Growth Foundations: User Activation
Welcome to the third installment of our Growth Foundations series. We’ve already covered how tech behemoths harness Acquisition Loops to grow in a viral manner, and how Habit Loops can be a magnet that keeps users engaged. Now, let’s dig a bit into the activation stage of the user journey.
The Basics of User Activation
One of the biggest challenges that software products face today is converting their traffic (both organic and paid) to active users. If potential users are pouring into a product, yet a significant portion can’t activate or engage, the product is essentially burning opportunities. One large pillar of success for any product hinges on user activation.
Defined: Simply put, user activation is when a new user completes a sequence of actions that make them an “active” user of the product. This establishes the first strand of loyalty and engagement between the product and the user.
Different products have distinct activation criteria. For instance:
- Web3 DeFi Applications: A user might be required to connect their wallet and make a transaction on-chain.
- Music Streaming Application: A user might be required to sign in via email (single sign-on) and play a song.
- Project Management Tool: A user might be required to create an account (username and password) and create a project board.
It’s crucial to understand three important aspects frequently involved with user activation. These are user activation, the aha! moment, and time-to-value:
- User Activation: The specific sequence of actions taken that classify a user as ‘active’.
- Aha! Moment: This is the moment a user realizes the value of your product.
- Time-to-Value: The time it takes for a user to reach that ‘Aha! Moment’ and derive value.
Why User Activation is so Important
Beyond mere numbers, strong user activation is necessary if a product wants to grow in a sustainable manner.
Consider two products, both receiving 1,000 new traffic daily. Product A has a 25% activation rate, whereas Product B boasts 75%. Over 36 months, assuming all other metrics remain constant, Product A will have activated 270,000 users, while Product B will have activated 810,000 users. Saying that is a material difference is an understatement. This delta is the difference between raising your next round or achieving financial sustainability.
Furthermore, better activation often translates into deeper user engagement, more loyal users, and potential additional lifetime value.
Metrics — Measuring User Activation Rates
The User Activation Rate can be calculated easily by taking the number of users who complete the activation sequence divided by the total number of users that attempted it, multiplied by 100.
While the world of metrics runs deep, and everyone has their favorite set, I will refrain from adding more here. Perhaps we will do a deeper dive into other important growth metrics in a future article.
User Activation also fits into the broader AARRR framework: Acquisition, Activation, Retention, Referral, and Revenue. While we may dive deeper into the AARRR framework in a future article, you can read my previous posts on Acquisition Loops, and Habit Loops to get an understanding of acquisition and retention.
Tactics for Improving User Activation
Improving activation requires a good strategy, which can include many different tactics. Here are a few just to get your mind warmed up:
- Streamlined Onboarding: Lead users as quickly as possible to their ‘Aha!’ moments.
- Personalization: Tailor user experience to really land with the user.
- Clear Value Propositions: Clearly demonstrate the benefits; good copywriting is key.
- Incentives: Entice users with discounts, rewards, and bonuses.
- Engaging Content: Tutorials, FAQs, and webinars can help guide users in their activation journey.
- Email / Push / SMS Strategy: Craft timely notifications based on the user journey, especially for users who fall out of the activation sequence.
The World of Optimizing Activation
Optimization isn’t a one-off event that is completed and then done forever, it’s a continuous process. One industry standard approach is through A/B testing. A/B testing allows you to test out user responses by splitting user traffic, and forcing cohorts of users to see different versions of the user experience. This data can then be analyzed to see which performed better from an activation perspective. As we venture into the future, AI and Machine Learning promise to revolutionize user activation, offering rapid A/B testing and personalization quicker and better than humans can. While we are still in the early days, tens of billions of dollars are flowing into AI startups and eventually, we will see great AI products that help products improve their user activation.
Don’t Forget the Users!
One of the most important things that is repeated ad nauseam for aspiring growth and product professionals — listen to your users! Tools like Hotjar can provide heatmaps and session recordings, giving you more context on user behavior. However, nothing replaces direct user interactions — surveys, feedback mechanisms, and open channels of communication directly with your users. Sometimes it’s as simple as just getting on the phone with another human and doing some active listening.
Conclusion
The importance of user activation cannot be overstated. It’s a lynchpin to nail if a product wants to actually grow sustainability. Users that go to a product and don’t convert due to bad user activation experience are ones that may never ever come back. We are living in a world in which attention is becoming more and more fleeting, products that prioritize and refine their activation strategies are the ones that will have the chance at sticking around and continuing to grow.
About the Author
Hey, I’m Anthony Bertolino. I’ve been obsessed with start-ups, marketing, product, and growth since a very young age. For the past 7 years I have been focused on Ethereum and the new open global coordination system we’re all building together. Feel free to read some of my other work, and connect with me on Linkedin or Twitter.
