Iterate AI
Dec 10, 2024
Activation of a user is after signing up and logging in. It is the user’s first step to actually using your product.
It is important for product managers to drive users towards realizing the value of your product after signing up or logging in. The metric that captures this is called activation rate.
Activation rate deserves attention because it measures whether users reach a critical milestone in their journey — the point where they first experience your app’s core value.
Read more about what it means and how to optimize it.
What is Activation Rate?
Activation rate is the percentage of users who complete a key action or sequence of actions that signify they’ve experienced the product’s value. The definition of "activation" depends on the nature of your product and the outcomes you expect users to achieve.
For example:
Social media app: Sending a friend request or creating their first post
E-commerce app: Searching for an item by typing in the search bar or adding an item to their cart
Productivity tool: Creating the first project or setting up their initial to-do list.
Activation represents the user moving beyond casual exploration to meaningful engagement.
Why Activation Rate Matters to Product Managers
What’s the point if you are acquiring users but they are not moving beyond signing up?
Activation is a leading indicator of retention. Users who don’t activate are unlikely to return, rendering your user acquisition efforts wasted. High activation rates are a signal that users quickly understand your product’s value and will engage more.
When a user gets activated, it is a point for them to decide if they want to continue to use your product or not and if your app is better than your competitors.
How to Define Activation for Your App
Defining activation involves a clear understanding of your app’s core value proposition. Consider these steps:
Map the user journey: Identify the key steps users take from sign-up to value realization.
Identify the “Aha Moment”: This is the point where users understand the value of your product. For Spotify, it might be the moment a user starts playing a curated playlist; for Slack, it could be the first message sent in a channel.
Set a measurable activation event: Make the activation metric specific and trackable. For instance, in a financial management app it could be linking the first bank account
Measuring Activation Rate
To calculate activation rate:
Activation Rate = (Number of Activated Users/ Number of new users) x 100
For example, if 1,000 users sign up in a week, and 300 of them complete the activation event then,
Activation Rate =(300/1000)×100 = 30% for one week.
Strategies to Improve Activation Rate
Here are four strategies that can be of help:
1. Streamline onboarding for reduced time to value
The onboarding experience makes or breaks activation. Users churn if the onboarding process is too lengthy and when too many details are asked.
Example: With Duolingo, you can select a language and immediately start their first lesson. You can have the sign up process later when a user wants to continue a lesson or start a new lesson.
Tactics:
Minimize the number of steps to complete onboarding.
Use progressive disclosure: show features as they become relevant.
Highlight the first milestone users should aim for.
Pre-fill templates or provide ready-to-use content for faster engagement.
Prioritize performance optimizations to reduce app loading times.
2. Use guided tutorials or checklists
A structured guide can help users understand what to do next and reduce the cognitive load.
Example: Trello uses a built-in tutorial board that demonstrates how to create and organize tasks ensuring they engage with the core functionality.
Tactics:
Offer an interactive walkthrough highlighting main features.
Use gamification, such as progress bars or badges, to motivate users to complete activation steps.
3. Leverage personalization
Tailor the experience to individual users to make activation smoother and relevant. However, it is important to know how much of personalization is necessary before it becomes a friction to get activated
Example: Netflix asks users to select genres and rate a few titles during onboarding. This helps populate a personalized content that is likely to engage the user immediately.
Tactics:
Collect minimal but actionable input during onboarding (e.g., preferences or goals).
Dynamically adapt recommendations or interface elements based on user behavior.
4. Follow up with nudges
Some users may need extra encouragement to complete the activation process or reach the activation event.
Example: Duolingo sends push notifications reminding users to complete their daily lesson encouraging users to reach and complete the activation event.
Tactics:
Use email or in-app messages to re-engage inactive users.
Provide incentives, such as discounts or free trials, to motivate first-time engagement.
Best Practices to Remember When Working with Activation Rate
Here are three things to look for:
Don’t complicate activation events: Avoid setting multi-step or vague activation goals. They should be clear, achievable, and aligned with your app's value.
Don’t ignore qualitative feedback: Metrics alone can’t paint the full picture. Talk to users who didn’t activate to understand their friction points.
Keep iterating: Activation strategies should evolve as your product matures. Regularly revisit your definition and approach to ensure they align with user behavior.
Track metrics over time: Compare activation rates before and after implementing changes.
Segment users: Analyze activation rates by cohort (e.g., platform, source, or demographics) to identify patterns.
Experiment and optimize: Use A/B testing to refine onboarding flows, tutorials, or messaging.
Use IterateAI to set up analytics
Get insights from crucial metrics such as activation rate, MAU, DAU and more with product analytics. Set it up easily without depending on your developer using IterateAI. Schedule a demo today to learn more.