What is User Activation and How to Increase It for SaaS

Are you getting lots of traffic but only a small percentage of them actually turn out to be your customers?

Success comes when we acquire and keep active users. Let me introduce you to the term user activation.

Almost every newly-established and growing SaaS companies spend their effort mostly on acquiring new users and getting them into the sales funnel. Then, attracting users to be loyal or long-term customers becomes involved as a second important phase. That is normally how it is supposed to be.

Turning new users into long-term customers should be achieved by helping them reach their aha moment. Furthermore, users demand to make sure of receiving an advantage with your product. It exerts huge positive effects in return.

However, most companies are failing to pay adequate attention to user activation. The main claim here is that activation plays a major role in user acquisition and sales itself. In this article, we are going to evaluate how accurate this claim is.

Also, check out our definitive Product Adoption article for SaaS to turn activated users into your fans!

What is User Activation?

What is user activation?
Image source: AARRR startup metrics from Startit Up

We can define activation with important milestones that your visitors go through their journey to become your customers. Depending on your business, user activation steps may include the number of clicks, time on your website, pages viewed, creating the first Kanban board, inviting a teammate or creating the first product tour.

Activation is the second stage of the famous AARRR metrics. After the acquisition at which users find you, they experience your product for the first time and then decide whether it is worth coming back. Briefly, visitors achieve the value you promised in the activation step. It states the percentage of activated users out of acquired ones.

The Activation Rate is the numerical measurement of how many visitors are engaging with your website.

Why Does User Activation Matter?

Let’s think about a scenario 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.

And because of 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 become the next unicorn ?

Consequently, it is highly crucial to do a proper approach and to make a detailed evaluation of the activation stage. It allows us to track numerical data of user action. Furthermore, it truly helps us determine the marketing budget and analyze the problems until this stage.

How do you increase user activation?

Now that you understand the importance of user activation and the concept it refers to, you’ll obviously want to increase it. Here are 6 ways you can try and increase user activation.

increase user activation rate

Track the customers’ actions

You need an efficient analytics tool to track how many people are engaging with your business. You should be aware of the number of newcomers and returned users. If you have a meaningful knowledge about the people’s interaction with your website, you have the chance to make them more engaged later.

Start with tracking the activities that your most loyal customers do so that you can map out the ideal flow for your customers. The analytics will give you an idea about customer drop-off. Through these steps, you can understand at which point the people are struggling to activate.

Design welcome pages and emails

The first encounter with your page can be awe-inspiring for your customers. Starting with a warm greeting is always a good idea. For a good onboarding experience for your customers, show them that you open your arms for them.

A welcome email is another thoughtful way to engage your customers. Especially if you set an automated personalized email for all of our sign-ups that welcome them and give them some instructions, it will be more likely for them to stay with you.

Welcome emails allow you to communicate directly with your customers and to give them a secure mechanism to send their requests. It is a great way to build trust with your customers.

Introduce your product

After the first welcome and sign-up, your customers are ready to go. At that point, you should not let them get confused. Make them get to know about how you operate your business. You can add product tours on your website or application to introduce your products and services. Short copy and sequential steps are two of the examples of useful product tours.

Training sessions can make your customers actively engaged with your product. They can learn the complex sides of your product and the ways that you deal with your customers’ problems. You should organize unique training sessions according to the specific needs of the business.

PS: A no-code product walkthrough software such as UserGuiding is perfect for that.

Make the activation options simple

People don’t want to spend time to figure out the offers. If you are interested in reaching a high activation rate, you should make it easier for people to reach your service. You should always use a simple yet effective UX in terms of design and utilization.

Avoid registration forms at unnecessary length because customers are unwilling to fill them. Cut down the number of steps that your customers need to go through. You should also make your language clear and action-oriented.

Using proper visualization is another way to ease the design of your page. Use catchy and simple images instead of eye-straining ones. Scrolling and page performance are also the factors that you should consider. You should take the needed measures to navigate your users quickly.

user activation in free trials

Give trial periods

Using a trial period is a useful way to increase your activation rate and remind your customers that you are there and ready to provide all your services. Set a time limit for your customers to attract their attention and increase their further interest.

You should use short trial periods and send reminders of expiration so that your customers can see what opportunities will be lost if they do not take action.

You are also supposed to convert free trial users to your customers. Make sure you check out our 5 Ways to Increase The Free Trial Conversion article.

Simple, Affordable, and Powerful User Onboarding Software.

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Provide a good support service

Providing good support to your customers is a vital way to ensure a high activation rate. It is almost the key to every type of customer satisfaction. The more you are ready to help your customers at any time of the day, the more activation rate you get.

You should be flexible when it comes to customer support. Through various channels such as phone calls or chat, be ready to offer them help without time and place limits. Remember that the satisfaction of one customer will attract others.

You can increase your activation rate today with any of these tips. Do not be hesitant to put effort into making the customers love your product and service for long term success.

Frequently Asked Questions

📝 How do I calculate my Activation Rate?

Your activation rate is the percentage of your users that achieve success(an action you want them to do) to all of your users.

✔️ What is a good Activation Rate?

Activation rate varies according to industry, budget, and customer base. A good activation rate is the one that brings you plus revenue.

📉 Why is my Activation Rate low?

You might be offering your users a practice of bad UX, like long registration processes or poor user onboarding.

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Selman Gokce

Selman Gokce is the Senior Inbound Marketer of UserGuiding. He is highly invested in user onboarding and digital adoption, especially for SaaS, and he writes on these topics for the UserGuiding blog. When he's not writing, you can find him either listening to LOTR soundtracks while cooking or getting angry because he lost in a video game.

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