What is Activation Rate?
The Activation Rate measures how many visitors are engaging with your website or app. Activation can be defined several different ways depending on your business including number of clicks, time on website, pages viewed, downloads, email/blog subscription, or even a trial signup.
The Activation Rate can be any action that will lead a visitor to a return visit (retention). This startup metric measures the first experience a visitor / potential customer has with your product/service/app.
Advice from VCs: Why Activation Rate is critical
“The top three metrics that are most important for early startups to track are active user numbers, 2nd month retention, and engagement rates. Do customers just open the product or do they actually use it?” - George Northcott, Co-Founder and Head of Business Development at Founders Factory
How to calculate Activation Rate:
(#) of website sessions / (#) activities completed = (%) Activation Rate
Calculating your activation rate is straightforward as long as you know what activity you’re tracking. Simply divide the number of website sessions by the number of activities completed to determine your activation rate.
Since there are multiple activation opportunities (e.g. viewing X pages, downloading an ebook, subscribing to an email list, signing up for a trial/demo, and basket conversion for ecommerce), then you can calculate this metric two different ways: 1) separately for each activity using only the sessions from the specific page(s) the offer is listed, or 2) all the activities combined using all the sessions for the entire website.
Below are a couple examples of how you might view Activation Rate on your startup CEO dashboard.
This broad metric is helpful in determining how well optimized your website or app is and shows potential opportunities for greater sales. A higher activation rate generally means three things:
- you’re attracting the right audience for your product or service;
- your copy and messaging/calls to action/graphics/etc. resonate with your audience; and
- you’ve made the user’s journey easier, more intuitive, and more compelling.
Improving your activation rate starts by improving the user experience.
A lower activation rate could be caused by a variety of issues including a slow page load time, a broken form, irrelevant or boring copy, attracting the wrong audience, or not enough perceived value in your offer. Tracking your Activation Rate creates an opportunity to spot where improvements are needed.
If your website/app session numbers are low, then you shouldn’t get too caught up in Activation Rate, as it’s not a strong enough sample of data to accurately determine the impact of various changes. Instead, focus on increasing sessions before improving Activation Rates.
Relevant Startup Metrics and KPIs:
If you’re adding Activation Rate to your Startup CEO dashboard, you might want to also consider tracking these related startup metrics for context.
Activation Rates will vary massively depending what the activity is. For example, the activation rate for downloading a free piece of content is likely to be higher than it will be for a paid purchase. It’s best to track different types of activity separately using a feature like goals in Google Analytics.
Activation Rate is a broader version of the marketing metric Website Conversion Rate.
Want to create a startup CEO dashboard using this metric? Check out this example CEO Metric Dashboard.