Mastering User Adoption for Saas Companies

User adoption is the process of ensuring each of your users is successful in using your product to achieve their business goals. This is critical for SaaS (software-as-a-service) businesses who rely on recurring revenue because, if managed effectively, it leads to higher retention rates and unlocks new revenue growth opportunities for your business.

Unfortunately, this step is often skipped as companies quickly try to move straight into retention. Getting user adoption right is hard work, but without it, retention, expansion, and advocacy become significantly more difficult to master and leaves your organization vulnerable to preventable churn. It’s the bedrock of any best-in-class customer success strategy because it sets the foundation for users’ understanding of and success with your company and your product. When you make user adoption a key company strategy, customer success transitions from a department to an entire company philosophy. It’s truly amazing what happens when marketing, sales, customer success, product, customer support all embrace user adoption.

A strong user adoption strategy can mean the difference between growth and churn, which is why getting it right is a must for SaaS companies today. It is a fundamental element to the customer journey that must come before retention, expansion, or advocacy.

Why user adoption is vital for SaaS businesses

I’m sure most of you have read Tomasz Tunguz’s illustrative blog post about the math behind how a business with a -5% monthly customer churn rate can see an additional 73% in revenue annually versus one with a 5% monthly customer churn rate. That’s huge!

And while I want to acknowledge that churn has completely legitimized the customer success role, it’s also driven many companies to act from a position of fear, and that in itself is a weakness that I want to address. I think customer success was inherently born out of churn and that’s a tough starting point. It means we’re working from a place of reactivity to churn instead of proactivity against it in the first place, making it harder for us to progress as an industry and match our customers rising expectations.

At UserIQ, we look at customer growth as a company-wide, multi-step journey through several phases – retention being just one of them. It’s not a walk in the park; it’s more like a series of steep climbs you need to get through. It’s hard work.

In this journey, many companies are still trying to get their act together and figure out where to even start. Often they want to skip right to customer retention and expansion because that’s where the money is, but here’s what I’ve found: there are no shortcuts on the journey to customer growth. Too many companies (my own experience included) have skimmed or even completely skipped over adoption and have paid the price for doing so in that they miss out on building stronger foundations for their users.