SaaS Activation Rates: How Video Games Can Help Users See Your Value

What do Skyrim, Last of Us, and Halo all have in common?

Well, for starters, all three are video games.

But more importantly, their user onboarding flow is superior.

Seriously, think about it.

Video games understand how to activate users and hold their attention.

You may be thinking, "Sure, but that's because video games are fun."

That is a valid point, but that doesn't mean you can't apply their traits to increase your SaaS user activation rates.

There are two reasons users sit through video game walkthroughs:

All of this gets users to the point of activation faster.

The point of activation for video games is getting users to understand the basics of the gameplay to start exploring the world, completing quests, and achieving milestones.

What is an activation rate?

Your activation rate is when users realize your product's value.

Think of it like math in school.

You learn 1+1=2. It's nothing revolutionary.

Until you go into the world and need to figure out how to divide a box of Reeses Pieces between you and your best friend.

That's the moment it clicks. All those hours of drilling addition, subtraction, multiplication, and division finally make sense. You can see the value of math class in the real world.

In SaaS, understanding a product's value and activating is when:

In both cases, your product is being used as intended and becoming entrenched in their lives.

The user is no longer dormant. They're activated.

What do key activation metrics look like for different SaaS companies?

Here are some examples of activation milestones:

Why are activation rates important for PLG companies?

When your product is what sells your business, user activation rates are your bread and butter.

It's why 64% of SaaS companies say the main goal of their product analysis is to increase their product stickiness.

You'll never see positive customer acquisition growth if no one sees value in your product. Your churn will increase, and you won't have the foundation to land and expand into enterprise accounts.

But when your activation rate is high, everything else starts to fall into place for your SaaS business.

It signals to investors that you have a healthy customer base who see your value and are engaged in your product. There's proof you can convert new users onto paid plans, and you have a solid onboarding journey to drive retention.

How to calculate your activation rate

Even if math isn't your strongest skill, calculating your SaaS activation rate is straightforward.

Use the following formula, or plug your numbers in with our free SaaS activation rate calculator:

Activation Rate = (number of users who reached activation milestone/number of users who signed up) x 100

Got your percentage? Great.

Now, you're probably wondering, "Is my activation rate good? Am I on par with other SaaS companies?"

According to a study by Opeview, the world's top product-led growth SaaS companies have a 40% average activation rate for free trial users.

But before you hold yourself up to those standards, look at benchmarks for similar companies. It will give you a much better idea of how well you're performing.

Remember, if you're actively monitoring your activation rates, you can make data-driven decisions to increase user engagement and retention.

How to improve your activation rates

Need to give your activation rates a boost? Here are some top strategies to turn those lurkers into active customers.

"If you don't set a direction, all time will be useless."

It's one of those cliche motivational quotes, but it holds up.

Before any great strategy can begin, you need direction. In SaaS, your compass is the user's journey.

"Customer experience maps look at a broader context of human behavior. They show how the organization fits into a person's life."-Jim Kalbach, author of Mapping Experiences

Without it, you'll end up like the Titanic. Meandering towards a giant iceberg with no time to react until it's too late.

But here's the thing.

You can't map your customer lifecycle alone. Bring in other team members, like developers, designers, customer success, etc. Their input will help you identify any blindspots (aka points of friction) and help you focus on what truly matters to the customer.

So, what are these pesky points of friction in SaaS?

It's any aspect of the user experience that creates an obstacle for the user. These speed bumps disrupt how fast a user reaches TTV, retention, and your bottom line.

As you comb through your customer journey, you want to look out for the following:

These are some of the most common points of friction that create barriers to adoption.

Still not sure if your product is frictionless enough? Ask yourself, "Would my mom understand how to use my product?"

Let's look at an example.

At Breyta, we're creating a CRM for PLG companies. However, we're aware that convincing companies to switch from Salesforce to us is a huge ask.

Our solution?

We created a Salesforce integration. It seamlessly integrates with users' current tech stack and allows them to experience the benefits of our product without a huge migration headache.

The result?

A product tour is the secret one-two punch your SaaS start-up needs.

Allow me to explain.

If your business is in its infancy, you may not have the resources to go the free trial or freemium route.

Or maybe you have those PLG motions in place, but you're not seeing any traction.

A product tour is the answer to your woes.

Not only is it less resource intensive, but when you combine it with interactive elements, you're re-creating the video game experience.

Your product tour goes from being a one-sided snooze fest to an engaging piece of content that gives users a tactile experience of your product before making any financial commitments.

…But what kind of results can you expect from a product tour on your activation rate?

"We saw a 20% lift from historical averages in SaaS activation. Over the next few months, Routific's activation rates went over 70%, and the average activation time dropped by over 60%." Dale Williams, former Chief Revenue Officer at Routific.

How can you create an interactive product tour?

Use a tool like Guideflow. It allows you to turn a screen recording of your product into a clickable experience that actively engages users.

You can embed it on your website or share the link in a sales email to give potential customers a taste of your product and lower their resistance towards giving you a yes.

In case you haven't noticed, video games are really, really good at tutorials.

It makes sense.

A tutorial is a gamer's first impression.

If it's overly tedious or doesn't explain the gameplay well, it will negatively affect the player's experience.

What does that mean for the game?

It's the same scenario for SaaS products.

If you fail to create a product tutorial that doesn't help users understand how to hit the ground running, your churn rates will go up, and you won't have an opportunity to grow your customer lifetime value.

The quicker a user can grasp how to use your product, the better for your time-to-value (TTV), activation rates, and recurring revenue.

Here are some tutorial tips from games to make yours as practical and engaging as possible:

What's the biggest mistake most SaaS companies make with their activation strategy?

A once-off onboarding experience.

To see a bump in your activation rates, focus on creating a continuous learning experience.

Lastly, offer human touch where it makes sense.

Sometimes it's more helpful for customer success to step in and educate users than to leave them in the throes of self-education.

How do you know when to step in? Set up triggers for specific behaviors.

Once you have a list of red flag behaviors, you can use Breyta to unify your customer data from various tools, track these crucial actions, and empower CS to take action before churn begins.

Conclusion

While these five strategies can boost your activation rates, data enrichment is one key ingredient tied to your success.

"Not being data-driven makes the work obsolete. It's necessary to have a critical view of the work we're doing, and it would be impossible without data." - Netali Jakubovitz, the Senior Group Product Manager at Maze

Data enrichment ties all your first or raw third-party data together to improve accuracy and help your team focus on the right information. By matching your data with product usage, you can see how different leads behave, helping you pinpoint what attracts your best users and avoid activating the wrong ones.

…But that's not all.

Using your customer data, you can ensure you're designing for the user and not your own tastes.

The result?

A product that represents the perspective of the end user that'll naturally attract long-term customers who will convert and stick around.