A comprehensive article on user retention!

Faced with the current situation of difficulties in user growth, carrying out refined operations and improving user retention has become an important step to drive sustained product growth and achieve compound interest. At the same time, user retention is also related to product reputation and other aspects to a certain extent.

Introduction: This article will analyze the user retention content in the AARRR model from the perspective of improving the value of retention to the product, the basic goals of user retention at different stages, and specific practical methods to improve retention. I hope it will be inspiring to everyone.

1. What is the value of improving retention? Why do you have to rack your brains to do user retention?

A phrase that is often heard in the industry is "If you don't retain, you will die. A product without good retention is equivalent to taking the path of chronic suicide!" It can be seen that improving retention plays an extremely important role in the product.

Harvard Business Review studied the value of user retention and found that:

• 70% of companies agree that it is cheaper to retain existing users than to reacquire them.
• The CAC cost of acquiring a new user is more than 5 times more expensive than retaining an old user.
• For every 5 percentage point increase in user retention rate, profits will increase by 25 to 95 percentage points.

A product with a high retention rate can bring about a compound interest effect. The longer the product retains users, the greater the benefits gained from users.

Another benefit of high retention is that it can make your word-of-mouth marketing and viral marketing more effective. The longer users use your product, the more likely they are to talk about it and even recommend it to friends and others.

It can be seen that improving user retention is of extremely important value. Without retention, there will be no product development.

2. Stage goals and directions of retention

User retention can be divided into four stages based on user usage and familiarity with the product: initial, mid-term, long-term and user churn stages . The strategies adopted in different retention stages are also different.

1. Early stage of retention

This stage is very important and will determine whether the user will continue to use or purchase the product or service, or "fall asleep" after using it once or twice. Therefore, the initial retention rate can be used as an indicator to measure product stickiness.

There is no uniform length of time for the initial retention period. For sports apps, it may be one day, while for social networks it may be one or two weeks.

There is an advantage in the early stages of retention. The more value users get from the product at this stage, the more likely they are to use the product long term, so the main goal of this stage is to help new users get started, quickly discover the value of the product, and achieve the AHa moment.

2. Mid-term retention

Once users pass the initial retention stage, they enter the mid-retention stage, at which point the freshness brought by the product begins to fade.

To retain mid-term users, the core task of the growth team is to make the use of the product a habit , so that users can gradually gain satisfaction from the product or service, so that users will continue to use your product or service without any encouragement. Next, in the specific practice of retention, we will explain to you the secrets of making users develop habits one by one.

3. Long-term retention

During this phase, the role of the growth team is to ensure that the product continues to deliver greater value to users.

The team must experiment with various methods to continuously improve the product and help the product development team decide when to upgrade existing features or launch new features. The main goal of this stage is to keep users coming back to use the product frequently, feel the core value of the product, and avoid user churn.

4. Lost User Stage

This stage is mainly aimed at lost users, and the main goal is to let users rediscover the value of the product and win them back.

3. Specific practical methodology to improve retention

The above content has emphasized how important retention is to a product, as well as the specific goals and directions of different retention stages. So what are the specific practical methodologies in the process of improving retention? The following content will break down the practical rules of different stages one by one.

1. Confirm retention indicators and activate new users

1) Determine retention metrics – discover the user’s natural usage cycle

When it comes to retention, we may think of next-day retention, three-day retention, seven-day retention, etc., but in fact, each product has its own natural usage cycle, so looking for retention indicators also requires finding a suitable cycle. Too short is unrealistic, and too long is not enough.

Choosing the right benchmark is critical to accurately determining retention.

How to find the natural life cycle of your own products? You can start from two angles:

1. Compare to your peers or competitors : When designing a retention metric, compare your calculations to the highest retention rates for similar products or services from market research, or to the retention rates of successful competitors.
2. Find the answer from your own data : You can find a longer time period, such as 60 days, and then find a group of users who have performed key behaviors at least twice, and then see what the interval between two key behaviors is for most users. This is the natural usage cycle of your users.

2) Identify and track groups

After determining the retention metrics, the next step is to screen the retention data more carefully. You can use group analysis methods to determine the retention rates of different user groups.

Users can be segmented into different types of groups. The most basic approach is to divide them according to the time of customer acquisition. For example, new users acquired in August and September can be divided into different groups, and their retention rates on the 3rd, 7th, 10th, and 20th days can be compared.

You can also create other types of groups.

According to different customer acquisition channels, for example, they can be divided into: Facebook users, Google users, etc.

Understanding what your active users do in your product can help you understand the value they get from your product, because different people may use your product in different ways and the value they get may be different.

Therefore, different groups can be divided according to different user behaviors. For example, e-commerce can be divided into groups that use the APP to place an order once, twice, or three times within the first month. The team may find that the retention rate of the group that places an order three times or more per month is much higher than that of other groups. Therefore, three purchases within the first month after completing registration is a turning point. The team's future focus will be on increasing the number of shopping times within the first month after user registration.

Using cohort analysis helps the growth team observe signs of problems and identify problems.

3) Cracking initial retention

The two most important strategies at this stage are to continuously optimize the new user experience and allow users to experience the core value of the product as quickly as possible. Regarding new user activation, I will use a complete article to explain it to you.

2. Tips for staying with users after retention

1) Let users develop the habit of using the product

The core goal of mid-term retention is to allow users to develop the habit of using the product, thereby consolidating their loyalty to the product.

This means getting users accustomed to using your product every day or week, so that when they want to buy or use a certain type of product or service, they will think of you first instead of your competitors. In other words, they are loyal to you.

① BJ Fogg's behavioral model

Before analyzing how to get users to develop a habit, let’s first understand the key behaviors: BJ Fogg’s behavior model.

The formula of the behavior model: B=MAT. BJ Fogg's behavior model believes that the occurrence of behavior is influenced by three factors: motivation, ability and trigger.

Behavior = motivation * ability * trigger. Specifically for a product, it can be understood as follows:

• Behavior: The action we want users to take;
• Motivation: How much the user wants to complete the action;
• Ability: How easy is the action for the user?
• Trigger: Prompts the user to take action.

② The golden formula for developing habits

A successful product not only needs to allow users to complete key behaviors, but also needs to allow them to repeat this key behavior more than once, reaching a certain frequency until it becomes a habit.

Several key points for users to develop habits :

1. Provide a "reward" for a user's single behavior, and this reward is not fixed and is different each time, so that the user can expect a surprise the next time he comes back;
2. Require users to invest a little effort in the product, and this little effort can increase the value stored by users in the product;
3. External triggers are combined with the user's internal triggers to create a closed loop of participation, so that one user action can lead to more actions.

2) Create a closed loop of participation: Let behavior lead to more behavior

Participation closed loop: It is a virtuous cycle that can amplify "behavior". One behavior can lead to another behavior, thereby increasing the value of each "behavior".

• From a product perspective, we need to find effective “hooks ” that effectively trigger users to complete behaviors.
• From the user's perspective, the design of the product should be consistent with the user's intrinsic motivation, and feedback and rewards should be given after the user takes action to motivate the user to take the next action.

The participation closed loop can be divided into a single-player mode participation closed loop and a multiplayer mode participation closed loop.

① Single-player mode participates in a closed loop

That is, user A's behavior can lead to his next behavior. For example, Facebook will display the photos that users sent one year ago today one year later and prompt users to "re-share" the memory.

The single-player mode participation closed loop can be divided into:

a. Brand Ambassador Program

Such programs typically combine social and practical rewards, providing users with social recognition and other practical benefits by granting them the title of premium users.

For example, black card holders of credit cards often symbolize a certain identity and status because black cards are issued in limited quantities.

b. Recognize user achievements

All users value recognition from a company, even if it is only a small one.

The best way to express recognition to users is to affirm their achievements or behaviors, or use what is known in marketing circles as “action emails.”

Action emails: Send congratulatory emails to users when they complete a milestone.

These notifications may also inform you that other users have taken some actions that can be used as your personal achievements. For example, LinkedIn will send an email to users to let them know that someone has recognized their skills. For example, when a work you posted on Xiaohongshu is liked or collected by others, Xiaohongshu will send a corresponding message to the creator.

c. Personalization of customer relationships

Through machine algorithms and learning, personalized push notifications and services are provided to users based on their characteristics and preferences, such as what TikTok often does.

② Multiplayer mode participation closed loop

User A's behavior can lead to user B's behavior. With the support of social relationships, a user's behavior can instantly affect the capabilities of his entire social ecosystem: friends, contacts, fans, etc.

For example, when Maimai pushes the “Who viewed your resume” function, users will open the APP out of curiosity, thus achieving the purpose of user activation.

3) Control the release rhythm

Promising users that new features will be available soon is a powerful retention bait. Telling users that new features or products will be available soon and what benefits these will bring to them can effectively induce users to keep using the product.

However, if you promise users that a great product update will be coming soon, but then make them wait, you may annoy them.

Apple is a typical example in this regard. Its annual launch of the iPhone makes users eagerly wait for the company to launch the most amazing new products, which gives Apple fans something to look forward to.

4) Continuous guidance to improve retention

As you add new features and gain a better understanding of how your most engaged and satisfied users use your product, you need to continue to educate them about the value they can get from your product.

In the continuous user guidance process, first complete small goals that are easy to achieve, then gradually improve proficiency, and step by step push and guide users to use the product functions.

The specific content can be broken down into:

• Encourage users to use the product correctly;
• Increase the frequency of users using the product;
• Increase the number of different product features used by the same user;
• Allow users to use multiple clients;
• Introduce new features to users at the right moment.

3. Resurrect zombie users

1) Find the reasons for user churn

Reviving zombie users is actually the recall of lost users. Before recalling lost users, the most important thing is to find out the reasons for user loss.

Generally speaking, the main reasons for user churn are as follows:

• Competitive products emerge in the market, and competitors launch new features and launch promotions, thereby stealing users;
• There is another key reason for user churn: the company does not use the best communication method to communicate with users. For example, it does not convey the correct information and does not grasp the communication frequency, which causes users to not immediately think of using the APP and are eventually snatched away by competitors. It is also possible that the company does not grasp the opportunity to build user loyalty, fails to let users develop regular habits or make them feel strongly that they are valued and understood.

Of course, the easiest way to identify churn is to interview users who canceled or stopped using your product and ask them directly why they left.

2) After finding the cause of the loss, conduct workload assessment and take timely action

After finding the cause of user loss, you need to evaluate the next optimization content. For example, if the reason for user loss is due to a hidden BUG, ​​you should take action to fix it immediately and improve the user experience.

Well, that’s all for today’s sharing. Thank you for watching~

Author: Maggie

Source: Maggie