Diagnose a drop in DAU

Question

The activation rate dropped by 15% this week. Walk through your investigation process.

Codemia · Accepted Answer

The immediate issue is a 15% drop in the activation rate of users on Booking.com this week. To scope this problem, I would first analyze the time frame of this drop—was it sudden or gradual? I would segment users by new users versus returning users to understand which group is most affected. Additionally, I would look at key user flows in the activation process, such as account creation and first booking completion, to identify specific points of friction causing this decline.

The primary users affected by the activation rate drop are new users who have signed up for Booking.com in the last week. For this demographic, factors such as ease of use, trustworthiness, and the ability to find relevant accommodations are critical. Given the competitive landscape with other travel booking platforms like Airbnb and Expedia, our focus should also be on user experience and perceived value. New users often seek an intuitive onboarding experience that quickly leads them to their first booking.

I recommend implementing an enhanced onboarding experience that includes a step-by-step guide through the account setup process, emphasizing personalization by suggesting tailored travel recommendations based on user preferences. Additionally, introducing a limited-time offer, such as a discount on the first booking made within a week of sign-up, could incentivize quicker activation. This approach directly addresses the potential hesitancy of new users in completing their first booking.

To evaluate the effectiveness of the proposed solution, I would track the following metrics: 1) **Activation Rate**: percentage of new users who complete the onboarding and make their first booking; 2) **Time to First Booking**: average time taken from sign-up to first booking; 3) **Onboarding Completion Rate**: percentage of users who complete the onboarding steps; 4) **User Feedback Score**: through surveys post-onboarding; 5) **Churn Rate**: percentage of users who drop off before making their first booking.

Key trade-offs to consider include the balance between a simplified onboarding process and the depth of information provided; while a streamlined experience is essential, too much simplification could lead to a lack of user engagement. Additionally, offering discounts may attract users who are only price-sensitive and not loyal in the long term, potentially affecting our bottom line if not managed properly. Lastly, the time and resources required to implement these changes should be weighed against the expected increase in activation rates.

Diagnose a drop in DAU

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