What Does Activation Rate Mean?
Activation rate is the percentage of new users that engage your app/website or complete a milestone through your onboarding process. The formula is:
Number of Activated Users
Activation Rate = ———————————— X 100
Total Number of New Users
A milestone is any activity or event that helps a user start to gain value from your platform and increases their chances of returning to use your product. Usually, the milestone occurs early on in the customer lifecycle but specifics will differ from one business to the next depending on the product and objectives. That could mean a purchase, signup, clicking a link, scanning a QR code, or other usage feature.
So for example, if your milestone is a purchase, you could take the number of users that purchased your product and divide by the total number of visitors to your website. The activation rate is effectively the proportion of people that saw your campaign and responded/engaged.
Persons at the activation stage are new to your brand and product. They may require extra guidance and upskilling to know how to leverage it to the desired effect.
You can improve your activation rate by:
- Tracking user actions by establishing proper analytics tools like Google Analytics.
- Making usage smooth and easy by minimizing potential points of friction.
- Keep it simple. Avoid elements that introduce needless complexity. Minimize the number of steps users need to take.
- Break down the activation process into multiple steps then assess the areas requiring improvement.
Regularly monitor the activation rate to catch any drops early. Consistently low activation rates may imply your sales and marketing campaigns are drawing low-quality prospects. Given activation occurs early in the user lifecycle, underperformance can be addressed with little damage to the business or product.