Activation

Activation metrics attempt to measure how many users have started to use our product and find value. The first challenge of defining an activation metric is how we define a user as being active. This usually varies from business to business. For example, if we are looking at a business in the payments domain, we can expect that an active user will have a certain number of weekly transactions. Similarly, if we look at the communications domain, a user sending a minimum of a certain number of messages a day might be considered active. Any users who are actively using the product can be considered active users.

The following illustration shows a few of the key activation metrics we'll learn about in this section.

The following subsections will dive deeper into the individual metrics—Time to First Transaction (TFT), Time to Value (TTV), cohort analysis, and daily, weekly, and monthly active users (DAU, WAU, and MAU respectively)—that are used to measure activation.

Time to first transaction

The time it takes for a user to go from discovery to making their first transaction is called Time to First Transaction, or TFT. This is a key metric because it signals that the customer has completed their integration process. The definition of the transaction here is a production API call.

In most organizations, there is a test or sandbox environment and a production environment. Users might make a number of API calls in the sandbox environment as part of the development process. However, ...