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Hey there,

After working in product/growth roles for over 10 years and starting multiple companies (including a product studio that got acquired), I have seen all kinds of retention problems. From B2B Saas to b2c Saas, mobile apps, enterprise solutions, etc. I believe most retention problems are actually activation problem.

Here's how to understand and hopefully fix it. :)

Understanding Retention vs. Activation

Retention is about keeping users engaged and coming back to your product or service. It’s a long-term game, where the goal is to create lasting relationships with your customers. Activation, on the other hand, is the process that occurs right after acquisition—it’s about getting users to experience the core value of your product as quickly as possible.

The Common Misconception

Many businesses struggle with retention and immediately turn to tactics like email campaigns, loyalty programs, or customer support improvements. While these are important, they often overlook a crucial aspect: whether users have been adequately activated in the first place.

Why Activation Matters

Activation is the moment when a new user experiences the core value of your product and recognizes its potential impact on their needs. If this moment doesn’t happen—or if it’s delayed—users are likely to churn before they’ve had a chance to truly engage with your product. In other words, if users don’t get to the “aha moment” quickly enough, they’re unlikely to stick around.

Activation as the Foundation of Retention

When users are properly activated, they understand how your product solves their problem, and they are more likely to return. Activation sets the stage for all future interactions. A weak activation process can lead to poor retention, as users may leave before they’ve had a chance to see the value of what you offer.

Diagnosing Activation Problems

To diagnose whether your retention issues stem from activation problems, consider the following:

Onboarding Experience: Is your onboarding process clear and intuitive? Do users know what to do next after signing up?

Time to Value: How quickly do users reach the point where they see the core value of your product? The faster they reach this point, the more likely they are to stay.

Engagement Metrics: Are new users engaging with key features early on? If not, they may not be properly activated. (Keep one thing in mind here, figure out the right metrics to track. If you are building a consumer social media app, DAU and MAU are both important. But, if you have a B2B solution that generates a report every month - tracking DAU is pointless.)

Improving Activation to Boost Retention

To improve activation, focus on the following areas:

Streamline Onboarding: Make the onboarding process as frictionless as possible. Guide users to the core features that demonstrate your product’s value.

Personalization: Tailor the activation experience to different user segments. Different users may need different pathways to reach the “aha moment.”

Feedback Loops: Gather feedback during the activation phase to understand where users might be getting stuck or dropping off.

The Long-Term Impact

By addressing activation issues, you not only improve your immediate retention metrics but also set the stage for healthier long-term growth. When users quickly grasp the value of your product, they’re more likely to return, explore additional features, and ultimately become loyal advocates.

Conclusion

Retention is critical, but it’s important to remember that it doesn’t stand alone. Often, what appears to be a retention problem is actually rooted in activation. By ensuring that new users quickly experience the core value of your product, you lay a solid foundation for lasting engagement and long-term success.

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