What is Activation Rate?
The Activation Rate (%) represents the percentage of users that complete a specific action defined by a SaaS company as a “milestone.”
Often referred to as the “user activation rate,” the metric enables companies to assess the efficacy of strategies to influence new users to perform specific actions.
How to Calculate Activation Rate (Step-by-Step)
In practice, companies measure the activation rate in order to track the progress of users and their behavior.
The activation rate is a common metric measured by SaaS, subscription-based, and/or online businesses since it tracks the proportion of users that complete a certain task, i.e. a milestone.
Usually, the milestone is an event — most often occurring during the lead generation or onboarding process — that shifts the potential customer closer to converting into a paid customer or increases the odds of the user returning to the app, platform, or site.
The shared feature of most milestones is that the action first and foremost benefits the company economically and can validate that a specific strategy could be viable in the target market.
For instance, one milestone could be the user signing up for a free trial of a product, which means that the user is able to test out the product first, with the end goal being a conversion (i.e. purchase post-trial).