why most SaaS companies fail at activation

The top 3 mistakes + how to fix them

In the SaaS universe, the term "activation" often buzzes around, yet its true meaning is commonly misunderstood.

If you're looking to drive user engagement and maximize revenue, a solid grasp of what "activation" really means is crucial.

In this post, I’m going to simplify this complex term and provides practical tips for mastering it.

Activation is the phase where users first realize the value of your product.
The "aha moment" where users decide that your product is worth their time and possibly, their money. (Emphasis on “possibly”)

The problem is that many people equate "activation" with the wrong phases of a customer's life cycle, like signups, conversion, or feature adoption.

These approaches will cloud your strategy and lead you to miss valuable engagement opportunities.

Activation Isn't Just About New Signups

It's About Users Finding Value in Your Product

Signups may inflate your ego, but they don't necessarily indicate success. If users sign up but don't engage with your product, you're missing the point of activation.

What you need to do:

Look Beyond the Numbers: Don’t fixate on just the signup numbers; focus on metrics that show user engagement.

Simplify Onboarding and Offer Quick Wins: Make the onboarding journey as seamless as possible to help users find value quickly. Provide a fast route for users to achieve something meaningful within your app to encourage deeper engagement.

If you view activation as new signups then you risk overlooking critical engagement metrics, leading to a leaky funnel and lower retention.

Activation Isn't Adoption

It's Reaching the First Level Feature Usage/Breadth

Contrary to popular belief, activation is not about getting users to use every feature you offer. It's about them engaging meaningfully with at least one key feature.

What you need to do:

Identify Your ‘Golden Actions’: Find out which action/s most often lead to the "aha moment" for users and focus on it.

From Empty to Engaged: A well-crafted empty state is like a friendly tour guide, helping your users navigate your product and guiding them towards the ‘Golden Actions’. (See full post about empty states here)

Analyze and Iterate: Use analytics to check if users are reaching this feature and make adjustments to the user journey as needed.

If you view activation as conversion then you miss the opportunity to optimize for value realization.

Activation Isn't Conversion

It's the Steps Before Users Become Paying Customers

While the ultimate goal is to convert a user into a paying customer, activation is the bridge you must cross to get there. It's about giving users a reason to stick around long enough to consider upgrading.

What you need to do:

Nurture, Don’t Hard Sell: Provide value before you ask for a commitment. When users experience the value they’re after, the upgrade is an obvious next step. Success comes before sales.

Offer a Taste: Let users explore what you have to offer. When you build your freemium or free trial around activation (users experiencing value) the path to conversion becomes way more natural.

Highlight the Benefits: Make it super clear how upgrading will unlock more value.

If you view it as adoption then you distort the focus and priority on initial value.

Conclusion

Understanding activation - what it is and what it isn't - will pave the way for smarter growth strategies for your company.

It’s not just about amassing signups or rushing users toward payment. It’s a nuanced phase of the customer journey that, when executed right, will lead to increased engagement and higher revenue.

Focus on showing real value, guiding users toward key features, and nurturing them toward conversion.

Thanks for reading!

See you next week :)