In SaaS, the need for speed in customer product adoption is paramount.
The quicker customers adopt software, the sooner they realize value from it and the less likely they are to churn.
It goes without saying then, that how effectively Customer Success drives product adoption has a significant impact on revenue.
Yet despite adoption being a fundamental tenet of SaaS, why is it that Customer Success so rarely measures it?
Here is why measuring adoption velocity will also help improve it.
How to measure adoption velocity then?
In last week’s article I introduced the concept of the Customer Funnel and how to go about building it.
The Customer Funnel defines the path to success that a customer must follow in order to fully adopt the software, the Customer Journey Index outlines how to measure it.
To demonstrate how to use the customer funnel to measure adoption velocity let’s take a look at a real live customer example (scrubbed to preserve confidentiality).
The above illustration shows this particular company’s (let’s call them Awesome Co.) customer funnel and their corresponding customer journey index.
Awesome Co. first defined their customer journey map and identified the main milestones of the journey, i.e. stages of their customer funnel, as follows:
For each stage in the customer funnel, there is a very clearly defined objective to be achieved with the customer.
The funnel acts as Awesome Co.’s true north providing clarity and alignment on the primary objective for each stage.
In order to measure the effectiveness of adoption, Awesome Co. then defined what metrics,
along with the corresponding parameters to measure them, most accurately denotes customer movement through the journey.
The resulting customer journey index is as follows:
With the customer funnel stages and corresponding metrics in hand, Awesome Co. setup their CRM to contain this information.
Each customer is assigned the funnel stage corresponding to where they are at in their journey and once the metric denoting successful completion of that stage is reached, they are automatically moved to the next stage in the funnel.
Aggregating the data of movement through the funnel across all customers, Awesome Co. now has visibility into adoption velocity.
What does adoption velocity data tell us?
Adoption velocity is really effective in understanding where customers in aggregate, and individually, are having challenges in the journey.
If customers are all generally slowing down in one area of the journey, an organization should look for ways to improve adoption velocity by removing the common challenges all customers are having.
This could mean looking at improving processes, training, product user experience, etc.
If individual customers are slower than the average velocity of the customer base, then Customer Success should use this benchmark to proactively connect with customers to find out what their specific challenges are, and assist them accordingly.
In that way, adoption velocity points out where the journey is not as seamless as it could be.
Adoption velocity is also a very effective leading indicator of risk because it is measured right from the start of the engagement, even before customers start using the product (i.e. if the customer is too slow in getting on-boarded, the risk is highlighted immediately).
In this regard, adoption velocity points out early on when there are problems in the journey.
Bottom Line
It is a fundamental tenet of SaaS that adoption determines revenue.
In order to be successful, Customer Success must understand how effective it is in driving adoption and recognize proactively when to assist customers that are not adopting well.
By defining a customer funnel and customer journey index, Customer Success has a means to measure and monitor customer progress providing key insights into how effective the adoption process is.
Speed is everything when it comes to product adoption.
Learn to measure and recognize it to proactively drive adoption.
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