27 Apr 2016

How To Activate Your SaaS Users

How To Activate Your SaaS Users

Activating users is of paramount importance for every non-enterprise SaaS. Enterprise SaaS have unique challenges and processes and (re)activation is different.

If you are a self-served or light touch SaaS, read on because in order to scale acquisition and beat the competition, you will need to have a solid activation process.

In this article we will first see what’s activation, why is it important and how to strategically do it. On part 2 that will come out in 2 weeks, we will get more tactical and see the best ways to activate your free trials (or free accounts if you have a freemium plan).

What is user activation

Activation is the second phase of AARRR metrics and what happens inside and outside of your SaaS after acquisition.

In simple words, user activation is when someone signs up for your SaaS and takes the first crucial action to understanding your product and seeing the value in it. The user doesn’t have to pay you to become activated.

In order to understand activation better (especially for mature and complicated products), I’d like you to think of activation not as an on/off switch, but rather as a potentiometer which has values from 0-100.

What does this mean in simple words?

A user is not labeled as either “activated” or “not activated”.

A user can be 0% activated, 20% activated, 100% activated, etc.

This makes sense, because your product might be solving 3 important problems. If a new user understands and uses your product to solve 2 out of those 3 problems, she will be 66% activated.

The more activated a user is, the higher the chance she will buy your product after the free trial ends, or will upgrade to a paid plan and won’t churn to go to a competitor.

Example: Your product activates a user at 80% (the user has figured out how to use your basic and intermediate features to solve 2 big problems of her and logs in and uses the product consistently). After some time she needs to solve a 3rd problem she now faces, but she can’t see the advanced feature you have that solves it.

So, she starts looking for alternatives to your SaaS. She finds a competitor that after a month, activates her 100% (she figures out all of the competitor’s features and how they solve all of her problems). She churns (cancels her account with you) and goes to your competitor.

This is an example of losing a user due to activating her less than a competitor did. Notice that both of you could solve her problems; she just didn’t learn about or figure out your advanced feature in the example above.

Note: Some people refer to -a user coming back to your app- as “retention” and not part of activation. I usually consider it as retention only after a user has become a paying customer. You can think of it either way, whatever suits you best.

I hope this makes sense, but if you have questions, drop me a comment at the bottom and I will clarify.

Now, around 50% of your sign ups will never log in to your SaaS again. However, you can work on the other 50%

What you want to achieve with activation

The best activation happens when each user profile (personas you are targetting) understands the unique value she is personally getting as fast as possible.

Example: You are selling a marketing automation software ideal for marketing agencies and marketing software providers. These are 2 different personas and the top benefit/feature for each one is different.

So, in an ideal world you would segment each one upon signup and move them through a different onboarding process, so you can show them first what’s most important to them.

Since we are not living in an ideal world and the above is easier said than done, we want to activate new users, by getting them to use the most crucial features and showing them how they translate into benefits for them as fast as possible.

This will become much more clear in the “how to do it” section below…

How to activate your SaaS users (strategically)

Now, in order to start activating your users smoothly, you want to get them to use a feature that generally applies to the majority of your target personas. In order for them to use the feature and understand it, a series of steps will be needed.

Let me walk you through an example of achieving activation through onboarding:

For an email software provider with a focus on marketing automation, like Active Campaign, that feature can be getting them to use a pre-built marketing automation template/sequence. In order for the new users to use it, they will have to import some or all of their contacts. That’s a necessary step they have to take before they can use that feature.

When the user imports her contacts, customizes and uses a pre-built automation sequence and starts sending her contacts through it, then the user has experienced the feature.

So, a new user that does nothing is 0% activated. A new user that imports their contacts is, say, 20% activated and one that sends her contacts through the automation sequence is, say, 70% activated. Now the system tells her that she will receive a report in a week with the results.

Note: this new user has experienced the feature, but she probably hasn’t had her aha moment just yet; the moment when it all clicks inside her mind and sees the value of it.

Now, after 7 days the email software provider of the example above will send this new user a report showing her how many clicks she got, open rates, perhaps how many of these contacts downloaded another lead magnet (ebooks, whitepaper, etc) and nudge her to see that all of these happened by setting it and forgetting it.

This will make her see the true value in it, how much more she can accomplish without extra work, by just setting it up once and then forgetting about it.

Then if the user finds this valuable enough, she keeps using the product more and more, achieving higher and higher activation and then converting into a paid customer, entering the acquisition phase.

To decide which features are the most important to show to your new users, regardless of the means to show them (we will see those in my next post), you will have to start with the one feature that is easy, fast to understand and brings in significant results. You want to use that to hook them and have them wanting to see more of your SaaS.

If you don’t get their attention fast, it’s an uphill battle from there…

Summary (to be continued…)

I hope this article helped you clarify what’s activation and why it’s important from a strategic point of view. Now, think how you can achieve it in your SaaS and which features need to be prioritized.

In my next article we will see how-to’s and tactical ways to engage free trials/users and getting them to see the value of your SaaS. Subscribe to my email list to stay tuned (1 email / 15 days).

For any questions, clarification or value-added comments, please comment below.

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