What is User Activation and How to Optimize it for SaaS Companies
Are you dealing with a customer base that doesn’t interact with your brand as much as you’d anticipated?
You’ve come to the right place.
Today, most businesses can increase the number of their leads using a variety of marketing strategies, however, ensuring that these are high-quality leads that will interact with your business is not guaranteed.
In this article, I will talk about what “User Activation” is and how you, as a SaaS product marketing leader, can better utilize the means you have by increasing the interaction you have with your already existing customer base. This article will work as a SaaS guide for increasing your user activation.
What is User Activation?
User activation is the second step in the Pirate Metrics list (AARRR):
Users are “activated” when they understand the real value your product provides by using a feature of your product, which makes them want to subscribe to a monthly plan. What makes a user activated depends on the SaaS and historical data.
However, do not mistake this for the “aha Moment” where customers realize that your product might be useful for them. The aha moment is just knowing that your product might help them in their daily lives while activation is them deciding your content is worth subscribing to.
The Activation phase is not only a phase where you get customers but also a milestone for your company. An important portion of your revenue will be made depending on how many user activations you have. This step is hard due to the fact that you have to create a certain community beforehand. If you are interested in the process customers go through from being acquainted with your work to becoming full-time members, you can check out An Ultimate Guide To SaaS Marketing Funnel.
Now, let’s look at the potential benefits of User Activation.
1- Reduction in Expenses
We all know that reaching new leads can be expensive. Well, you’ll be glad to know that user activation can actually help you with expense management. You won’t have to spend too much time on reaching out to new potential customers as you’ll already have a few prospects in the pipeline. Besides, acquiring new customers costs far more than retaining or activating current leads so user activation also makes sense from a monetary perspective. I am pretty sure that you have heard the famous Steve Jobs quote:
“One home run is much better than two doubles.”
2-Possibility of Long-Term Commitment
It is possible that an individual might not be interested in the product you try to present them. However, you can be pretty sure that an individual who has become acquainted with your product has a higher chance of becoming a long-term subscriber. This is quite important for brand awareness, since a customer that likes your product will be inclined to share it, and brand loyalty which directly correlates to higher subscription rates for the service you provide for your customers.
You can use user lifetime value, one of the most important SaaS metrics, to better understand whether or not investing in certain customer types would be profitable.
3-Contributes to Growth
Big companies are not valued by how many clicks day get in a week but by how many new subscriptions they get in a quarter. I will put some of the statistics for websites that you might know:
- [Netflix has roughly 209 million subscribers as of the second quarter of 2021](https://www.insiderintelligence.com/insights/netflix-subscribers/#:~:text=As of Q2 2021%2C Netflix,same time period last year.)
- Amazon Prime had around 200 million subscribers in 2019
- [Disney+ had 116 million subscribers in the third quarter of 2021](https://www.statista.com/statistics/1095372/disney-plus-number-of-subscribers-us/#:~:text=The Walt Disney Company reported, the fiscal year of 2020.)
By tracking your user activation rate, you can understand how your company grows as new leads are activated. With tools like HockeyStack, you can also dive deeper and check out your each customer’s journey to identify points at which they are the most likely to convert or be activated. This will allow you to have amore fluid user onboarding process as well as increasing your user activation rate.
What is the Average User Activation Rate for SaaS?
By the Average User Activation Rate, we mean the percentage of the people that go on and take certain actions by utilizing the options you present them. The problem with this is that this rate changes according to the milestone, meaning that two apparently similar companies might have vastly different activation rates depending on what they refer to as an activated user.
For this reason, it is almost impossible to calculate the average user activation rate for SaaS. That said, to track progress, you can always calculate your own average user activation rates and compare them to the ones you had before. This will help you to monitor the gradual development of your company and user activation over time.
How To Increase User Activation Rate for SaaS
Here are a few surefire tips to improve your user activation rate:
1- Improve Your User Acquisition Efforts
Getting someone to click on your website and perform certain actions can be hard. However, employing the right tactics such as improving navigability, using clear fonts, and being consistent with your messaging can ensure that more high-quality leads go ahead with the acquisition stage. This will increase your users’ activation rate.
2- Offer Incentives to Your New Users
You probably know that many companies that make their revenue through the subscription model offer certain incentives to their users for them to be full-time subscribers. Free trials are a great way for new users to get familiar with the service you provide for them.
Needless to say, it’s also important for you to show how your products or services add value. Since your customers will probably have plenty of other options, it’s imperative to talk about your USPs so that you don’t lose business to your competitors.
3-Personalize Your Relationship
Even the simplest efforts at personalization can go long way. To put things in perspective, think of the last time you saw a “Good Morning Mr. X” message pop up when you logged in to a website which you already created an account on.
Personalized email marketing is also a good option to increase user activation rate. Your aim should be to reach as many customers through as many mediums as possible. This will make a great difference in your market reach. You will see the results of these in both user activation rate and your appeal to the new customers.
4- Use an analytics tool to track your users’ behavior
Utilizing tools aimed at analyzing the patterns of your potential and already existing customers is a great way to increase user activation and find out about your shortcomings. Many companies like Netflix not only offer personalized suggestions but they also transform themselves for the whole community with the feedback they receive from their subscribers. This interactive relations also underline how your brand will be perceived by the wider public.
In addittion to utilizing analytics tool, you can also utilize product adoption tools to increase your user activation rate.
5- Make your onboarding flawless
Your interface should be functional and easy to navigate. Despite this, if a prospect has any issues finding the information they need, you’ll need to ensure that you answer their questions properly.
But that’s not all there is to good onboarding.
The entire process before a customer even signs up for your product or service should also be simple. If you check any one of the Top SaaS marketing agencies, you’ll notice that all of these companies are easy to contact and promote communication through simple and effective calls to action and forms. You should also produce a smooth user onboarding process for your target audience. To do so will not only help your user activation rate but will also help you increase your other marketing metrics.
6- Provide excellent customer service
An important way to create brand awareness is to improve the quality of your customer service. Your customers need to receive relevant solutions to any problems they encounter, this is one of the fundamental points of any user onboarding strategy. This way, you increase the likelihood of being their top priority.
It’s also important to accommodate feature requests and incorporate any other suggestions that your customers may communicate to customer service representatives. This will make your customers feel valued and can increase their overall perception of your brand. You can utilize content marketing attribution to better understand the process your customers go through while talking with your team before making a purchase.
7-Schedule 1-1 Video Demos
Creating demo videos and explaining the purpose of your product through them can prove to be useful since video demos can be a great starting point for leads interested in your product. You must understand that it is important for your potential customers to see exactly how they can use the product so it’s important to cater to a variety of use cases. Small steps like these that are aimed at increasing your user activation rate can also result in a rise in your marketing reach.
User activation is an essential metric and a key milestone in your journey as a SaaS company. Reaching out to your audience and making them become active members is a must in the digital era of today. Follow the tips mentioned above to improve your user activation rate and start maximizing growth today!
Here is the short equation you can use to calculate your user activation rate.
[Number of users who complete the set milestone/ Total number of users who signed up]= Activation rate
Your activation rate might be low because of your website’s complicated interface, visual friction, unnecessary forms and technical language, all of which make activation progress more complicated for your visitors.
Activation in product management usually refers to the process that happens in the launch and the time period after that. Modifications to the system can be made so as to increase the activation rate you already have with the potential customers that have already become acquainted with your company.