Chapter 19: The Activation Stage of the Growth Funnel

In Chapter 19, we explored the Acquisition stage of the AAARRR growth funnel. In this stage, we will focus on the next stage, called Activation.

What is Activation?

Activation is the next big step in your growth funnel. In this stage, you’re actually having the first interaction with your product or service. This is where the user has gone from being a user on your website or just a lead to actually interacting with your product and thus upgrading to being a prospect.

This interaction with your product or service can be in the form of demo signup, sign up for a free/basic account, or even a sales response in some cases. All of these can be actions to look for to tag a user in the activation stage.

Activation vs Acquisition

Remember that in Chapter 18, we saw that Acquisition is when you can identify a user and that’s the stage where the evolution happens from “traffic” to “user”.

In the corresponding sales terminology, a user in the Acquisition stage can be best called a lead while a user in the Activation stage can actually be called a prospect.

This is why Activation is closer to the Revenue stage of the funnel as leads narrow down to prospects which would further narrow down to paying clients (we see this in the next stage of the funnel).

Note: This is why I place Revenue right after Activation and not at the bottom of the funnel, like the old Pirate metrics, that were made around Freemium apps.

Metrics for Activation

Here are the key metrics for the activation stage of the funnel:

  • Product demo signups
  • Free trial signups
  • Free account signup
  • Sales demo signup

These are some of the metrics that shows Activation.

Examples of Activation

Some of the examples that mark the Activation stage include:

  • When a user completes their first ride with Uber
  • When a company creates its free plan on Slack
  • When a new Gmail account user sends their first mail
  • When a customer receives a grocery delivery from Instacart
  • When a customer books a free audit call or report from a service provider

Activation is the stage where your user realized your product’s promise or value proposition. Hence, this stage can better predict revenue.

It also shows how well and efficiently you spent money on the last stage of Acquisition.