How to improve APP’s next-day retention?

What is next-day retention?

Next-day retention, often referred to as “secondary retention” within the company, is to see whether a user who comes to your app on the first day will come back on the second day? If they come, it means that the user is retained on the next day, so there is an indicator called "next-day retention rate".

For example, if your app has 100 registered users on one day, and 50 of them come back the next day, the data shows that the retention rate on the first day is 50%.

The Importance of Next-Day Retention

Next-day retention is the first step in user life management for every App, and I personally think it is also the most important step.

The benefits of improving next-day retention are far greater than we imagined. What are the benefits?

1. The improvement in next-day retention has a terrible impact on DAU, which is very important to investors. Even if you only improve it by 5 points, your DAU may double in a year;
2. Next-day retention is a measure of the quality of market launches. That is, the higher the next-day retention, the better the user quality.
3. Next-day retention is an indicator of user recognition of product value. Whether a product has achieved PMF (Product-Market-Fit) can be seen at a glance from the next-day retention. Once the product value is confirmed from a market perspective, it will bring strong confidence and motivation to the entire team;
4. The improvement of next-day retention not only broadens the width of the entire funnel, but also greatly improves the conversion rate of subsequent retention payment and sharing due to the good first impression, that is, the overall ARPU will increase.

How to improve next-day retention?

After talking about its importance, let’s talk about some practical stuff: how to improve next-day retention?

First, let’s recall a scene where we go to a restaurant for dinner (product managers always like to give such bad examples, haha):

1. One day you hear from a friend that a certain restaurant is delicious, it has certain special features, and a certain dish is particularly good, so you must go and try it. Or you see a store on Dianping that is super good, has very high reviews, and has very attractive pictures;
2. You are immediately attracted to it, so you give up your Saturday happy hour of sleeping in and ordering takeout, and take a 1-hour bus ride to come to this store;
3. At 50 meters away from the store, you can see many people queuing up; at 20 meters away, you can smell a very fragrant smell that makes you start to drool;
4. Then...queue, 10 minutes, 20 minutes, 30 minutes...1 hour;
5. The manager comes over and sincerely invites you to come into the store. When you enter the store, all the waiters in the store shout "Welcome" in unison.
6. Then the waiter will enthusiastically recommend you a dish that is particularly delicious and a must-order! A certain dish can be delivered for free without ordering it! …(The next thing is to eat, nothing much to say);
7. When you finish your meal and pay, the manager will give you a coupon or a business card or add WeChat like Haidilao, with the purpose of telling you - there will be a discount next time you come!

The story is very fluent, and we are already used to it, but there are actually many details in it, please think about it carefully!

1. Recommendations from friends and advertisements

This is the main way for most products to attract new users, and it is also the impression that new users have when they first come into contact with the product. The key to this impression is whether it can attract people. There are two basic points for the dissemination of information - simplicity and clarity , so the information can be spread faster and wider. It is simple because it is easy to remember and say, and it is clear because it can be understood immediately. So reflect on this: Can you use one sentence to simply and clearly explain what your product does ? If you can't explain it clearly, imagine how efficient your users or advertisements can be in spreading the word?

The slogan of Fan Deng Reading is: "Read 50 books a year". It's just these 7 words. So old users will recommend it to new users and say: "Fan Deng Reading is good. Teacher Fan Deng will take you to read 50 books a year. It's very easy and you will gain a lot!" When your information is simple and clear enough, it will be easier for users to spread it and the effect will be better.

So, how do we implement this in our products? First of all, you need to clarify the positioning of your product - which of your core functions meets what needs of users? If the positioning is clear, then the App’s startup page, various welcome messages and introductory messages within the App, and even every other small detail will hint at this positioning.

2. Users spend a lot of money to go to the store

Going to a store involves transportation costs, time costs, (fat otaku) opportunity costs, etc., and going to an App also involves time costs for downloading the App, traffic costs, etc., especially in the Android system, where users will encounter various authorizations and application market interceptions during the download path.

If the cost is high enough, users will be lost. Even if the cost is not high, it will increase the psychological burden on users, and they will start to doubt why they should spend so much energy on doing this.

3. Proximity to the store and queues

When users see a long queue of people in front of the store and smell the fragrance, their first reaction is: "Yeah! We've come to the right place! This trip is worth it." With the rendering of these atmospheres, users will feel a little relieved of the psychological burden of the previous cost of going to the store.

So, how to implement it in App? When users see screenshots, comments, and downloads of the app market, during the startup, product introduction, authorization, and registration and login processes, have you delivered a message to users: "This is where you want to be. You've come to the right place!" Only when users feel this confirmation, will the loss in the registration process be slightly reduced (loss in the registration process means zero second-day retention)

4. The store manager greets you and recommends delicious dishes

Have you ever imagined that when you enter a restaurant, there is no one to guide you, no one to welcome you, you don’t know where to sit, how to order food, and you don’t even get any customized enjoyment! Will you leave here immediately?

So please think about it, product managers, what do you present to your users on the first landing page (usually the homepage) after their users successfully register? It means the door is wide open, and several functions are displayed there, allowing users to choose and try them by themselves? Or is it like Tik Tok, where the most delicious dish (a high-quality video) is presented right at the beginning, or is it like the new customer process of English Fluency that I talked about before, with real-person interaction and guidance? (For details, please refer to my previous article on how to improve retention in English Fluency. There is a link at the bottom)

The landing reception after registration is very important because it is the first experience of users when they enter the App. If it is good, they will stay, and if it is not good, they will leave. It can be said to be the key to retention on the next day.

We know that there is a theory in growth that the faster new users are exposed to the core value of a product, the higher the user retention will be . Product managers, can you calculate how many steps your new users have to take after registering, and how many irrelevant elements they have to avoid before they can finally access your core functions? (The core function I want to talk about here is the function that can bring Aha moments to users).

So, how should we find the core functions in the current App? How to let users reach it in the fastest way?

The first step is to list all the functions in the App that you think are your core functions.

Observe the number of new customers using each function, as well as the next-day retention rate of these new customers, and then make a ranking from high to low. At this time, you will be surprised to find that the next-day retention rate of function A reaches 80%-90%, and then you will shout - I found the AHA moment... Brother, look carefully, there are only 10 people using this function A... This number of users is not worth considering at all. Then you can move on and eliminate the functions that are rarely used by users. It is best to observe which functions account for at least 20% of new customer registrations. Generally, the retention rate of these functions is about 60%-70%. At this point you can guess that you may have found the core functions, and there are usually 3-4 such functions. But at this point you still have to go back to your original product positioning and consider what your core function is.

The second step is to find the magic number.

I think everyone knows the magic number. If you don’t understand it, please search it on the site yourself. I won’t explain it in detail. You guess that function B may be the core function that can bring high next-day retention, and you need to split the usage of function B. For example, let's assume that function B is in a live broadcast room. Then you need to observe the number of new users entering the room on the day of registration and the corresponding retention rate of this group of users . The result is probably that most people only enter 0-3 times, and their average retention rate is 15%. Starting from 4, the retention rate begins to soar, and remains stable at around 7. At 10, it may be very high or very low. However, the number of users at this point is already very small, so it has great reference value. So, we can roughly confirm that the core functionality and magic number is that the user enters the room 4-7 times. To be more precise, we need to measure how much it costs for the user to reach this number.

Step three, what? ? ? To achieve high retention, users need to enter 7 rooms. Do we have to force users to enter and exit 7 times?

No! At this point you have to dig deeper. Why did the user enter the room 7 times? Are they unable to find the content they like (at this point you can look at how long the user stays in the room each time)? Users need to refresh the page about 7 times before they can find the content they like. So, can I create some recommendation mechanism so that users don’t have to search 7 times, but only 5 times, or even 3 times, to find the content they like?

Step 4. Based on your thoughts in step 3, you may start to consider collecting tags and recommendation mechanisms to allow users to quickly find content they like. Here I want to emphasize one sentence: finding core functions and magic numbers is not a result, but a process! What you are really looking for is the core value, what makes users happy and makes them shout - Aha! ! ! !

As mentioned earlier, the dish the waiter recommends to you is the best one in their restaurant and most people like it! You'll want more after you finish eating! This is to recommend core functions to you so that you can try them as soon as possible.

5. Get coupons after eating

In order to retain users, we will add some material rewards, some points, some coupons, and even some physical gifts to the novice tasks. As long as users complete tasks (usually tasks are designed to access core functions that reach the magic number), they will receive rewards. The logic is the same as the manager giving us some small favors after our meal as an incentive to come back next time.

Supplements to improve next-day retention

The above is probably the entire thinking framework for improving next-day retention:

1. First of all, we need to clarify the product positioning and form high-quality communication;
2. The new users you attract need to be motivated at every stage before they come in.
3. When new users come in, they should be guided to take a good seat and order good food;
4. Provide small favors to encourage new users to come back next time.

This is a new user path process. The product manager needs to quantify each node and observe where the problem occurs. However, there will inevitably be loss in any process. For these lost users, you must take recall measures. The later you recall them, the worse the effect of user return will be. Therefore, once you determine that the user will not stay the next day or will not come back within 3 days, you must consider the benefits and recall them.

The above is my current summary of some of my thoughts on next-day retention, but I haven’t gone into too much detail. You can first have a concept, and then use this idea to experience various excellent products and consider how they achieve retention.

Related reading:

1. User growth step 1: How to retain users?

2. Product operation: new user retention and conversion strategy!

Author: Joseph Shida

Source: Joseph Shida