Activation? Engagement? What’s the difference?

If you spent a day at Sherlock, you’d hear us throwing these terms around as often as “coffee” and “SaaS” (very well, perhaps less than “coffee”). But what does Activation mean? What does Engagement mean? How are they related? What’s the difference?

Quite excellent questions!

Here’s our CEO, Derek Skaletsky, on the topic.


Let’s begin with Activation (Rate)

n. A static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is.
n. An indicator of how far along someone is to becoming a product qualified lead

There are a few things a user would need to do to get set up in your product and get value out of it. These things vary based on the product. Let’s say you’re a modern SaaS company with a GSuite plugin for email collaboration. Your Activation steps might look like this:

The account journey from signup to Activation
The account journey from signup to Activation

Here’s an obvious fact that follows: Activation rate is just the percentage of steps completed. That means if an account or user has done 2 out of the 5 steps above, they are 20% Activated. 

They are 20% of the way to hitting first value with your product. Excellent!

Sherlock screenshot showing Activation rate
Account Activation is on the left in Sherlock

In Sherlock, you can see an account or user’s Activation rate in a few places. The full Activation checklist is on the left side of any account or user detail page, and the Activation rate is visible on any user or account overview (because it’s such an important metric!) Additionally, you can see Activation rates in other platforms you’ve integrated with Sherlock — Intercom, Slack, and Hubspot being among them.

Use Activation rate in Slack, Intercom, Hubspot
Sherlock integrates with Slack, Intercom and Hubspot

Setting up Activation in Sherlock is simplicity itself. Get started and never miss another Activated trial again

When to use Activation (Rate)

Activation Rate in the Customer Journey
The Customer Journey

Activation rate is quite important in the early phases of the user journey, especially if you have a freemium version or free trial. In that case Activation, occasionally combined with firmographic criteria, is the best indicator of when a trial account is ready for an interaction with your sales team. (It becomes even more important when you have a large number of trials and your Sales team needs ones to focus on.)

But that doesn’t mean that Activation is no longer important after the free trial is up. Post-sale, Activation gives your Customer Success team a way to measure how far along the account is in the on-boarding process and what steps each user needs to complete to be fully on-boarded onto the product.

Separate you paid and trial accounts so your different teams can use different Activation criteria

User vs. Account Activation

It’s been said (and will be said again): If you are a SaaS business, you operate at an account-level. 

  • Accounts sign-up
  • Accounts adopt
  • Accounts convert 
  • Accounts pay
  • Accounts expand
  • Accounts cancel

Curious, it seems there’s a trend here.

Sales teams have always known this. Just look at how any CRM is organized. Marketers know this. That’s why ABM has taken off in recent years. SaaS businesses sell to other businesses — your product is used by teams. You operate at the account-level. 

Why wouldn’t you track Activation the same way? You would track it the same way. But accounts are made of users.

Track activation at both the account and user levels
Sometimes users have different Activation criteria than accounts

There are some Activation criteria that the account needs to do. For example, adding a certain number of team members to the account. On the other hand, there are some Activation criteria that a single user needs to do to become Activated. Think actions like setting up a profile or creating an individualized template. To truly understand how far along an account is on the path to Activation, you need to understand both the account Activation and the Activation rate of the individual users on the account. 

Track both account and user activation with Sherlock

Now, Engagement Score

n. An over time measurement of how much a user or account is using your product

This is all about the events (or actions) a user or account can take in your product. As you are well aware (surely), there are several things that one might do in any given SaaS product. Some of these things are more important than others. Login, for example, is not that important. Sure, everyone does it, but how much value does someone get from logging in? 

An obvious fact, that — not a lot.

Creating a report, however, is more valuable. A user would certainly derive more value from creating a report than logging in. (This is, of course, assuming you have the sort of SaaS app where creating a report is part of the value.) There are events that are likely even more valuable than creating a report and similarly events that are less valuable than creating a report.

engagement scoring model pql
Some events are more important in your product than others, so why would you weight them all the same?

So to get a good sense of how engaged a user is with your product, you need to collect all the (at least somewhat) important events that one might do in your product and weight them accordingly. Then, you need to do some math to find the engagement score for both users and accounts.

Don’t want to do the math yourself? Weight your events in Sherlock and let us calculate your engagement

When to use Engagement Score

Yet another obvious fact — all the time! In all seriousness, there are several things an engagement score can tell you. 

  • It surfaces accounts that are at risk and ones that are ready for an up-sell. 
  • It shows you which users on an account are going to be internal champions for your brand. 
  • It gives you an indication of which accounts might be good to reach out to when it comes time to build out your social proof

But most importantly, and partly because it is over time, the engagement score offers singular insights into the overall health of your business. If it’s on a downward trend, it could indicate you need to make some changes. A graph with a positive slope means you’re doing something right!

engagement going up/down over time
Engagement is a good indicator of how your product is doing

At-a-Glance: Activation vs. Engagement

Activation RateEngagement Score
Static metric to determine how far a user/account has progressedOver time metric for assessing how much a user or account is using your product
Use it at the beginning of the customer journey – both pre and post-saleImportant to track across the entire customer lifecycle
Trends are essential for identifying risks and opportunities

Ready to start scoring? Give Sherlock a try.

4 Product Engagement Metrics for a Winning Customer Success Operation

SaaS customers won’t be successful with a SaaS product if they don’t use it. Sure, some might continue to pay for it (seriously, my dad’s still paying for AOL), but that’s not the same as success. And you want people to be successful with your SaaS product (retention revenue, anyone?) 

Enter your customer success team — their job is to maximize engagement with the product. Account not engaging? Fix it. Account engaging? Excellent, increase engagement even more.

But CS teams can’t work blindly (or they shouldn’t if you want them to be successful). So how do you remove the blindfold? It’s elementary, my friend: Product engagement — the system upon which all other customer success metrics are built. Metrics based on product engagement give your team a glimpse into the health of the business. And they’re actionable (CS teams need to take action). 

Here are the key customer success metrics you should be tracking: 

  • Active Users/Accounts
  • Product Engagement
  • Product Adoption Rate
  • Activation Rate (for new accounts)

The “What” of Customer Success Metrics

Customer Success Metric #1: Active Users and Accounts 

active user (n.) = someone who has used the product in a given time frame (even if only a little!)

active account (n.) = an account that has had at least one user use the product in a given time frame (even if only a little!)

This one’s simplicity itself. You choose what counts as activity. Login, perhaps? Or, even better, actions around other key features (sometimes“login” isn’t the best indicator of engagement).

Then choose how often to measure (this will depend on your product). Used daily (think Facebook)? Measure DAUs. Used monthly? Measure MAUs. Most SaaS products are business apps with weekly usage patterns so a WAU customer success metric works best. 

Here’s a pro tip: SaaS businesses are account-based businesses and your customer success team operates at an account-level. If you can’t measure your key product engagement metrics at the account level, then they’re not helpful. Action item: Make sure you can determine“active” for users as well as for accounts.

Generally speaking, “active” is a pretty shallow metric. To get a better understanding of how well your customers are engaging, you need to look deeper.

Customer Success Metric #2: Product Engagement Score

product engagement (n.) = a measure of how engaged your users or accounts are in a given time frame

This is this singular customer success metric for any SaaS business. You already know “active” doesn’t mean “engaged” (neither does “last login”). Product engagement is more than that. Just ask Lincoln Murphy:

Logins Don’t Matter

While you generally need to sign-in to an app to get value, that action alone is probably not the thing that delivers value to your customer.

Simply being “active” in the product doesn’t mean you’re being “successful” either.

In fact, a lot of logins and random in-app activity could be a sign that your customer can’t figure out what to do…but they sure would like to.

It’s a signal that something’s amiss…but a lot of companies might wrongly classify that customer as “active” and therefore“onboard” and“successful.”

“Active” – logins, random in-app activity, etc. – without context could be that the user wants to do something but can’t figure it out, so “active” in that case is actually a churn threat. Crazy.

Lincoln Murphy, “Active Users Are a Vanity Metric

Crazy, indeed. You need to score actual product engagement. It’s a model that scores each of your users based on (a) the number of times they do certain things in your product; and (b) the importance of those activities. 

Here’s what a table to score user engagement might look like:

Product EventImportance
(between 1-10)
Number of Times
Event Score
Event 1250100
Event 291199
Event 3525125
Event 417575
Total Raw Score399

By doing this you will give every user his/her own engagement score (you should then normalize the scores between 1-100 so they are easier to understand and use) for your engagement period (daily, weekly, monthly — up to you). 

Don’t want to build your own scoring solution? See how you can use Sherlock to do it for you.

Any system you build (or use) for measuring engagement should help you measure engagement at the user, account, and product level. And it should track this engagement over time. If you want to get value out of it, anyway. You do want to get value, don’t you?

Customer Success Metric #3: Product Adoption Rate

user adoption rate (n.) = the percentage of your key features a user has used in a given timeframe

account adoption rate (n.) = the percentage of your key features any user from an account has used in a given timeframe

Measuring Adoption is similar to measuring engagement, but Adoption determines “what percentage of your key features” your customers are using. While users can show strong engagement by only using a small set of features, Adoption rate measures the number of unique features being used. This basically measures “depth of engagement.” 

For example, if you have ten important features and one of your accounts has used two of them in the past month, that account would have a 30-day Adoption rate of 20%. But another account whose users used eight of those features would have a 30-day Adoption rate of 80%.

Low Adoption rates mean that users are using the product in a concentrated way, while high Adoption rates mean that users are using the product more broadly.

Customer Success Metric #4: Activation Rate

activation rate (n.) = How far along a user/account is on the path of becoming Activated, i.e. fully on-boarded and/or to first-value

Knowing how close (or far away) your accounts are to the point of Activation is an essential customer success metric for any team working to onboard new users. 

An Activation rate is just that. It’s a measure of what percentage of your “Activation” criteria an account has met — how many steps have they taken as a percentage of the total number of steps they need to take. (This is especially important in trial accounts.)

For example, if you offer a project management application, new (trial) accounts might be Activated after they: 

  • Create an account
  • Invite 2+ team members
  • Create a project
  • Upload 2+ files
  • Create 3+ calendar events
  • Create 1+ tasks
  • Complete 1+ tasks

For this product, accounts that do all of these things would be considered Activated during their trial. The Activation rate would be expressed as a percentage based on how many of these steps a new account has taken. 

The “How” of Customer Success Metrics (How to Use Them, That Is)

You’ve got the what, now let’s figure out the how to (assess and derive action from) of our core customer success metrics. To do that, we need to get them actionable at both a management and a tactical level (as with any other operational metric).

Management-level metrics tell you about the health of some part of your business. A management-level customer success metric tells you about the health of your paid user base (or specific segments of it).  

Tactical-level metrics are action metrics. They tell your team that something needs to happen (or not happen). A tactical-level customer success metric is all about helping your customer success managers identify issues and opportunities so they can take action. Baker Street Insight: These metrics really need to be measured at both an account and user level. 

Excellent! Let’s see how to use the key customer success metrics we defined above.

Customer Success Metric #1: Active Users and Accounts

This one’s inherently more tactical. And why? It doesn’t do much to tell you about the health of your business other than painting a picture of (a) the general scope of your user base and (b) it’s growth (or decline). 

Knowing if you have 200 active accounts (or if the number of active accounts is different from last month) can help you plan resources at a management level. And if you don’t have a product engagement scoring solution, you could use growth in active users/accounts as a proxy for the health of your product. But you really shouldn’t (see above).

For tactics, on the other hand, knowing how many active users there are on a specific account is very helpful for a CSM managing an account. Most SaaS businesses can only be successful for their customers if the product is used by multiple users on multiple teams. So when managing SaaS accounts, knowing the number (or percentage of active users) can help a CSM identify problem or thriving accounts and prioritize their work. 

Customer Success Metric #2: Product Engagement Score

This is a power metric at both levels. 

As a management metric, tracking the engagement level of paid accounts over time tells you the overall health of your userbase. Are our paid users becoming more or less engaged with our product? This is a basic question that all Customer Success teams should be able to answer. 

It also is a customer success metric perfect for assessing the health of different segments of your customer base. For example, looking at the engagement of accounts at different pricing plans or in different industries can help you hone your ideal customer profile (product-market fit, anyone?). Interesting use case: Looking at the engagement of accounts by individual CSM is one way to assess CSM performance. 

As a tactical customer success metric, looking at product engagement score at the account level can uncover:

  • Highly engaged accounts that can serve as your best advocates
  • Accounts that are at risk of churning
  • Accounts with engagement growth that may be ripe for potential expansion
  • Accounts that may have had some turnover and need attention

At the user level, this metric can help you identify power and problem users. Power users (or power users for each account), my friend, are going to be key to the health and potential expansion of an account. Problem users (those whose engagement is decreasing over time) can quickly become the canary in the coal mine for any account. Use them to gain information.

Customer Success Metric #3: Product Adoption Rate

Let’s get real here: One of the main jobs of your customer success team (and one of the hardest) is getting users to adopt as many of features as possible. Healthy businesses have healthy Adoption Rates and looking at an overall Adoption rate for your paid users can help determine whether or not this is happening.

As with Engagement Score, looking at Adoption rates across different segments can also be helpful. You may have accounts that are on self-serve plans vs high-touch service plans — looking at Adoption rates across these two segments can help identify if your high-touch efforts are helping. (The same is true for looking at Adoption across different pricing tiers.) Looking at Adoption rates across various segments can offer insights that can help drive higher-level customer success strategies. 

As a tactical customer success metric, it’s important for you customer success teams to know the Adoption rate of their accounts so they can effectively target accounts with specific and relevant support. An Adoption rate metric at the account level can help a CSM understand each account’s use case and and give them the information they need for futher Adoption. 

Customer Success Metric #4: Activation Rate

Activation rate is a customer success metric targeted at your new accounts and users — and it’s an important one. Looking at Activation rates at a management level can help you understand the success of your on-boarding efforts. 

But when you track Activation rate at the account level, it becomes a powerful tactical customer success metric. Every customer success team is responsible for on-boarding users and accounts, so having the ability to track the degree to which each account is on-boarded is essential for prioritizing and organizing their work. Having this data can help a CSM focus on those accounts that are stuck in the process and understand exactly what the sticking points are. 

Product Engagement Metrics Are Foundational for any SaaS Customer Success Team

Quite so! Operational metrics give you insights into the health of your business, but when used correctly, they are also powerful tools that help you define specific actions. The former management-level use case dovetails nicely with the latter tactical-level use case.

This is especially true when it comes to metrics for your Customer Success team. Without customer success metrics that can inform and drive action, your team will be spending a lot of time guessing and chasing after red herrings. Not excellent.

10 Product Engagement Alerts Every SaaS Business Needs

In today’s game of SaaS (you know it’s a game, right?), success depends on knowing what’s going on in your business. And acting on that information — fast. Not sure how? Enter Sherlock’s product engagement Alerts.

Now customer-facing teams at any SaaS business can stay on top of how users are engaging (or not engaging) with the product in real time.

Product engagement alerts? Curious, but of what would I need to be alerted? 

A remarkable question, indeed. There are a lot of engagement alerts your team might welcome — some unique to your SaaS business, some not. Here are few game-winning no-brainers to get you started:

SaaS Product Engagement Alert #1: New account sign-up

There is no greater rush (except perhaps the one Sherlock felt when a fresh stream of liquified opium kissed his bloodstream after an extended stretch of abstinence) than seeing a new account sign up for your product. They love us! What better affirmation of your collective efforts? 

This one is for sharing. Set it up. Celebrate. Pop the champagne. But wait, don’t forget about the account! Make sure you’re moving them toward a more significant commitment. 

By the way, once you’re getting too many signups for a realtime alert (it’ll happen!), you may want to set up a daily summary for all the good news. 

SaaS Product Engagement Alert #2: Account converts to paid

Well done, my friend! You converted that trial to paid. Push this product engagement alert to a group channel and let the GIF party begin.

Happy The Office GIF - Find & Share on GIPHY
Your team when you get this alert

SaaS Product Engagement Alert #3: New users added to existing accounts 

Don’t let these ones fall through the cracks. New users who were added to an existing account might not have been critical to the account converting to paid, but they’re going to be critical for retention. These are the people using your product. If they’re not on-boarded correctly, you can kiss your retention revenue goodbye. 

Instead of ignoring these users, set up an alert for your CS team so they can not only become aware of these new users, but can also reach out and give them a great initial experience with your product. 

*Bonus! Set up this alert for your trial accounts as well. Adding new users to a trial is a strong signal of activation and potential conversion. 

SaaS Product Engagement Alert #4: Trial accounts become activated

PQL! We’ve got a PQL!

Got some people on free trials? You need to know when these accounts become activated. Well, if you want to hit your sales number. When a trial account becomes activated, someone should be reaching out — or at least strategizing the next step in the sales process.

Don’t miss the opportunity. Set up an alert for when an account becomes fully (or partially) activated.

SaaS Product Engagement Alert #5: An account’s engagement score drops significantly

This one’s not great, but it’s not a prescription for doom either. A drop in the engagement score of any account is an important signal of potential trouble. Set up an alert for whenever a key account’s engagement drops more than, say, 20 points so that your customer success team can do something about it. There’s still time to stop the churn.

SaaS Product Engagement Alert #6: Account becomes inactive 

A drop in engagement score is one thing — you can recover from that. Complete inactivity is another (it’s definitely worse). A completely inactive account is a churn threat of the highest order — a true emergency. This alert may give you one last chance to save an account.

Learn More about Sherlock’s Product Engagement Alerts

SaaS Product Engagement Alert #7:  When an account’s engagement score increases significantly

Time to celebrate again. A rise in an account’s engagement score is a great signal for the health of the account and, you guessed it, a great signal they’re ready to expand. Set up this alert and get your customer success team on top of your best accounts so they can start expanding them.

SaaS Product Engagement Alert #8: Key feature adoption

You spent months on that new feature — users have to love it, right? See how and where it’s being adopted in real time by setting up this product engagement alert. The product people in your #product channel will be thrilled, and more importantly, they’ll know which features are being used and which ones aren’t. More information for the next feature!

SaaS Product Engagement Alert #9: When account triggers at-risk features

Many products have features that indicate someone’s going to churn. We’re talking about features like data export, pausing a message, deleting users — things that are indicative of an account getting ready to leave. You know you have the actions. You know you don’t want people doing them. Don’t you wish you knew when people were? Create an alert for when someone uses these features and give your team the chance to save at-risk accounts.

SaaS Product Engagement Alert #10: Cancellations

Ok, it happens. Not all accounts can be won. We know it’s tempting to pretend it doesn’t, but this is a great opportunity to learn what you can do better. The moments after an account cancels are primetime opportunities for feedback. The battle might be lost, but don’t lose your chance to collect the game-winning move.

Ready to start winning the game of SaaS?

Get a demo and see why Sherlock’s Product Engagement Alerts are precisely what you need

5 Things Your SaaS Sales Team Needs to Know About Product Engagement

“Product engagement? WTF is that?!?!?”

– The software sales veteran

The SaaS business model has long challenged the need for the traditional software salesperson. The SaaS model – and more recently the push toward Product-Led Growth with its free trial and frictionless upgrade path – has called for the death of sales.

“Why do we need a sales team if a customer can try, use, and buy my product without talking to anyone?!?!?”

Of course, this has proven to be a bit hyperbolic. A high-performing sales team is still an essential part of most SaaS businesses.

With that said, this new software model has certainly redefined the way that a software sales team operates in fundamental ways. 

Most significantly, the product-first model means that it is very likely that your salespeople are selling to people who have already started using your product. These prospects are either on a free trial, using a freemium version of the product, or maybe even in a pilot. No longer are your sales people selling an abstract concept to some bureaucratic decision makers. They are selling to actual users. People who have experienced the product in some way. Hopefully seen some value – or not. 

This means that for any sales team to be successful in this new world of software, they need to pay attention to things they haven’t had to in the past — most significantly product engagement

Product engagement in the SaaS sales process

Selling to someone who has used your product is different than selling to someone who has not. In order to sell to people that have used your product, it is essential to be intimately in touch with: 

  • how they have used the product; 
  • how far they have gotten toward Activation; 
  • what feature they may have missed; etc. 

If you are selling a product with a freemium or free trial experience, this information, this data, is a new requirement in the sales process. In fact, this data is the basis for a Product Qualified Leads (PQL)

Want to learn how Sherlock can help your sales team get what they need? Click here.

Given that factoring product engagement data into a sales process is still a new concept, we wanted to outline the five things that your sales team will need with regards to product engagement data. Whether you are building your own internal systems for this or using a solution like Sherlock, this is what you team needs: 

Access to the data

Obviously, getting the end users – in this case your sales team — access to the essential data is a fundamental part of any data-based process. But access is one thing — easy access is another thing. You need to understand the most convenient places for your sales team to consume this data. Obviously, that’s your CRM (Salesforce?) – where your sales team spends the most of their time. But don’t overlook some other places where they may like to see this data — namely Slack (and potentially Intercom). Don’t think you can throw this data into a spreadsheet and think your team will use it. They won’t.

The data in a usable format

Having access to the data is certainly necessary. But your product generates a lot of data. You can’t dump a truckload of raw engagement data from your product onto your sales team and expect them to makes sense of it. This data need to be compiled into a format that has context and is easily consumable. You should create a methodology to score and rank your users based on how frequently they are using the most important parts of your product (learn how to do that here). Doing this will allow you deliver this data to your sales team in a format they can actually use. A simple way for them to understand who’s engaged, at what level, and how recently. Again – the more voluminous and complicated the data you give your sales team, the less likely they will use it.

Engagement scoring at the account level

This is super obvious – so much so that it’s very easily overlooked. As a SaaS business, you don’t sell software to individual users. You sell to teams, to organizations — to accounts. This means only tracking product engagement at the user level is not helpful. You need to be able to aggregate this engagement data at the account level. Without this ability, your PQL process will become more frustrating than helpful and your sales team will likely abandon it.

Ability to identify the most engaged users on each account

When working a sale, salespeople are always looking for the right “entry points” into an account. They look for people who are going to become their internal champions — someone who will help sell the product internally. Therefore, having insights into the engagement of each user on an account is essential for driving a sales process. The users most engaged with the product will become “case studies” your AEs can use when trying to sell to other decision makers. This is key, key data for your sales team.

Ability to track account Activation rates

The goal of any trial process is to drive users and accounts toward “Activation.” Every product has a different definition of Activation, but it’s generally the three, four, or five specific actions that allow a new account to experience “first value.” A good PQL process will include insights into the Activation progress for every trial account. Which accounts are fully Activated? Which ones are almost there? Which ones are way off? These are all essential questions your sales team are asking and which that should be easily answered in your PQL process.

SaaS trial activation

In Conclusion

Whether they like it or not, modern sales people at modern SaaS organizations must become very familiar (and very comfortable) with product engagement data. In fact, this data is quickly becoming the most important qualification criteria for potential customers – the basis for the Product Qualified Lead. When you are selling to people who have used the product, knowing how they are using the product is simply, essential. 

But it is not easy to get this data compiled in a way that it can be effective for your sales team. We hope this list of requirements provides a good start for putting together this type of system. 

If you’d like to see how Sherlock can make this a reality with very little effort on your part, click here.