Nov 14, 2022 06:00:00

We asked more than 500 companies such as Soundcloud and Expedia, 'What is the device to increase the activation rate of the service'?

When providing a web service, not only the number of registered users but also the number of active users who actually use the service is important. Investor Lenny Rachitsky explains how to improve the `` activation rate '', which is the percentage of active users among all users.

What is a good activation rate
https://www.lennysnewsletter.com/p/what-is-a-good-activation-rate

Activation rate is the percentage of users who complete the service registration flow and achieve the activation milestone. Activation milestones are goals set within the service that users use. For example, for a health information recording service, 'first record your diet and weight', for a design sharing site, 'first publish and share your design', and for a music streaming site, 'listen to at least 40% of the song first'. are activation milestones.

Mr. Rachitsky said that mistakes that tend to be made when setting activation milestones are ``setting activation milestones too early or too late'' and ``unpredictable long-term achievement. ”, ”Milestones that are not easily achieved”, and ”Operations that are too complex”. For example, milestones such as 'Complete service registration' can be achieved immediately after registration, and milestones that are too late, such as 'Make 3 purchases on the site', take time to complete and new users leave. It may get lost.

“Activation is a leading indicator for new users to stick around and become customers, not long-term customers,” said Latetzky. Defining activations as service subscriptions or multiple purchases defeats the purpose behind activation metrics.'

To get a closer look at activation rates, Latetzky teamed up with management advisor Yury Taimen to survey more than 500 companies, including Soundcloud , Duolingo and Expedia .

Below is a table summarizing the results of Mr. Latezky's survey by product type. According to the survey, the average value of the overall activation rate is 34%, and the median value is 25%. For Software as a Service (SaaS) only, the average activation rate is 36% and the median is 30%.

Activation rate by product type	50th percentile	60th percentile	80th percentile
B2B Enterprise SaaS	33%	40%	65%
B3B Production Consumer SaaS	twenty five%	30%	46%
B2C Freeminium Subscription	40%	50%	65%
B2C free/advertising	twenty one%	30%	63%
B2C Marketplace	16%	twenty five%	47%
B2B Marketplace	twenty three%	26%	55%
e-commerce	15%	18%	20%
DTC Subscription	35%	50%	75%

In addition, about 6% of the companies surveyed said that they set a deadline for the activation achievement target. The median deadline was 10 days, and the mode was 7 days.

In addition, Mr. Latetzky asked each company, ``What kind of changes had the greatest impact when they succeeded in improving the activation rate?'', and classified the following answers obtained from each company into eight categories. increase.

1: UI that users touch first, such as hiding confusing buttons on the top page for new users and reducing the number of 'onboarding' steps that guide users to use the service on their own Keep your UX simple
2: On , such as adding multiple authentication providers such as Facebook, Google, Apple, creating templates that users can easily start, and automatically acquiring information to reduce the burden of information acquisition by users Smooth boarding.
3: Send automatic emails and follow up, such as sending emails introducing movies that explain how to use immediately after users register and sending personalized push notifications for new users
4: Optimize the language presented in the service, such as enhancing user onboarding and assistance education, providing better introductory documentation, and reviewing onboarding messages through customer success interventions
5: Do smarter targeting in the funnel, such as limiting who can register or blocking customers who do not fit the profile to target power users
6: Leverage your sales team to reach out to customers by calling them, communicating one-on-one, and reaching out to users who haven't completed the onboarding process
7: Add incentives, such as offering financial incentives, first-time booking discounts, or shipping discounts
8: The value of the service, such as registering users to the content catalog as soon as possible, revamping onboarding to make it easier for users to understand the benefits, and showing the value of the core product as early as possible in the funnel display quickly

Other personalization features include personalized product tours tailored to the user's objectives, personalization of the initial product experience based on user profile and interests, provision of checklists to guide user action, Using social trust, such as copy such as 'Featured Lecturers', adding surprises, engaging users in the community immediately after onboarding, increasing installation speed, demos in movies, changing the free trial period, gamifying the process , It seems that there were methods such as directing a sense of urgency.

``(To determine the milestone), choose a milestone that is strongly associated with long-term retention relatively early in the new user lifecycle and just execute it,'' said Latezky.