Product Adoption Curve: The Five Customer Segments to Look Out For

Every stage in your SaaS product adoption curve is crucial for business growth. Explore how your product team can make the most of these customer segments.

Ray Slater Berry
10 min read
Product Adoption Curve: The Five Customer Segments to Look Out For

Innovators, early adopters, early majority, late majority, and laggards; the five different customer segments, each related to a different stage of the product adoption curve. Understanding these five product adoption phases can drastically help your SaaS business with its Product-Led Growth goals.

In this article, we’ll cover:
  • A definition of the product adoption curve 

  • A breakdown of the five stages to the product adoption curve and how they can influence your product lifecycle

  • How to cross the chasm from early adopters to early majority

We’ll pepper this article with actionable tips on how to use in-product experiences to increase user activation and sustain business growth throughout the entire adoption curve of your SaaS product.

What is product adoption curve? #

The product adoption curve is the visual representation of when different customer segments are most likely to adopt your software. 

When your product marketing team understands your product adoption curve, they can adjust product messaging and the timing and placement of that messaging to score higher product adoption and product retention rates

The concept of the product adoption curve comes from Everett M. Rogers and his book Diffusion of Innovations, where he explains how different types of people adopt new technology at different times in its lifecycle. 

Rogers’ adoption model identified five stages to technology adoption and the five segments of people that fall into each stage: 

  • Innovators (2.5%)

  • Early adopters (13.5%)

  • Early majority (34%)

  • Late majority (34%)

  • Laggards (16%)

This model has been widely accepted by product managers and startup founders alike to explain different stages of product adoption. Represented visually, the product adoption curve looks like this:

5 customer segments essential for the product adoption curve #

Despite there clearly being a peak in product adoption rates, a SaaS business can’t jump straight into the deep end and win the early majority. Each stage of the product adoption curve is essential and mandatory. 

Only your product team can dictate how long you spend in each stage and how you make the most of these user segments.

Knowing that your SaaS needs to go through each of these stages, let’s explore them, why they’re important, how you can profit from them, and what product marketing teams need to do to maximize their opportunities.

Customer segment #1: Innovators #

The innovators, the risk-takers, the enthusiasts. These tech aficionados are often the smallest user base of your product across its lifecycle. However, that doesn’t mean they’re any less important! This is where it all starts.

These users come fast, and they move fast. They thrive off being among the first in the adoption process. Being first is often a stronger motivational driver than having a problem they need solving or a job-to-be-done in your product. Therefore, they are not a sign you’ve found product-market fit.  

Typically, these users don’t care for bugs or clunky UX. But they do care about costs, so there’s a high chance you’ll need to meet them at what they’re willing to spend—or offer a freemium plan—if you want to activate them within your product in the first place.

How to make the most of innovators for your product lifecycle   

For all of their supposed flaws, innovators are exceptionally useful. They are essentially your Beta testers. Innovators don’t care about a specific job-to-be-done; they care about trying new things and being among the first to do so. 

These are the trailblazers. They’ll give your MVP a run for its money—if any—and they’ll be there to provide you with essential product feedback. The good, the bad, the downright ugly, you’ll hear it all from this customer segment. Take it all on board, show them you’re actively making changes, and you could hold on to some of your “founding users” for years to come.

🦎 Pro tip: You can use in-app Microsurveys to collect quantifiable feedback from innovators while they are interacting with your product and capture their thoughts, opinions, and suggestions right then and there.

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Customer segment #2: Early adopters #

The thought-leaders, problem solvers, industry visionaries. Early adopters come in slightly larger numbers than the innovators. They also tend to have a genuine need for your product, driven out of a tired way of doing their job-to-be-done. There’s a high chance they’ve been looking for a solution like yours for a while. They’re excited to finally get their hands on it. 

Early adopters are okay with a few glitches along the way, as anything is better than what they had. They’re also okay with paying for the product. Early adopters are typically financial decision-makers within their businesses. However, they’re expecting to get their money’s worth. 

Early adopters need faster time-to-value; they want their “aha!” moment yesterday, and they expect more personalized support solutions than you can probably handle. But, that’s all okay, because of what they can bring to your product growth table. 

How to make the most of early adopters for your product lifecycle

Early adopters use your product because they have a real need for the solution you provide. There’s a lot you can learn from how they discover your product, the language they use to discuss your product, and the journey they take within your product. 

There’s also a lot to be said for segmenting this user base going on their “aha!” moment and reason for churn. Understanding all of the above can help you with product positioning, product messaging, and user onboarding.

 🦎 Pro tip: Use product walkthroughs to give early adopters a personalized experience that enables a rapid time-to-value with your product. This will help you win more customers quicker, fight churn better, and cross the chasm faster.

*Crossing the chasm 🦘

Customer segment #3: Early majority #

The pragmatists, the cautious researchers. The early majority is a tough customer segment to reach. We made crossing the chasm look easy. It’s not, but it’s well worth it. 

The early majority is the largest and most promising customer segment within your product lifecycle. It’s the time your SaaS can truly start seeing an increase in MRR. Once you’ve crossed the chasm, you’ve essentially found a product-market fit

You’re building a user base that has a job-to-be-done. These users have faith that your product is the one to do their job and—after devoted research—have decided to choose your product. 

The early majority don’t want to see any bugs. They come rife with pain points, and they’re putting all their eggs in your basket. 

The early majority like to take their time. They seek out referrals—which is tricky as they run in circles with other early majority users—not early adopters. Which begs the question… 

How do you cross the chasm? Going from early adopters to the early majority

Perhaps you’re familiar with Geoffrey Moore’s book Crossing the Chasm. In its third edition, Moore goes into a great amount of detail on how you can cross the chasm from early adopters to early majority and successfully bring your product to the masses. 

However, if you don’t have time to read the book or simply want a few bite-sized hacks, here are three ways you can cross the chasm

  1. Focus on case studies and testimonials

Early majority users need evidence that your product can do what they need it to do. They need to know that it’s been tried and tested before them and that they can start using it effortlessly from day one. 

  1. Adapt your product messaging 

One of the most crucial things you’ll need to do to sell to this segment is to adapt your product messaging. You’re no longer talking to innovators or risk-takers. Nor are you talking to lead decision-makers. You’re now trying to attract those that will be using your product every day—and may need to win buy-in to get it onboard. Your product messaging needs to speak clearly to this new segment. 

  1. Run customer interviews and  feedback opportunities

The only way you’re going to adapt your product messaging or build case studies is by talking to your users. Hopefully, you’ve set up a communication culture from day one. If this is the case, your users should be more than happy to provide you with insightful feedback to help build a bridge and cross the chasm.

🦎 Pro tip: Use a combination of different in-product survey types to collect user feedback. The quantitative and qualitative data you can collect can help you with further product development direction. Or you can use the insights to craft compelling in-product messaging and testimonials.

That’s it! You’ve crossed the chasm! You’ve made it, right? Not quite. You’ve got the late majority and laggards to work with next So, how can your early majority further support your product growth?

How to make the most of the early majority for your product lifecycle

The early majority are a valuable resource for understanding if your product and features perform as you expected. How these users interact with your product can give you valuable insights in adapting your user onboarding strategies, so future users can find their “aha!” moment even quicker. 

The actions or support requests your early majority user base takes within your app can also help scale your self-serve learning strategy

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Customer segment #4: Late majority #

The early majority and the late majority customer segments are typically equal in size, making your late majority equally important in achieving greater MRR and ARR. The late majority are often more reluctant to change. They only adopt your platform for fear of missing out or losing their competitive edge. 

Typically this segment has a lower budget than their predecessors, which means they’re more conservative with their spending and even slower to say yes than the early majority of customers. 

Once again, your product messaging will need to shift. The good thing is, this segment already knows what your product does, they’re familiar with your brand, they know they could benefit from your solution. However, they’re still not signed up. 

Meaning, you’ll need to reposition your product marketing tactics to be more personalized to business use cases, specific jobs-to-be-done, business sectors. Essentially it’s in-depth persona-based marketing at this stage. 

Your segmented efforts will likely be costly as you’ll need to invest in smart tools to help you execute niche campaigns. However, by now, your SaaS should be in a comfortable enough position to get to work. 

At this product adoption curve stage, consider using: 

  • Retargeting campaigns 

  • PPC advertising

  • Organic SEO tactics

  • Email marketing campaigns 

  • Live webinars 

  • Data-scraping chatbots

Customer segment #5: Laggards #

The skepticists, resistant to change, uncomfortable with technology. The laggards certainly don’t sound appealing, and that’s for good reason. These are the users who’ve adopted your product because everyone else has, but they still don’t believe it’s necessary. 

These users are stubborn, stuck in their ways, and they often adopt your product because they don’t have a choice. Despite laggards still being a relatively large customer segment, they’re often considered bad news in terms of growth. If you’ve reached laggards, it means you’ve potentially saturated your market or you're losing it to someone that’s doing it better. 

If you’ve identified your product lifecycle as selling to laggards, it’s likely time to think about building a new product or expanding the existing one with innovative features. What does all of your previous data tell you? What can you learn? How can you get back to the start, to those early innovators and early majority, with a new feature?  

Closing with an ideal product adoption rate #

You can calculate your product adoption rate with the following equation.

What’s a good adoption rate to aim for? This will mostly depend on your industry and business type. How other SaaS products are performing? According to Mixpanel’s Product Benchmark Report, SaaS businesses saw an average of 3% growth in month-over-month new active users during 2019, while the best-in-class products saw user growth of 13% per month.    

We’ll leave you with that. Remember, there’s something to be learned from every stage of your product adoption curve—there’s something to be earned from it too. If you see your SaaS nearing the end of it, jump to the drawing board and see where you can use your learnings to innovate new features and reach new audiences. 

In doing so, you’ll build product adoption and product retention rates. You’ll also build customer lifetime value, make data-driven product experiments, and create a new product adoption curve to drive MRR all over again.

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