior and requirements.

Watch session recordings for a detailed feature adoption analysis. It will tell you how users navigate through your product and use specific features. This will help you identify their pain points and get a detailed picture of what users go through while using your features. Use these insights to improve user experience and feature adoption rates.

Survey users who used the feature to improve it

How do you encourage feature adoption? There is no better way to improve user experience than by directly asking your users about their experience with feature adoption. Surveys are an excellent way to analyze the user experience. Create targeted surveys or interviews to track usage patterns and gather information about their experience.

You can use the data to make data-driven decisions and make improvements to your product. For instance, if users are not interacting with a certain feature within your product, you could tweak the feature or some other element to encourage user engagement.

Enrich your product feature with the new functionality

Great features set your product apart. As you gather feedback and usage data, you may learn about opportunities to make your product more engaging and useful to potential users. Add new functionality or more details to product descriptions to align features with user needs. However, do not overwhelm users with too many options.

Keep users in mind while adding or improving features to enhance your product’s core functionality. The goal is to create features that can help your users accomplish tasks and remove pain points.

Additionally, you can use tools like Google’s HEART framework to target long-term feature adoption. It provides valuable insights into how to measure and improve user engagement. 

Experiment, experiment, experiment

As we mentioned, feature adoption is an ongoing process. Keep experimenting and try different approaches until you get your desired results. Each experiment provides useful data that you can use to drive users’ activation and retention.

By iterating continuously, you can not only drive feature adoption rates but also improve the overall value of your product’s features. After all, feature adoption can directly impact overall product adoption.

Key learnings on SaaS feature adoption

Let’s face it. Today’s users have a short attention span. They don’t have the time or patience to try out new things by themselves. They want the product to be intuitive, fast, and easy to use. By implementing the right feature adoption strategies, you can make the users notice your new features, interact with them and seamlessly integrate them into their workflow.

Get it right and your users will thrive and become long-term users of your product. And be prepared to adapt your feature adoption solutions as needed.

Frequently Asked Questions