So you’re getting all that organic traffic but barely any new customers, huh?
Happens to the best of us.
But it becomes a real problem if you’re late to figure out what’s wrong. But hey, no worries. We are here to figure out the problem.
My top guess is that you are suffering from low user activation.
Let’s fix it.
Today, we are talking about:
- What user activation is,
- Why user activation matters so much,
- User activation metrics you must track,
- Some advanced tips to increase user activation, and
- Some great examples of user activation done right by big companies
Let’s get right into it.
What Is User Activation?
User activation is the second pirate metric of the infamous pirate funnel, a.k.a. AARRR. It is the point of the funnel where your users realize the value of your product. In fact, there are different interpretations of the term, and it is indeed a unique process for different products and business models. On the one hand, user activation can be the first time users have an Aha! Moment using your product (after getting their main task done, seeing a unique functionality in-app, etc.); on the other hand, it could also refer to when users are done with a free trial to move onto a premium one.
So, looking at the AARRR funnel and our pirate metrics, it basically starts with a user starting their free trial, or if you don’t have one, it starts with them having a demo. When they use certain features and realize your business’ value or when they decide to buy and start actively using the tool, that’s activation.
Later comes the steps where you reap what you sow during activation. But to do that, you have to make sure your activation game is strong.
And that’s only one reason why user activation is crucial for your SaaS business.
Why Is User Activation So Important?
It doesn’t take a guessing game to figure out all the reasons why user activation matters tons for your business.
Still, let me picture it for you.
Let’s say that you and your rivals can spare a $15 budget for advertising on Google Ads to get one user signup and that you make $30 for every user to become a customer.
Let’s also assume that only 50% of your users who sign up for a trial will upgrade their account to be a customer.
From end to end, the break-even point of your marketing expense:
$30 x 50% activation = the $15 you spent on Google
If you can successfully increase the activation from 50% to 60%, your marketing channel will undoubtedly become profitable: $30 x 60% = $18.
Considering the nature of SaaS companies, you’ll get paid every month from every activated customer. With a low churn rate and high user activation rate, you can keep increasing your marketing budget, stay profitable, and who knows, become the next unicorn 🦄
If my little calculation didn’t do it for you, let me put it this way. There are three major reasons why user activation means A LOT for your business.
1- No activation, no real customer
An activation process is like a book cover. Of course, there will be someone who won’t judge a book by its cover, but a good cover design will surely get you more readers.
Since activation is literally the threshold through which a potential customer or trial user becomes paying customer, if you fail there, you will end up with a teeny tiny customer base.
2- Poorly activated = long-term poor user experience
A SaaS business is serious business. Just as rewards are bountiful, failure may be fatal.
And you don’t want to risk starting off on the wrong foot with your lifeline in the business, your customers-to-be.
When a customer is encountered with a bad activation period – it could be anything from a late Aha! Moment, a lack of an onboarding process, or a problematic purchase experience – it automatically affects the customer lifecycle and lowers the chances of high customer success in the long term.
I say think twice before ignoring your activation customer experience.
3- Low activation rates can be a wake-up call
It’s never a good sign to have low activation rates.
But to look at it on the bright side, it gives you a reason to go over your product to really bring out the value and enhance the customer journeys of not only your new acquire but also current customers.
Once you figure are aware of the problems with your activation rates and check out the metrics I’m about to give you, you won’t be sleeping through that wake-up call.
3 User Activation Metrics You Must Track
Well, there is already a user activation rate we constantly speak of, right?
But let me tell you, there are some other activation metrics that you might want to check out for a holistic view of the proses and more insight into your active user base.
1- User Activation Rate
The obvious answer to the question of “how to track activation?” is, of course, user activation rate.
Using this metric is quite easy too.
First, you need to decide on specific user behavior or milestone task that will define your active user. This could be, as always, an Aha! Moment, using some core features or interacting with certain app experiences.
In a given period of time, if you divide the number or percentage of users that have gone through this activation process by the number or percentage of total signups and then multiply this number by 100, what you get is your user activation rate.
2- DAU/MAU Ratio
Another metric to track is your DAU/MAU or daily active user to monthly active user ratio.
Though this metric is not directly related to activation rates, it is a good way of knowing how frequently users use your product and whether people tend to “fall out of love” with your product.
Basically, the data you get shows you exactly how sticky your product is. If users already fail to get the value during the activation process, the stickiness will plummet.
To measure your DAU/MAU ratio, divide the number of daily active users by the number of monthly active users. This will give you your DAU/MAU ratio.
The higher it is, the better you have performed during activation.
3- Visitor to Trial Users
This is primarily a metric concerned with the acquisition process. But wait, hear me out.
What if I told you that a visitor can be turned into an active customer through your website as well?
Here’s an example of what I mean. Bubble, an app development platform that you might have heard of, does a pretty good job proposing its value to visitors.
That’s right, even before they become trial users.
They use a simple trick. There is a link on the website that takes visitors to a demo environment where users can basically experience a trial. And I know for sure that there have been lots that have skipped the trial and gone to purchase directly.
While this is not considered user activation the way we know it, you can start checking how early you deliver value in the customer funnel.
A simple way of checking this is using an analytics tool like Google Analytics. The higher the number, the earlier you start delivering value.
Advanced Tips to Increase User Activation
When what you are looking to do is not just track user activation but also enhance it, you need more than a few metrics. It’s true, metrics are nice and useful, but knowing the right customer activation strategies is more than helpful.
I have just the right bunch of tips to enhance your user/customer activation.
1- Start Tracking Early
My very first advanced tip is, of course, to use the metrics we just discussed. In fact, they don’t have to be these specific metrics as long as the metrics you employ give you a deep insight into what is going on in the activation step of AARRR.
But one more thing to be careful about at this point is to start as soon as possible and as early on the customer lifecycle as possible. You remember the Bubble example above; you know what I mean.
If you only focus on the time period where users switch to premium you are likely to miss out on much of the user behavior and decisions taking place in prior or later stages.
Very similar to how you’re missing out on all kinds of insight every moment you don’t track activation data.
2- Welcome Messages and Emails Go a Long Way
Let’s talk about something that has possibly the biggest impact on users, yet we don’t give it much thought.
A nice, warm welcome.
Of course, I cannot say that your customers won’t be activated properly unless you welcome them right, but I can assure you, a good personal welcome message with their name on it can do a lot more than you think.
By acknowledging your customers and that they are humans with names, you can create a bond between users and the brand. Don’t believe me?
Reflect back on your own experiences as a customer.
3- Set Users Up for Success with a Well-Structured User Onboarding
The one thing that will certainly hinder you from keeping your users active is a lack of proper user onboarding. And by no means am I exaggerating.
Though things are changing for the better as the years’ pass, there was a time when we would make people get on calls to learn about a product. When they could just try it hands-on themselves, mind you.
Of course, there are still super complex products that require a professional to show around, but my point is, if a product can have a product-led onboarding, then why wouldn’t it?
Especially when we know that 67% of users prefer self-service over talking to a representative.
Onboarding is… a Subconscious Need 🤯
Picture me this. You find a cool product, and according to the website, it seems like the solution you need. You go for it and start the trial period expecting a lot.
What you get is maybe a great-looking UI, and you subconsciously wait for something to pop up.
“And? Where is the onboarding?”
It never does.
You don’t know how to use this seemingly great tool, and it takes you less than 5 minutes of checking around to give up on trying – if the tool is simple enough, that is.
I say take no chances.
✅ Product tours and walkthroughs,
✅ Interactive guides,
✅ Hotspots, tooltips, checklists,
✅ Resource centers,
✅ Powerful analytics,
✅ Segmentation and targeting, and
✅ High onboarding customization
4- Consider Enhancing Activation Steps for Better UX
You’ve got the onboarding flow, you’re tracking it all, life is good.
Not for all your customers.
While onboarding solves one aspect of user frustration, the main user problem might have stayed the same. I’m talking about UX.
However cool your product might be, if its in-app UX is not on par, users take a step back.
Another equally annoying activation problem is overlooking the steps users have to take to become paying customers. You might spend all your resources on enhancing the in-app UX while users can get stuck at the payment step because of bad servers or lack of payment methods.
It’s good to have a holistic view when enhancing activation UX.
5- Drop the Demo, Embrace Free Trials
You might be using a demo-to-paying-customer strategy, or you might not be sharing your pricing publicly; nothing problematic here. There are so many good companies still doing that.
But let me remind you, we are officially in the product-led era.
And that means users don’t want to get direct access to your product before purchasing; they demand it.
I fail to see any reason why we need to be denying them such a chance. Unless, of course, there is something you don’t want users to see before purchasing 🤨
Jokes aside, that just might be how some of your potential customers view your sales strategy. It’s time for a change for the better, folks.
6- Mind Your Customer Support Options
During, after, and even before activation, users might run across problems that require immediate support. To make sure you don’t risk turning users into inactive ones, you want to make sure that there is at least one stable channel of support.
Want to lower the chances of inactivation even more?
Go for a live chat option or any other different communication channel for the sake of keeping things up and running. Can’t afford to get a team running support 24/7?
That’s alright; users prefer self-service anyways. Check out our self-service article for more.
7- Re-Engage Inactive Users
Let’s acknowledge one thing, it is close to impossible to successfully activate all users, especially as you keep growing.
But this doesn’t mean you shouldn’t shoot your shot a second time.
There are, in fact, several great ways of re-engaging users, from sending push notifications to emails and offering cool deals. It’s also a great practice to let users have a special reward for returning or restart the free trial period.
You’d be surprised how many users decide they actually want to buy.
8- Track, Check, and Repeat
User activation has way too many layers to it; the business type, size, industry, and strategies play a crucial role in all decisions about activation. But these few I just mentioned can be used for almost all types of user activation processes.
Once you give them a try and go through with it for a period of time, it is time to start from the top.
A metric wasn’t actually as good as you thought? You want to change the onboarding flow? It worked better with the old pricing page?
This is the step where you consider all these questions and hopefully increase user activation rates.
3 Companies That Successfully Activate Customers
1- Duolingo: Immediate Value
Completely overlooking just how great a marketing stunt the bloodthirsty owl phenomenon was, Duolingo also does a good job at user activation with its great onboarding experience, gamification, and quick first lessons which all come to equal immediate value.
What makes all these so cool is also the fact that Duolingo is normally free. The app has some premium features that can be unlocked by purchasing the subscription, which people find themselves doing thanks to good activation.
2- Grammarly: Re-engagement Via Email
While Grammarly comes off as a pretty chill tool, it still cares about user engagement, and that’s why it does a great job at user activation.
Here’s an email they sent me:
They make user activation and engagement seem invisible next to your personal records and general greatness, or they are just really good at making it appear so. Either way, that’s how you activate inactive users, kudos!
3- Netflix: Super Smooth Sign-Up
Though their recent decisions and strategies have been questionable, there is no denying that Netflix can activate users right.
First of all, the existence of a free trial changes everything. But the real deal starts right after the trial ends. Netflix offers one of the smoothest signups with just 3 steps.
After the purchase, it also sends push notifications and emails to keep the users engaged and reactivate inactive users.
I call that a job done right 😎
User activation is a common challenge to tackle; almost all SaaS companies need to find one way or another to keep users engaged and help them find their Aha! Moments as soon as possible.
Thankfully, there are tons of good ways to track activation, as well as advanced strategies to make sure you create a streamlined user activation process.
Here’s to never going inactive 🍻
Frequently Asked Questions
What does user activation mean?
User activation is a process most remarkably taking part in the AARRR scheme. From business to business, the meaning of activation may vary, but generally, it refers to users finding value in your product or converting to premium from a free trial.
What is a good user activation strategy?
There are tons of good user activation strategies, all customizable for different types and sizes of businesses. But a big winner is definitely paying extra attention to user engagement and user onboarding. It is not often that a product with bad overall UX and onboarding UX gets active users.
How do you calculate the activation rate?
User activation rate has a pretty simple formula, but it depends on the criteria you have set for your specific business. If you were to decide that your user activation milestone is reaching the end of an onboarding flow, then to calculate your activation rate, you’d need to divide the number or percentage of users who have reached this milestone by the total number of users who have signed up. Lastly, by multiplying this by 100, you get your user activation rate.