✍️ Heartcore Consumer Insights
Welcome to the 97th edition of Heartcore Consumer Insights. Curated with 🖤 every two weeks by the Heartcore Team.
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Your activation rate is the percentage of your new users who hit your activation milestone. Concretely: activation rate = [users who hit your activation milestone] / [users who completed your signup flow].
Your activation milestone is the earliest point in your onboarding flow that, by showing your product’s value, is predictive of long-term retention.
Variance in activation rate is high across business models. Marketplaces and e-commerce companies typically have the lowest activation rates because they generally define their activation milestone as the first transaction (i.e. spending money). B2C freemium products have the highest activation rate because their typical activation milestone is low-friction (e.g. starting a meditation session, logging a meal, listening to a music track).
Most common mistakes people make when setting their activation milestone:
Often companies define activation as simply completing the sign-up flow, which alone is unlikely to show a user the value of your product, and thus is unlikely to be predictive of long-term retention.
Marketplaces and e-commerce startups often mistakenly consider “activated” to be when users make multiple purchases. Your activation milestone should be a leading indicator of having built a habit, not having proven the habit.
Selecting an activation metric that’s not easily actionable, measurable, or hard to experiment with.
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Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.