Is it difficult to activate new users? Learn these 6 tips to improve user retention!

User activation is the first step after acquiring users. It is one of the key tasks of the growth team. To achieve geometric growth of users, growth personnel need to determine the goals of the new user activation stage and find the Aha moment.

Many people who work in growth regard attracting new users as their first goal, and even believe that attracting new users is equivalent to growth. However, even if you calculate the conversion rate of each step in the AARRR model, you will find a tragedy - 95% of users may have already been lost. In such a situation, we should stop and reflect that the current priority may not be to attract new users with a large budget, but to solve the fundamental problems of the product, that is, to let users experience the value of your product for the first time, complete key behaviors to retain users, and thus improve the overall funnel conversion rate .

Most companies do not pay enough attention to activation, which also means that most products have a lot of room for growth in the user activation stage. So how do you find the growth point?

We might as well ask ourselves:

Why do users continue to use your product and why do they leave? Is it because of the product’s special features or the good experience?

What functions are the remaining users using, and where have the lost users gone? Can the product meet the needs of users and can it be used quickly?

The following figure simply draws the activation retention curve that occurs after a new user experiences the product:

When we acquire a new user from a channel, the new user becomes a retained user after experiencing the value of the product. If he or she develops a habit and finds this function useful, he or she will continue to retain the user, thus completing the retention of the new user stage. After continuous experience and dependence, users who are deeply involved may discover more product value or other product features, thus retaining old users .

On the contrary, some users are not satisfied with the product functions. After the product is iterated and the functions are improved, the lost users can still be recalled to experience it again to achieve recall and retention.

Let’s take Alipay as an example and break down the activation and retention methods. Let’s first think back, when was the last time you used paper money or bank cards to eat? When we use Alipay to complete a transaction for the first time, will we find it novel and convenient? Can we get red envelopes?

After attracting new users, Alipay activated them through subsidies, and continued to cultivate user habits through online payment and offline QR code payment. Gradually, the user groups using Alipay to pay include young people, middle-aged people, and even the elderly who do not know how to use smartphones.

1. Pain points and solutions for new user activation

When we practice new user activation, it is easy to encounter the following problems:

(1) Without a clear goal, many attempts are made but it is impossible to determine whether they are effective.

If you are in situation 1, we can give new users a clear purpose for activation by analyzing AHA moments and measure the effect based on activation indicators.

(2) We have a goal, but we don’t know how to find clues from the data to increase activation and improve the success rate.

If you are in situation 2, we can find activation clues from the data in quantitative and qualitative ways: activation funnel analysis, new user excitement index analysis, etc.

(3) After getting the clues, there are no reusable solutions and ideas to improve activation

If you are in situation 3, we can refer to best practices, improve activation, and continue to reuse after finding the growth pattern.

2. Use exciting moments to identify new user activation goals

Aha moments (AHA moments) usually occur when new users first experience the value of a product. Aha is an emotional expression that represents a strong enough first impression of the product on the user, surprising the user and laying the foundation for the user to continue using the product in the future. Whether a user experiences an exciting moment determines whether the user will become a retained user of your product or a lost user.

Generally, we can find the differences between retained users and lost users through differentiated behavior label data analysis, find the core demands of users, and then use products or operational means to meet the core demands of new users as much as possible, thereby completing activation.

2.1 Activation time formula

2.2 Activation time assumptions

1. The product has long-term value for users and reaches PMF status.
2. Through certain key behaviors, users can quickly feel the value of the product (new users have limited attention and stay time, so we need to find the most critical behavior to allow more new users to feel the value faster, not all new users need to feel all the value of the product).
3. New users who perceive long-term value are more likely to stick around.

The essence of activation moments is to use simplified behavioral data to simulate the moment when users first experience value.

Simplified behavior:

• In actual business, new user activation may be caused by multiple behaviors. Different people may have different behaviors, perceive different values, and activate at different times.
• The activation moment is to find the most likely activation behavior for most new users , so as to find a clear behavioral goal for the new user activation plan.

The simulated value:

• The activation plan must allow users to feel the value of the product and benefit from it;
• To push users to reach the activation moment, we cannot simply and mechanically force users to do certain actions, but we should simulate the moment when users benefit as much as possible.

3. How to find the activation moment of new users

If the product you are currently responsible for only uses simple registration and login as activation criteria, you will find it difficult to find a point of entry to improve the current product retention. These two behaviors rarely make users feel the value of the product. We should look for Aha moments that can truly change user retention.

4 steps to find the moment when new users activate:

3.1 Step 1: Propose Alternative Activation Behaviors

• Identify the long-term value of your product;
• Find the way for new users to quickly experience long-term value when they start using your product.
• According to the above method, several most likely candidate new user activation behaviors are proposed.

Identify alternative activation behaviors through qualitative analysis:

(1) Through key questions

• who: Who is the user?
• What: What problem do users want to solve with this product?
• why: Why should the user solve this problem?
• Vs: What other ways do users have to solve this problem?

(2) Through user research: Compare the responses of different users to discover the most important value of the product to users and find alternative activation behaviors

• Long-term most active users : Why do they find the product valuable?
• Users who leave quickly after registering: Why do they leave quickly?
• Active users after registration: Why do they stay? What actions did you take as a new user and what were the key experiences?

3.2 Step 2: Find the activation behavior (the behavior with the strongest correlation with retention)

From several alternative activation behaviors, find the early behavior that has the strongest correlation with early retention.

• Principle 1: The higher the frequency of use, the sooner new users expect to gain value from the product. The activation period of new users can be predicted based on the frequency of use.
• Principle 2: The shorter the life cycle, the sooner new users expect to get value from the product;
• Principle 3: Analyze the actual data of new users and look at the time window when most early activation behaviors occur.

Find activation behavior through quantitative analysis:

Find the activation period for new users : assess how quickly activation occurs;

Find activation behavior : Compare the early retention curve to find the behavior that has the greatest impact on early retention during the activation period of the new user.

Example: Draw new user retention curves for different user groups

Compare the retention curves to find the behavior that is most correlated with retention:

1. Judging from the 30-day retention rate, [Use special effect elements within 3 days of installation] has the best retention performance, while [Use text within 3 days of installation] has a slightly worse performance, which shows that the special effects are more attractive than text.
2. In the first three days of user activation, the curve of [Using special effect elements within 3 days of installation] is better than others.
3. The 30-day retention curves of [Using special effect elements within 3 days of installation] and [Not using special effect elements within 3 days of installation] are most different. Judging from the completion of [Using special effect elements within 3 days of installation], it may be the indicator with the strongest correlation with retention.

Therefore, it can be concluded that [using special effect elements within 3 days of installation] is most likely to be the Aha moment.

3.3 Step 3: Calculate the magic number

Why calculate magic numbers:

• For some activation behaviors, just one time is enough, such as the magic number for e-commerce is completing the first purchase;
• Some activation behaviors need to be repeated multiple times to ensure that users feel the value of the product, such as TikTok;
• In theory, the more repetitions you have, the greater the improvement in retention. However, the activation time of new users is a priority, and it is unrealistic to ask users to repeat actions too many times;
• Therefore, we want to find the optimal number of activation times to ensure that users get value without placing a burden on them.

Magic number calculation method 1: Maximum marginal utility method

• Draw a distribution chart of the number of activation behaviors of new users on the first day
• Analyze the relationship between the number of activation behaviors on the first day and the retention rate on the second day
• Find the number of activation behaviors corresponding to the point with the largest retention marginal benefit

Calculating the Magic Number Method 2: Venn Diagram

Goal: Maximize the intersection of users who have taken this action a certain number of times and retained users

Note: Magic numbers are not absolute.

• Magic numbers are correlated, similar behavior may occur in multiple statistical forms
• It only represents the statistics of most users and is the turning point for most users
• In the future, the indicators can be further refined according to different user portraits to make them more accurate and targeted.

3.4 Step 4: Testing and Verifying Causality

Correlation: Users who have observed a certain early behavior have a higher retention rate

Causality: The user took some early action that led to a higher retention rate

Correlation ≠ Causation

In the above three steps, we only found the correlation between Aha moment and retention. Next, we need to use AB testing to let more people trigger Aha moment and observe whether retention improves to prove the final causality.

4. Identify new user activation leads

4.1 Quantitative Analysis: Activation Funnel

Through quantitative analysis, we can find out which step of the new user activation funnel has the highest churn rate, and make operational and product optimization strategies for this link.

4.1.1 Step 1: Clarify activation indicators – activation rate

New user activation rate = the rate at which new users reach the aha moment within a certain period of time.

The activation rate can help us quantitatively measure the aha moment and is also the North Star indicator for new user activation.

4.1.2 Step 2: Sorting out the new user process

Document the entire new user experience from beginning to end, using a mobile app as an example:

New user activation full-chain funnel: external channel exposure and attraction → app store download → first app opening → registration process → first login → activation and product experience;

New user activation product funnel: APP first opening → registration process → first login → activation experience product.

4.1.3 Step 3: Build a new user activation funnel

Supporting behaviors: Users must complete supporting behaviors to reach the aha moment, but these behaviors do not allow users to gain core value.

Principles for handling supportive behaviors:

• Get straight to the point: One extra step can lead to user loss, so reduce unnecessary support activities and speed up users to reach the aha moment;
• Weigh the pros and cons: Although a few support behaviors delay the aha moment, they have long-term benefits and can be retained, but they need to be optimized to find the best way to reduce user churn.

4.1.4 Step 4: Analyze data and find clues

How many steps are there to activate a new user? Can unnecessary steps be removed? Is it possible to adjust the order?

Which steps of new user activation have the highest churn rate? What are the possible reasons for the high churn rate?

• Through path analysis, we can understand what the user’s real path is.
• By activating funnel segmentation, can we understand whether the churn rates of different segments are different?
• Understand the user activation speed through interval analysis of the activation funnel?
• What are the reasons behind this through user research?
• Use click heatmaps to understand what elements users click first?

4.2 Activation Funnel Nine Dimensions of Grouping

By activating funnel segmentation, you can understand whether different segments have different churn rates.

User portrait: Different user portraits

Customer acquisition channels: different channel sources

Device: Mobile phone or PC

Product line: APP or mini program, low-priced product line and high-priced product line

CRM channel: whether to receive different push notifications and emails

Red envelope subsidy: Are there any red envelopes or subsidies for new users?

Demographics: different countries, cities, ages, genders

Customer service interaction: Did you interact with customer service?

Social interaction: Do you participate in social interaction?

4.3 Finding activation clues through agitation index

When new users first discover and try a product, they often feel a sense of "excitement" about trying something new. A product’s activation flow and interaction design can raise or lower user excitement.

Excitement Index: It is a measure that uses qualitative analysis to understand the experience of new users and roughly assess the user's excitement level. Through this criterion, it is possible to find elements that bring positive or negative emotions to the user experience.

5. Sort out activation ideas through user behavior formula

User behavior formula: Behavior = (motivation - resistance) x boost + reward

Behavior : The behavior you want users to complete

Motivation : How much the user wants to complete the action

Friction : How difficult is it for users to complete the action?

Nudge : Guide users to take action

Reward : What feedback can users get after completing the behavior?

Enhance motivation: Explore the user's own needs and provide assistance to make the user more willing to complete the behavior

Common methods: Use friends’ endorsements, send red envelopes to new users, explain why you want to do it, personalize, give users what they want, simulate pre-aha moments, assist through psychology

Reduce friction: Remove all obstacles that prevent users from completing the activation action and help users quickly reach the aha moment

Common methods: remove unnecessary steps and information, avoid cold starts, highlight key behaviors and paths, avoid too many options, delay registration or waive registration

Timely promotion: Use various means to help users complete activation within the critical time window

Consideration: How quickly do users make decisions? How long is the activation period for new users? If the user is not activated, are there other channels to reach the user?

Common methods: timely educate users through various means and use external channels to push (such as official accounts and Weibo)

Timely rewards: Provide timely feedback and rewards to users who complete activation behaviors, encouraging them to move forward and complete more behaviors.

Considerations: The more difficult it is for users to complete the behavior, the better the reward should be; if the behavior is a key behavior of the product, rewards can help the process become a habit; if the process is long, rewards should be given in the middle of the process to recharge

Common methods: Celebrate to encourage users after they complete key behaviors; provide immediate feedback and a sense of “gain”

6. Evaluate the difficulty and cost to confirm the activation plan

Combined with user motivation and resistance, we preliminarily evaluate the difficulty of activation. The difficulty of activation varies greatly according to the product type. The following is an evaluation of the difficulty of activation by product type:

Activation Difficulty 5※ E-commerce has weak motivation and great resistance

Activation Difficulty 4※ SaaS platform has strong power and great resistance

Activation difficulty 3 ※ Mini game has weak power and small resistance

Activation Difficulty 1 ※ Strong tool power and low resistance

Generally, the costs can be divided into adjusting product means, adjusting channel strategies, adjusting incentive plans, and adjusting manual interactions from low to high:

Product level : design new user onboarding process, first product experience, etc.

Channel level : reach through SMS, push, email, official account, etc.

Incentive level : Stimulate users through new user red envelopes and discounts

Human level : Cultivate users through customer service and community

7. Conclusion