Friday, February 25, 2022

What does user activation mean and what metrics are important there?


Activation is a process during which the user understands how the product can be useful to him. An activated user can be considered the one who feels the value and continues to return to the product.


Although activation metrics most often depend on business goals, they often overlap in the following:


Sign Up Rate - the proportion of users who have registered in the store. Registration may indicate that the user came with a certain motivation.


Add to Cart Rate - the percentage of users who added a product to the cart.


Cart Abandonment Rate is the percentage of users who added a product to their cart but left without starting checkout. The industry average is 70%, of which 58% were not going to buy anything (Baymard Institute, 2018), while a decrease in the remaining 42% is a potential growth point.


Check Out Rate - the percentage of users who added a product to the cart and started placing an order.


Search X Times Rate - the proportion of users who made X searches.


Customer Retention Rate - customer retention rate. Shows how many customers stayed in the product for a certain period of time (year, month, week).


Customer Lifetime Value is the lifetime value of a customer. This is a projection of the potential income that can be received from the client. This metric is calculated based on the customer's previous buying behavior.


Repeat Purchase Rate - the coefficient of repeated purchases. Shows how many customers return after the first purchase.

What metric is considered key in this product? What one metric do teams look at every day?

North Star Metric (NSM) is a metric for tracking product growth and increasing product value for the customer. Increasing NSM is usually a long-term goal of the company.


Since NSM is a strategic metric, it is not monitored every day. We assume that there are other metrics for teams in e-commerce that track every day, such as the number of orders placed or delivered per period. The optimal choice of NSM for e-commence would be the number of customer orders per period. The cycle of purchases for a certain type of store can be selected as a period:

  • for grocery stores it can be 2 weeks
  • for clothing stores 3 months
  • for technology - six months or a year

What metrics are taken into account in attraction?

Conversion Rate (CR) - conversion to the target action. In the case of e-commerce, this could be:

  • conversion to registration
  • conversion to adding product to cart
  • conversion to product purchase / checkout

Customer Acquisition Cost (CAC) - the cost of acquiring a new user.


New Users - the number of new users.


Daily/Weekly/Monthly Active Users (DAU/WAU/MAU) – daily/weekly/monthly audience.


Virality - virality coefficient (number of sent invitations * conversion to acceptance of invitations).

What does user activation mean and what metrics are important there?

Activation is a process during which the user understands how the product can be useful to him. An activated user can be considered the one ...