A user logging into your product on day 3 does NOT mean they’ve got value
This article is for you if you’ve got sign-ups but you want to ensure people are getting value related to the core purpose of your product.
Converting from a free trial to a paid subscription does not signal activation.
(And why you should be focusing on activation as a real metric for your startup).
Back when I worked in-house for the online learning platform, we were running a SaaS platform with a free trial component. It was a super small team, which meant I was marketing/product/growth all in one, and didn’t really get the time to dig into some areas on the subscription marketing side of things that I had hoped.
When it came to looking at what engagement with the platform was, I believed that these were some of the stats that I needed to report on:
Person creates a free account
… goes onto log back in on day 3
… watches 2.5 mins of a course
… doesn’t cancel auto-renew subscription.
These stats were based on the following assumptions:
1. Someone going onto create a free account that requires a credit card upfront surely must be sales-ready.
2. Someone who logs back in on day 3 surely has spent the last few days truly engrossed, thinking about our startup. They’re only logging in now because they’ve been busy.
3. Recording someone who watched 2.5 mins of a course must clearly indicate engagement because that’s what Netflix reports on, right?
Don’t worry, I’m not even going to acknowledge the last point about renewing.
What could we go onto to do with this information? Nothing. Nothing at all.
The aha moment behind what activation actually means.
But then something changed. I realised, following a chat with a founder, that we needed to record events and/or actions that were related to the core purpose of the product.
At this time, the core purpose was to get more people feeling confident in work facilitated by watching our content.
Funnily enough, recording the number of people who had logged back in on day 3 wasn’t going to show us this.
What is activation and why is it important to your startup’s growth?
Activation is all about someone realising the value in your product. It’s connected to the core purpose of your product.
It’s not about people creating an account or clicking this button or that. It’s an event or series of events that will go onto to indicate repeat usage and some lovely renewals.
Stats show that it’s worth focusing on these people who reach activation because they’ll likely retain at a rate of at least 2x better than those who do not.
How to identify what your activation signal is
There are different ways this signal can manifest itself.
An activation signal (or milestone) according to Lenny Rachitsky is:
“Highly predictive: It should be predictive of long-term value delivery to the user, which often manifests itself in long-term retention, monetization, or both.
Highly actionable: The metric needs to be something growth teams can directly impact. For example, for a multi-user SaaS product (e.g. Figma), teams often set their activation metrics on workspace- or account-level actions (e.g. “workspace with 10 items created and 2+ active editors by W4”) vs. a user taking action.”
Examples of activation signals on products I have worked on:
Online learning platform - creation of playlist, watched three courses, spent x amount of time in platform
Sales training CRM - putting notes in following a meeting, adding three contacts and completing a meeting
Examples of companies you’ll likely know (but not as close to home):
Loom - sending a Loom video and end user watches
Zoom - conducting online meeting
The steps I followed to identify the activation signal for our startup
Around the time I learned the importance of connecting activation with the core purpose I came across the jobs to be done framework.
I’ve written about using Jobs to be Done in marketing loads, so I won’t go into detail. But where using this perspective was useful in this context was the following:
I was given a new lens to look at what customers were expecting to see and do
I learned that actually it’s about desired outcomes and what what they wanted to go on and achieve
Not every user is equal. This process started the conversation around the need to dig into our ideal client profile.
As a result of this, a few steps were implemented:
Interviews were booked with every paying customer to identify what they were expecting to be able to go on and achieve
We changed some of the onboarding process to ask more qualitative questions.
How to increase the activation rate of your startup product
There’s been a lot written about the myriad of ways to increase activation rates within your software platform or app. I’m not about to reinvent the wheel.
But what I do find most useful is taking a holistic approach, especially before you decide what tactic to use (and why).
Here are some of the most common ways to increase your activation rates:
UX/UI copy and design - e.g. remove copy, add copy, make the button bigger!
Nudges - in-app notifications, whatsapp messaging, email marketing campaigns
Offer a discount or access to a certain feature
Onboard people yourself - especially at the early stages of your product’s development
The important part: deciding which tactic to use is near on impossible when you haven’t dug into the weeds to understand what journey your ideal customer will take.
Want to learn more and dig into what your activation signal is or how to improve it? Contact me for a chat. Alternatively, read my breakdown of how edtech Duolingo uses product-led growth to create great engagement marketing.
