3 steps to effectively improve the user retention rate of your product!

After entering the stock market, user value becomes more valuable, and user retention becomes the top priority. This article believes that user retention can be divided into two processes: initial and long-term, and also achieves user retention through three specific steps.

There is a very classic theory in system dynamics: the bathtub theory. In a bathtub, "water" has two states:

1. Stock: How much water is accumulated in the bathtub at a static event point;
2. Flow rate: How much water flows in and out during a dynamic period of time.

If we want to take a comfortable bath, which variable is the key?

The answer is: inventory! Even if the inflow is huge, we still can’t take a bath if we can’t retain the water.

Suppose our product is this bathtub, new users are the inflow, retained users are the stock, and lost users are the outflow. Then it is conceivable that in order to maximize the benefits of the product, in addition to continuously attracting new customers, we must also convert traffic into stock. Only when the retention rate is high can we take a comfortable bath.

So how can we improve retention rate?

1. Two directions to improve user retention rate

If we draw a user retention curve, our hope for users is that the retention rate will slowly decrease over time, and then stop and remain at a relatively high level. But ideals are full of hope and reality is ideal. In fact, the actual retention rate curve of many products starts to drop sharply from the second day of new users and continues to decline...

To improve the retention rate, in fact, it means to raise the overall retention curve. Then, we can divide it into two processes: initial retention - retaining new users and long-term retention - retaining old users.

1. Initial retention: guide new users to quickly experience core functions or content

An unfamiliar product is like a small dark room. If no one holds the user's hand and leads him inside, the user will be hesitant or even afraid, not knowing what is inside.

Think about what was the most difficult emotion for us to overcome when we were growing up? Is it fear? Fear of loss, fear of the unknown.

Therefore, what we need to do is to help users overcome their fears, use "guidance" to help them put on a pair of "curiosity glasses", and let them take the first step to explore new areas that they have never reached before. Only when the user takes the first step and tastes the great meal we prepare in our store will he be likely to come often.

For example, we all know that the core content of Fan Deng Reading is listening to books. For the Fan Deng Reading app, the most important thing is to allow users to quickly get the fun of listening to books. Let's take a look at how Fan Deng reads:

• Guide users to answer questions in the most prominent position on the homepage, the must-go path for new users, and understand their expectations and goals
• Quickly match user expectations and core content, and provide users with free audio books
• Set small goals and limited-time experience time to stimulate users to experience quickly

Throughout the entire process, users basically completed the entire path naturally, and they also knew clearly what to do next and how to use the content within the app, without any unpleasant emotions.

1. Long-term retention: Find the addictive loop and cultivate user habits

When the novelty brought by new products begins to fade, our most core task is to make the use of products a habit, so that users can gradually gain satisfaction from products or services. In this way, users will continue to use your products or services without any encouragement, because it has already become a part of their lives.

In the book "Addicted", Nir Eyal introduced his addiction model, also called the addiction circuit. As long as we find the right addictive trigger, we can use it to reinforce user habits.

• For example, Qutoutiao uses a gold coin incentive system to trigger users to read. They earn gold coins by reading, and the gold coins can be consumed and invested in gold coin activities. Repeat the cycle.
• Taking WeChat as another example, we can consider the “like” function as one of the addictive triggers. The user whose post is liked has his vanity triggered and will continue to post to Moments next time. Then, the social relationship with friends is deepened during the interaction, which will prompt him to like others' posts as well.

You see, rewards can not only be material rewards, but also social rewards. What we need to do is to constantly test/compare to find the addictive loop of our products, and then guide users to experience the products in depth step by step.

2. 3 Steps to Develop a Retention Strategy

1. Clarify retention rate monitoring indicators

There is a concept called "North Star Indicator" in the book "Growth Hacker". This indicator is like the North Star, providing direction for operations and products.

In fact, the North Star indicator refers to the key indicator. When improving retention rate, different products will have different retention rate indicators.

For example, for products that users use frequently and make direct payments, the key factor is to increase the number of times users use the product. Only when the frequency of use increases will payment behavior increase accordingly. Typical products include e-commerce platforms such as Taobao. In this scenario, it is very important to pay attention to both short-term and long-term retention rates of new and old users.

To give another example, some products do not require users to visit frequently. Their profit model is a single large conversion. For example, on Baihe.com, a user may only pay a membership fee once in his or her lifetime. Then for operations, it makes no sense to focus on the short-term retention rate of users.

For products and operations, finding reasonable monitoring indicators is the most important first step.

1. Segment to find factors that affect retention rate

After determining the retention metrics that need to be monitored, the next step is to use cohort analysis to determine the retention rates of different user groups.

We can determine the groups based on channels, first visit time, registration time, access functions, preferred content, etc.

For example, two months ago, in order to analyze the factors affecting the retention rate of new users, we divided users into 17 groups according to access functions. After comparison, it was found that no matter which channel the users came from, as long as the users used the stock diagnosis + self-selection function, the next-day retention rate of new users could be increased from 15% to 30%.

In addition to analyzing the factors that improve retention rate, we can also analyze the reasons for user churn through grouping. The key is to predict in advance what influencing factors will occur.

1. Developing strategies using MVT (minimum viable solution)

Well-known business consultant Liu Run said: The essence of business is innovation and efficiency. How to use limited time and resources to create maximum value is a compulsory subject in the business world and one of the most critical core competitive strengths for senior product managers and operations.

In the previous step, we have learned which factors are most likely to improve retention rate through segmentation analysis. Then the most important thing is to quickly verify the hypothesis and get the result. Here, it is particularly important to develop a minimum viable solution.

To give a classic example, Facebook discovered in its early days that user churn was very serious. In order to prevent further user churn, Facebook added a new page after the logout process. When a user is about to leave, the system will read out the five people with whom they interact most closely in the friend list and ask: "Are you sure you want to leave?" Many users who originally wanted to log out were worried that they would never see these friends again or see their status, so they softened their hearts and stayed. After this page went online, it reduced Facebook's losses by 2% within a year without spending a penny and retained 3 million users.

Conclusion

To sum up: retaining users is like the amount of water in the "bathtub theory". Only sufficient water can generate value.

There are two ways to improve retention rate:

1. Guide new users to quickly experience core functions or content to improve short-term retention;
2. Find the addictive loop, cultivate user habits, and improve long-term retention.

We usually use three methods to practice:

1. Clarify the granularity of retention rate that you want to focus on.
2. Perform cluster analysis to find factors that may affect retention rate.
3. Through MVT rapid testing, large-scale solutions will be gradually launched.

Related reading:

1. User operation: new funnel model for conversion analysis!

2. User operation: How to use B-side operation thinking to increase user growth?

3. Product operation: How to use data analysis to drive product user growth?

4. APP user growth: One model solves 90% of growth problems!

5.How to increase users? Take Pinduoduo and Xiaohongshu as examples

6. Triggering user growth: Is user operation just about attracting new users?

7. User operation: What else can you do to attract new users without fission users?

8. User operation: how can financial products awaken dormant users?

9. User operation: How to make use of private domain traffic?

Author: Operation Man

Source: Operation Xia