Why Activation Matters
The following is an excerpt from our eBook, “The Heap Guide to Activation.”
It’s the first in a series of blogs that discuss why activation is a critical metric for product teams and what hypothesis-driven product teams can do to measure and increase activation.
Think about a time when you met someone new. Maybe it was the confidence in their handshake. Maybe it was their warm smile, or the friendly back-and-forth banter. Either way, something in that initial interaction made you feel an immediate connection.
When you think about the ways that customers engage with your product, activation is that first impression. It’s the moment when new users form their first impression of your product, and then decide if they want to get to know it better. When activation is done well, it helps users unlock your product’s value proposition by getting them invested early on.
Activation also helps minimize user churn. Not surprisingly, users who find value in a product tend to stick around longer than those who don’t. By getting users to experience the “a-ha!” moment in your product — that critical moment when customers experience the value you’ve promised them — you’ll not only improve net retention, but you’ll also improve the growth of your business.
Being able to identify and understand that something that motivates new users to progress through the next stages of the customer life cycle is precisely why activation matters: it helps you understand what makes new users feel connected to your product and what makes them become loyal customers.
In this blog series, we’ll take a closer look at the role that activation plays in your growth metrics, outline methods for defining, measuring, and improving it, and explore some of our own learnings about activation at Heap.
The role that activation plays in growth metrics
Product managers have multiple metrics to analyze across the customer lifecycle. We’ve outlined some common ones below.
You might know these metrics as “pirate metrics” because of the “AARRR” acronym. In this eBook, we refer to these metrics as “growth metrics.” Each of these metrics represent an important part of your customer’s life cycle. You also need to understand each of these in order to have a successful business.
Most companies can’t improve all of these metrics at the same time. If you’re focusing on all of them at once, it’s difficult to understand which experiments, efforts, and changes drive the most impact.
How do you know where to prioritize your efforts? At Heap, we often tell our customers to focus on one area of the customer journey at a time. This doesn’t mean that you discard efforts around the rest of the metrics, but it does mean that you align your organization around a single goal, and then prioritize that goal for a period of three months, six months, or even a year.
The metric that we recommend our customers focus on most often is activation. Why? Three reasons:
Activation is often the metric that product teams focus on the least. Many people focus on getting new users in the door (acquisition) and then retaining them (retention), but they ignore the critical step in between.
Activation is one of the easiest metrics to improve. Your users already have one foot in the door — you just need to entice them to take the next steps by activating them! Activation is the bridge between gaining new customers and turning them into repeat customers.
If you can get more users active in your product, other metrics tend to follow. Users who are activated will stick around longer, they’ll renew their contracts and make more purchases, and they’ll even recommend you to their friends, colleagues, and strangers on Twitter.
The difference between activation and engagement
We commonly find that people confuse the term “activation” with “engagement.” To highlight their differences, let’s talk about what activation actually means. To quote Growth Consultant Lincoln Murphy at Sixteen Ventures:
“Activation is the moment your customer derives value from your product.”
Why is Murphy’s quote so useful? Because it describes activation as a single moment. Unlike engagement, which measures the frequency and ways in which a user engages with your product over time, activation designates a single event or small series of events.
Another way to think about activation is as the “a-ha!” moment in your product. It’s when your customer first realizes the value that your product provides. Generally, when we think about activation, we’re talking about an activity that happens early on in the customer’s experience with your product or site.
Quick differences between activation and engagement:
Activation: motivates customers to start using your product. It produces repeat visits and conversion. Examples of activation include:
Visiting a certain set of product pages or performing a specific number of clicks.
Using the basic features and functionality of a mobile app.
Starting the shopping process by completing a transaction.
Engagement: focuses on nurturing repeat and active visitors who frequently use your product. Examples of engagement include:
The feeling of being involved in a particular activity.
The period of time during which a user stays involved with your product.
Customers who come back and interact with your site multiple times.
Interested in learning more about how to improve activation in your business? Download “The Heap Guide to Activation” to learn why activation is a critical metric for product teams and what hypothesis-driven product teams can do to measure and increase activation.