How To Master, Measure, And Maximize Your Activation Rate
Have you ever seen the 2014 sci-fi action movie Lucy, directed by Luc Besson and starring Scarlett Johansson?
In the movie, Lucy gains access to her brain’s full capacity, unlocking extraordinary abilities after being exposed to a powerful substance. The film delves into the concept of human potential and the activation of untapped capabilities.
Unfortunately, in the real world, it's tough love. We like to do things with the least effort possible, and our attention span is far from impressive. In 2015, it dropped from 12 sec to 8.25 sec, and it has definitely dropped further since.
Now, you might believe that creating an exceptional product is sufficient to guarantee users start and keep using it. Knowing the aforementioned, the reality is that even the most exceptional technically high-performing products only thrive when coupled with a robust user activation strategy.
Speaking of activation, let's dive deeper into the concept of activation rate. It’s a crucial indicator of how effectively your user activation strategy is working.
Today, we’ll go on a journey to activate 99% of your brain . I wouldn’t want you to become a universal consciousness like Lucy when she reached 100% brain usage. Sounds exhausting.
We will define user activation, look at its importance to SaaS companies, and learn how to calculate it—along with the benchmarks and metrics that go with it, what influences it, best practices to boost it, tools to measure it, and examine two successful high-activation companies.
Grab some brain food, and get your brain juices pumping. It’s time to lay all of your activation rate doubts to rest.
What Is User Activation?
You probably have a hunch what it is just by looking at the words.
User activation refers to the process of engaging and motivating new users to take specific actions that lead to their initial usage. It’s about leading them through the necessary steps to engage with and use the new offering. For example, setting up an account, completing a profile, performing a first task, or exploring a new feature.
Why Is User Activation Important in SaaS?
If you are in the Software as a Service (SaaS) business, you know that customer-centricity reigns supreme. I'd also add that user activation is pivotal.
So why is it so important? There are several reasons that build upon each other.
Retention & Churn
Acquiring a new customer is 5–25 times pricier than retaining an existing one. An effective user activation strategy ensures that new customers start using your product to its fullest potential as soon as possible. You want your customer, like Lucy, to say, “I’ve been given the ability to access all of it.”
It leads to higher engagement, which results in improved customer retention rates. Simultaneously it leads to lower churn rates, as users who see value early on are less likely to cancel their subscriptions.
Organic Growth
There is more. Users who activate and quickly find value with positive (first) impressions are more likely to look for and explore premium features, upgrade their plans, or consider additional services. In other words, they're more open to upselling.
Additionally, they are more likely to recommend your SaaS product to others.
All of the above translates into higher revenue opportunities for you.
Definition Of Activation Rate
You can't talk about user activation without mentioning the activation rate. Activation rate is the metric measuring the percentage of users who have completed a specific action or task that is considered a key step in engaging with your product.
It aids you in understanding how successful your activation strategy efforts are.
How To Calculate Activation Rate
Uh-oh—it's everyone's favorite time. It’s math time. As Lucy said — “Learning is always a painful process,”—so let’s get it over with.
Activation Rate (%) = (Number of Activated Users / Total Number of Registered Users) × 100
Where:
- “Number of Activated Users” refers to the users who have completed the specific action.
- “Total Number of Registered Users” refers to all users who have signed up or installed the product.
Let’s say you’ve launched a new productivity app and want to measure the activation rate for completing the onboarding tutorial.
- Number of Activated Users (completed the onboarding tutorial): 500
- Total Number of Registered Users: 2000
Now, the activation rate is following:
Activation Rate (%) = (500 / 2000) × 100 = 25%
What’s a “good” activation rate?
Apologies for bursting your bubble, but it is too tricky to say what a “good” activation rate looks like. The activation rate can vary depending on the specific action being measured, such as account creation, completing a tutorial, making a first purchase, or using a certain feature.
What is universal, though, is that a higher activation rate suggests that more users successfully engage with your product and progress through the initial stages, which leads to improved retention, engagement, and overall customer satisfaction.
Now, if this answer is insufficient for you, there are two tactics that can help you define your “good."
Use an industry benchmark
Research tells us that a favorable activation rate typically falls within the range of 25% to 30%. This implies that, among the total users who have registered for your product, around 25%-33% of them have successfully achieved the activation milestone within your specified timeframe.
When it comes to SaaS products, insights from the same research show that the average activation rate is around 36%, while the median hovers around 30%.
Create your own benchmark
If you are a bit like me and wonder exactly which benchmark presents itself as the “industry benchmark," it’s worth setting up your product-specific benchmark.
Create a tracker and start collecting the activation rate data for new offerings. Use this data to establish your product’s benchmark. Though you might initially collate the information of all offerings, don’t be afraid to categorize further.
Why tracking activation rate is critical
Like Lucy, we all know that “Ignorance brings chaos, not knowledge,” so if you want to become smarter and smarter and better and better, it goes without saying that tracking the activation rate is crucial. How will you know why activation numbers are dropping or why churn is increasing if you aren't watching your metrics?
I'm partial to Kaizen with its "Plan, Do, Act, Check" framework. When it comes to user activation, I like to reframe it to Assume, Collect, Analyze, Evaluate.
Other Metrics That Give Context To Activation Rate
Activation rate is not a silverback gorilla bumping its chest on top of the activation metrics hill. It’s a team player that plays nicely with other metrics.
There are numerous accompanying metrics, such as feature adoption rate, daily/weekly/monthly active users (DAU, WAU, MAU), Customer Satisfaction Score (CSAT), and Return on Activation (ROA). However, I'd argue that the following five key metrics truly provide a comprehensive understanding of the effectiveness and impact of user activation in your product.
Time-to-value
Time-to-value indicates the time it takes for users to experience the full value of your product. It affects how quickly users are engaged and activated.
User Engagement
This metric measures how actively users interact with your product after activation. It indicates the level of ongoing interest and satisfaction.
Conversion rate
This measurement illustrates the percentage of activated users who completed a purchase or upgrade. It showcases the effectiveness of activation in driving further engagement.
Retention rate
This indicator demonstrates the percentage of users who continue using your product over time. It highlights the lasting impact of effective activation.
Churn rate
Whenever retention rate is mentioned, you can’t forget about its evil brother—churn rate. The churn rate reveals the percentage of users who discontinue using your product. It gives insight into user retention post-activation.
Factors Influencing Activation Rate
The activation rate is influenced by various factors that collectively shape the user journey. Understanding these factors provides valuable insights into optimizing the activation process for enhanced user adoption and sustained engagement.
Impact Of User Onboarding Experience On Activation
A seamless and intuitive user onboarding experience significantly impacts the activation rate and can be achieved through user onboarding software.
Think about it—when you’re guided through clear steps from an onboarding checklist, provided with relevant information, and experience minimal friction during onboarding, are you more or less likely to successfully activate and explore the product’s offerings? The data tells us that whopping 76% of users tend to stick around if the onboarding flow is welcoming.
Significance of User Engagement and Interface Design
User engagement and interface design are critical in driving activation. That's why 74% of companies acknowledge its importance in boosting sales. An engaging and user-friendly interface encourages users to explore product functionalities, making it more likely that they will achieve activation milestones and continue using your product.
Role of Product Features and Benefits
The features and benefits you offer play a crucial role in activation. Users are more motivated to engage when they perceive the value and benefits of specific features, which leads to higher activation rates. Tailoring your features to user needs enhances the likelihood of successful activation.
Role of Marketing & Communication on Activation Rate
Effective marketing and communication strategies play a significant role in boosting activation rates. Clear and compelling messaging about the product’s value proposition, benefits, and how it meets user needs can entice users to take action, ultimately leading to higher activation rates.
10 Ways To Boost Your Activation Rate
If you want to unlock your activation rate potential and boost it all the way, there are infinite approaches you could try.
Let me briefly showcase my personal top 10 activation boosters, with statistics to prove how valuable they really are.
1. Simplified onboarding
Let's start with the fundamentals. Streamline your onboarding process by minimizing steps and providing clear guidance. Make it easy for users to understand the product’s value and how to get started. 8 of 10 users will abandon your product if they don’t know how to use it.
2. Personalized guidance
Offer personalized tutorials or walkthroughs tailored to user preferences and needs. This helps users see immediate value and encourages them to explore further. 76% of customers are more eager to buy personalized offerings.
3. Feature highlighting
Speaking of personalization! Showcase your core features, preferably personalized ones, that provide immediate benefits. Highlighting features that solve pain points drives quick activation. If reaching the "Aha!" moment takes more than 14 min and 20 seconds, you can wave goodbye to your new users.
4. In-app messaging
Use in-app messages to guide users through key actions and features. Contextual tips and other in-app messages improve engagement rates by 131% compared to solutions that don’t provide them.
5. Clear call-to-action
Ensure that your calls-to-action (CTAs) are prominent and clearly communicate users' next steps. Customized CTAs lead to a 42% higher conversion rate among visitors compared to generic or unclear CTAs.
6. Gamification
Gamification is on the rise, with over 70% of the top 2000 global companies adopting gamified strategies. Incorporate gamified elements (such as rewards, badges, or challenges) to motivate users to complete activation milestones.
Companies that implemented gamification to enhance customer engagement have shown a 54% uptick in trial usage and a 15% rise in click-throughs for purchases.
7. Visual Storytelling
No less than 83% of human learning is done visually. With that in mind, use visual storytelling to illustrate your product’s value proposition, making it more engaging and relatable for users.
8. Limited-Time Offers
Fun fact: did you know that 55% of consumers expect to receive discounts and money-saving offers? Try introducing limited-time promotions or exclusive benefits for users who complete activation within a specific timeframe.
9. Responsive Support
Though we appreciate Toto for their song “Hold the Line,” when it comes to customer support, we hate it. Offer responsive customer support during onboarding to address users' queries or issues. Customer support is the most important factor for customers when it comes to trusting a company.
10. Data-Driven Iteration
You’re in product management, so this is in your DNA. Continuously analyze user behavior and activation data to identify bottlenecks and refine your activation strategy. Utilize app analytics, transactional data, customer surveys, and social media and review site data to learn more about your improvement opportunities.
Best Tools to Measure Activation Rate
Lucy said, “Time is the only true unit of measure. It gives proof to the existence of matter. Without time, we don’t exist.” We want to make sure we spend our time well, and when it comes to measuring and optimizing our activation rate, help is always appreciated.
All great products depend on the right people, processes, and tools. And if the people in your company aren’t aligned on the activation strategy and processes aren’t in place, you are better off getting those in check before diving into analytics tools (or any tools, for that matter). If both people and processes are in check consider one of the below.
- Mixpanel: Mixpanel offers advanced analytics for tracking user interactions and behaviors.
- Amplitude: Amplitude is an analytics platform that helps you understand user behavior and track activation rates in your product.
- Segment: Segment allows you to collect, manage, and route customer data to various analytics and marketing tools.
- Kissmetrics: Kissmetrics focuses on customer engagement and conversion tracking.
- Pendo: Pendo offers product analytics and user feedback tools.
- Woopra: Woopra provides real-time customer analytics.
- Intercom: Intercom offers tools for customer communication and engagement.
- WalkMe: WalkMe provides guidance and engagement tools.
- Userpilot: Userpilot provides a user onboarding and product adoption platform.
- Appcues: Appcues offers a user experience platform that helps you design, launch, and measure customer journey experiences.
2 Examples of Successful High-Activation Businesses
I am always rooting for the underdog, and I prefer to look at up-and-coming companies, so let’s look at two successful High-Activation companies and the three key things they excel at to achieve high activation rates.
Taskade
Taskade, founded in 2017, is a collaborative workspace that combines AI-generated task lists, outlines, and mind maps.
So what is it they do well to achieve high activation rates?
1. Any time, any device, anywhere
Though having a web app, Taskade provides desktop and mobile applications, as well as browser extensions, to increase user activation. The solutions provide a faster experience with better notifications and native support.
2. Simplified onboarding and sleek upsell
They offer a free trial and have several personal and business plans.
Free trial users start with an intuitive sign-up and a minimum of information to be shared (it took me less than a minute to set up)
Through a simplified onboarding process, offering templates, and interactive tutorials, Taskade is doing a magnificent job of achieving high activation rates among users seeking efficient task management.
3. Effective marketing and communication strategies
On the marketing front, Taskade is doing well at building a trusted brand to increase activation rates. For example, they're:
- Being featured by reputable sources,
- ...and acquiring extremely respectable user ratings and reviews!
Coda
Coda, founded in 2014, is an online document editor that combines documents, spreadsheets, and databases.
They manage to achieve high activation rates through ease of use, engaging support & training materials, and ecosystem integration.
1. Ease of Use
Coda’s onboarding is quick.
Additionally, through the use of building blocks, the solution is extremely easy to discover and use, which increases the activation rate.
2. Engaging support & training materials
Whether you’re a visual learner, you like to read, enjoy webinars or training videos, or you just need a quick guide with some in-app guidance, Coda has it all. This makes it easier for users to find their "Aha!" moment quicker and keep learning, each and every time activating more features that cater to their needs
3. Ecosystem integration
Coda positions itself as a best-in-breed that is the center of users' documentation needs. To enable a higher activation rate, they offer a wide range of integrations. When users set up an integration, they’re more likely to stick around and further explore.
99% Unlocked: Elevate Your Activation Rate Efforts!
Just as Lucy unlocked her brain’s potential, mastering user activation unlocks the potential for product success. Now, with 99% of your brain activated, you are ready to get users amped up to use your product.
Remember, activation is not just a one-time event. It’s a journey that begins with onboarding, flourishes through engagement, and thrives with continued optimization. With the strategies, metrics, and benchmarks outlined in this article, you’re ready to harness the true power of user activation and drive your product toward success.
So, embrace the challenge, engage your users, and let your user activation rate soar!
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