Optimize for usage, not just sales
Do any of these sound familiar?
- “I ordered the book, but never read it.”
- “I bought this app, but I never logged in.”
- “I backed it on Kickstarter, but it just sat in its box.”
- “I got the upgrade, but I kept using the old version.”
As product people, we make things so people will use them.
And yet, we optimize a lot of our marketing around merely getting the sale.
But “getting the sale” isn’t enough.
You can’t build a sustainable business on one sale. You need customers to come back; otherwise, you’re wasting a lot of time, money, and energy on acquisition.
The truth is, most of the magic happens immediately after purchase. When customers buy something and become activated, that’s where our business’ flywheel starts running.
Customer activation leads to:
- positive outcomes for your users
- word of mouth, reviews, and case studies
- repeat purchases, upgrades, and expansion revenue
Activation and usage are what contributes to a business’ longevity. Instead of being in a never-ending cycle of trying to acquire customers, you’re able to focus on retention. This increases the lifetime value of a customer.
For example, my friend Bryce owns the local skateboard shop. It doesn’t help him if he sells someone a board, and they go home and put it in their closet. To have a healthy business long-term, he needs the customer to use the skateboard, and keep using it!
A few weeks ago, two girls bought their first skateboard. Yesterday, Bryce and I were hanging out in his shop, and they rode by down Main street. This is a good sign. They’re out skateboarding. They’re activated!
If they keep skating, they’ll progress. They’ll break boards. They’ll buy new shoes. They’ll want to upgrade to better wheels. Tony Hawk is 50 years old, so it’s possible that these girls will skateboard for another 35 years. These are the long-term customers that will help Bryce build and sustain his business.
How do you increase activation?
Those first moments after the purchase are crucial. Remember, when a customer signs up, they’re highly motivated. They’re eager to see if your product will live up to its hype. They’re asking:
“Alright, I’m in! What’s this going to do for me?”
But, if your product feels too complicated, or they get stuck too fast, they’re going to give up. And if they leave, you might never get them back.
So, when users log in for the first time, you need to give them a quick win.
Rob Walling calls this the “minimum path to awesome:”
“If you have invoicing software, maybe it’s when they send their first invoice, maybe it’s when they get paid. It’s the minimum path from sign-up to something that gives them a dopamine rush.” – Rob Walling (Source)
If your product is new, one way to give customers that feeling is to personally onboard them. Get on the phone! At the beginning of the call, you can determine:
- What’s going on in their world that brought them to your product today?
- What are they hoping to accomplish with your product?
“The biggest mistake I see new SaaS companies making is they try to increase activation by writing lots of onboarding code and emails. Instead, screen share with every new customer. Figure out why they bought your product and what their goals are. Personally help them “activate” what you promised them on your marketing site.” – Brennan Dunn
For my new startup, Transistor.fm, we’ve done dozens of calls with early-access users. What are we seeing? Two accomplishments make our users feel awesome:
- Uploading their first podcast episode
- Being able to share it with a friend
Folks want to be able to tweet out: “HEY! I JUST MADE A PODCAST CHECK IT OUT!”
Started a little podcast with @jmcharnes to talk about #ruby and #rails every week. Let us know what you think! https://t.co/z8KAw2nRvN
— Chris Oliver (@excid3) June 8, 2018
Don’t be satisfied with just taking people’s money. Reach out. Figure out what their goals are, and where they’re getting stuck. Then, help activate them by giving them some initial wins.
Notes from Justin Jackson
Startup stories, lessons, and tips.
Sent on Saturday mornings.
(Read it while you drink your coffee)