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The Funnel. The Marketing funnel. The Sales Funnel. The Purchase Funnel. The Customer Funnel. Whatever you want to call it, the funnel is THE framework most commonly used to define the steps prospects move through to become customers (well...until Hubspot killed it).

Of course, the steps in a funnel look different depending on the business. For example, the steps in a typical e-commerce funnel look like this:

  • Visited homepage
  • Viewed Product Page
  • Added to Cart
  • Clicked Checkout
  • Added Credit Card
  • Paid
the marketing funnel
https://looker.com/blog/conversion-funnel-optimization

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For a traditional, SaaS business, your funnel would likely consist of the following steps:

  • Visited site
  • Requested Demo
  • Received Demo
  • Started Trial
  • Converted to Paid

Or some variation of that.

Funnels work well when you have a very linear process to measure. Person does A, then B, then C, then D IN THAT ORDER. Very rigid, very linear. Easy to measure.

Unfortunately, when you have a non-linear process to measure - meaning people can do a bunch of things, but in no specific order - funnels are not effective.

And this applies to how users engage with a SaaS product - especially new users (or accounts) on a path toward Activation. When looking at the Activation of new accounts, you can't use a traditional, linear funnel.

But have no fear - this doesn't mean you can't measure this Activation process effectively. In this post we'll explain how to do just this.

How to measure Activation

In order to measure Activation, we need to first define Activation.

Activation - as we'll define it here is basically a list of the things - the activities - that a new account needs to complete in order to get to "first value" with your product.

For a project management application, the point of first value might be when an account achieves these things:

  • Account created
  • Invited 2+ team members
  • Created project
  • Uploaded 2+ files
  • Created 3+ calendar events
  • Created 1+ tasks
  • Completed 1+ tasks

And these actions can be taken in any order - a non-linear experience - so measuring them as a funnel is a mistake.

In this case, you should be measuring Activation as a percentage - not a linear funnel. You need to measure, how many of these steps have been completed (regardless of the order). If a new user or account needs to complete 5 steps to become fully activated and has only completed 2 of those steps - they are 20% Activated. If it completes 4 of 5 steps - they are 80% Activated.

See below for an example:

saas account activation rate
A view of a SaaS account's Activation detail

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So...instead of measuring the Activation of your product as a funnel, look at it in terms of percent completed. You want to understand how many of your new accounts have completed:

  • 1 criterion
  • 2 criteria
  • 3 criteria
  • 4 criteria
  • 5 criteria

Then you can get an idea of how well new accounts are getting to what you have defined as full Activation.

the sass activation funnel report
The SaaS Activation report

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This will obviously help you understand how well your new accounts are moving toward Activation - toward "first value."

From there, you can break down which steps may be tripping up your users - creating sticking points.

activation steps breakdown
Steps in Activation funnel

This is a better way to analyze and think about Activation. It's the right way to think about Activation and the best way to make improvements.

Measuring Activation in Sherlock

With Sherlock, defining and measuring Activation rate is a breeze. Given that it is one of the most important metrics in a SaaS operation, it's one of the key metrics you can create, track, and measure in Sherlock.

Account vs User Activation

As with any product engagement measurement for a SaaS business, you need to be able to track Activation rates at the Account-level. With almost any SaaS products, multiple users on a new account contribute to the set-up and Activation of the account. That is why you can't simply measure Activation at the user-level.W

With that said, you may want to track Activation for each individual user. It may be important for you to know which users have set up their profile, taken some initial actions, etc. This is why we allow you to configure both an Account and User Activation criteria in Sherlock.

Configuring Activation rate

Configuring Activation criteria is part of your basic set-up with Sherlock. From the main configuration screen, you can set your Activation criteria (again - at the Account and/or user level). This is where you would tell Sherlock the individual things that an account needs to meet to be considered Activated.

configuring Activation in Sherlock
Configuring an Activation rate in Sherlock

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These can be events (did document created more than three times), traits (has employee count greater than 100), or number of users on the account. Sherlock will then measure how many of these criteria have been met and translate that into an Activation rate.

Using Activation Rate in Segmentation

Once configured, these Activation rates become traits on a user/account record and can then be used in sorting and segmentation.

segment based on Activation rate

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This is important for building your Product Qualified Lead process or drive your onboarding program. And when you create segments in Sherlock (based on Activation - or any other conditions), those segments get pushed to your other tools via Sherlock Connections.

Activation funnel insights

With Sherlock's Activation funnel report, you are to finally dig into that non-linear Activation funnel and derive some real, essential insights about your onboarding and product-led process. Let's dig in.

The first see when you navigate to your Activation tab, you will see your Activation report.

https://downloads.intercomcdn.com/i/o/156359438/846ba53f4f8020078177fc7e/Screen+Shot+2019-10-16+at+4.04.25+PM.png

This bar graph shows you how many users or accounts have reached certain levels of Activation. How many of your accounts or users have met 2 of your 7 Activation criteria? How many have met 5 of 7? Etc. This funnel is a great way to get a high-level view of your Activation success.

Filters

When you first navigate to this page, you will see a funnel for all the accounts in your scoring profile. But you may want to do this kind of analysis for a subset of your accounts. To facilitate that, you can create filters for this report.

There are two parts to the filters, Basic Filters and Activation Criteria. These filters will allow you to segment, customize, and hone in on the Activation Details for any specific group of customers.

The Basic Filters give you the option to view the Activation Details for any set of conditions you wish. This is your chance to segment the data by Trial users, Enterprise accounts, newly converted customers, and much more.

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https://downloads.intercomcdn.com/i/o/156281084/5dc56308819ea4babf4e9d23/Screen+Shot+2019-10-16+at+11.10.41+AM.png

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The Activation Criteria add another layer to the filters. Your team can choose exactly which of the Activation data points they want to focus on. Sherlock can show you who has done and hasn't done those steps so your team can work to activate the customer base.

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https://downloads.intercomcdn.com/i/o/156287127/0058abd393bb2daebbceabe7/Screen+Shot+2019-10-16+at+11.30.14+AM.png

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The Activation details

From the basic report, you can dig in further. You can scroll down and get a list of your users and accounts with their Activation Rates and Engagement Scores. This list can really help your Sales and CS team by quickly showing them which customers are succeeding (and which are not).

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https://downloads.intercomcdn.com/i/o/156359505/57ca4ea0268b61184b715934/Screen+Shot+2019-10-16+at+4.04.47+PM.png

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Criteria breakdown

Lastly, the criteria breakdown. Understanding what percentage of your customer base is passing each criterion step is key. If a certain step is struggling compared to the others, your team may want to take note and try something new.

  • Should your CS team focus more on that step in onboarding?
  • Should the Sales team set up automated emails to make sure trial customers understand the value prop of that step?
  • Is this something the Product team should be aware of?

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