How to activate existing users and improve user retention?

How to improve the activation rate and activate existing users to achieve the goal of user growth? Find the product’s Aha moment, define activation rate indicators, and through data analysis, discover the touchpoints that hinder the user experience’s Aha moment, optimize according to the design strategy, and continue to experiment.

AARRR Model

The AARRR model is also called the Pirate Model because of its predatory growth method. It was proposed by Dave McClure in 2007. The core is the AAARR funnel model, which corresponds to the customer life cycle to help everyone better understand the principles of customer acquisition and maintenance.

Since the development of the Internet industry, people have always been concerned about how to acquire more users. A lot of resources have been invested in the customer acquisition stage, purchasing traffic and looking for the best customer acquisition channels. However, we now have to face the problems that the demographic dividend disappears year by year, the cost of acquiring customers increases dramatically, and the ROI becomes lower and lower.

The importance of user activation

Pinduoduo recently released its first full-year financial report since the company's IPO. As of December 31, 2018, the platform's annual sales expenses were 13.4418 billion yuan, a year-on-year increase of 900% over 2017. In Q4 2018, the platform's sales expenses, mainly for promotional subsidies and brand promotion, were 6.024 billion yuan, a year-on-year increase of 699% over 2017. The losses were greater than expected. The company's stock price plummeted. The truth behind this was the company's huge marketing investment. The company explained that the cost of acquiring customers was high, but the capital market did not buy it.

With the increasing cost of acquiring customers, companies should invest more resources in activating existing users. Its cost-effectiveness is much higher than that in the customer acquisition stage. Josh Elman, a venture capitalist at Greylock Partners and former head of Facebook and Twitter's growth teams, also said that companies should spend at least as much energy and resources on activating users as they do on product development, or even more.

App retention and activation affect retention improvement

Investing resources in the activation stage not only brings high ROI, but also helps improve user retention when activating users. Some market data show that the vast majority of apps lose more than 70% of their users on the second day. A slight increase in the "activation rate" of early users will have a huge impact on later user retention and profitability.

How to activate users and improve retention

First of all, we need to understand what is an activated user? Activated users are people who are using your product. They sign up and use your product for a while or create their first project and related tasks. Most importantly, they begin to understand the value proposition of your product and consider using your product for a long time.

Activate User Definitions

From the above picture, we can understand that the most core task in the activation stage is how to make users feel the value of the product as quickly as possible. Every time we use a product, when we learn its core functions or feel the value it brings to us, we can't help but say Aha.

For example: When we used the beauty camera for the first time, the moment we turned on the beauty function, we were like, wow (Aha), the photos are so beautiful! Yes, this is the Aha moment of the product. Think about other Aha moments you have experienced.

Aha Moments

Therefore, we need to find the Aha moment of the product, let more users experience it, recognize the value of the product, and turn strangers into our loyal users. This is an era where even good wine needs to be hidden if it is not well-known. If users do not feel the value of your product, they will soon become lost customers.

It is worth noting that the Aha moment we think of is not necessarily the Aha moment felt by users. There may be a huge difference between the two.

We can use design thinking to find the Aha moment of our product, organize a workshop for product stakeholders, and use the Kano model to define the key behaviors and functions that you think may be related to long-term user retention. The attractive functions of the product are usually the easiest for users to experience the Aha moment. Then, through data analysis, find the behaviors with the strongest positive correlation with long-term user retention. For example, the 7-day retention rate of users who used function A on March 10 was 23% higher than that of users who used function B. Therefore, function A is very likely to make users experience the Aha moment, and users are willing to use the product again. Finally, user interviews can be used to quickly verify the previously defined results and find the user's Aha moment.

Design Thinking Discovers Product Aha Moments

The Aha moment for each product is different. It may not be a single feature, but a series of behaviors. It can be summarized as: (who) completes (what behavior) (how many times) in (how long).

Different Aha Moments for Different Products

After finding the Aha moment, we need to quantify it with data indicators so that we can follow up and make continuous improvements and measure our design results. It is usually quantified using activation rate: Activation rate = the ratio of new users completing activation behavior within a certain period of time. For example: Dropbox activation rate = users who uploaded a file within one week of registration / total number of registrations. It should be noted that the activation rate needs to be defined based on the Aha moment of your product.

The next most important thing is that we should help users experience the Aha moment as quickly as possible and increase the activation rate. You can quickly conduct a product test in four steps to verify whether the activation rate has increased:

Design thinking improves “activation rate”

In order to increase activation rate, Dave McClure also provides a series of 7 strategies to help users feel the value of the product and generate Aha experience:

1. Social provides popular products that are simple and easy to use
2. Lead Nurturing provides friendly help to users
3. Blank states
4. Content Marketing
5. On-boarding
6. Newsletter sends emails to users regularly to activate users
7. Screencasts Product Videos

These theories may seem rigid and difficult to understand, so let’s take Dropbox as an example to analyze how they use these strategies to activate users and make users experience the Aha moment of the product.

Dropbox

Through data analysis, Dropbox concluded that their users’ Aha moment is: a device has Dropbox installed and contains a file.

The Dropbox team first sorted out the user experience map, found the key touchpoints of users, analyzed the data to see which touchpoints had serious user churn and the reasons for the churn, and optimized the touchpoints and key touchpoints with serious churn. Emphasize the value of the product at every touchpoint and entice users to complete designated tasks, so that users can experience the product's Aha moment as soon as possible.

Beginner's Guide

After installing the Dropbox software, a series of guide pages, in addition to introducing the core functions, also guide users to drag and drop the first file into the Dropbox folder. The goal is to let users experience the Aha moment as soon as possible.

Blank State

The designer did not miss any touchpoints, taking advantage of the blank state of the page, using illustrations and copywriting to reiterate the core functions of Dropbox and guide users to add and share files.

Offer Help

Use dynamic effects to attract and help users complete the file upload operation and provide motivation.

Send emails to users regularly to activate them

After you register and install Dropbox, the official will send an email to your mailbox. The content of the email also emphasizes the core functions of Dropbox. The copy is "Your Dropbox is a bit lonely. Come and add some files!" to attract users to add documents to Dropbox. Experience the Aha moment early.

The above is the design strategy that Dropbox uses to develop around the Aha moment. The only goal is to let users experience the Aha moment as early as possible, feel the value of the product, activate users and improve user retention.

Combined with other strategies such as the famous Dropbox user recommendation system and continuous experimentation, Dropbox's user growth eventually achieved a qualitative leap.

When optimizing the design, in addition to the user activation strategy provided by Dave McClure, we can also use the bj Fogg model to activate users.

Fogg Behavior Model

• Behavior: Want users to take action;
• Motivation: Let users experience value;
• Ability: Make the behavior easy to do;
• Trigger: Prompts the user to take some action.

Summarize

Increasing customer acquisition costs, activating existing users, and improving user retention may be another better option for us to achieve user growth.

Find the Aha moment of the product, define the activation rate indicator, and through data analysis, discover the touchpoints that hinder the user experience of the Aha moment. Optimize according to the design strategy, conduct continuous experiments, and ultimately improve the activation rate and activate existing users to achieve the goal of user growth.

Source: Torch