From 0 to 1 million users, three tricks to retain users

User retention is a difficult problem that every company has to face. As the mobile Internet enters the second half, the traffic dividend is gradually being eaten up, the Internet's penetration into the population is becoming more and more thorough, the cost of acquiring customers is getting higher and higher, and the era of traffic everywhere is gone forever.

How to retain users and enable existing users to contribute greater value has become a top priority for most companies when formulating operational strategies.

Generally speaking, if a user starts using a product within a certain period of time and is still using the product after a period of time, then this user is a retained user within that time dimension.

In routine operations, the three time dimensions of next-day retention, seven-day retention, and monthly retention are used more frequently. Suppose you acquire 100 users at the beginning of the month, and at the end of the month 80 of them are still using your product, then the monthly retention rate is 80%.

1. The Importance of User Retention

1. Save costs and increase revenue

According to a study by Harvard Business School, the cost of acquiring a new user is 7 times higher than the cost of maintaining an old user. When the user retention rate increases by 5%, the company's profit will increase by 25%-95%.

This data is not applicable to every company, but it can provide us with some reference. Loyal users can provide very long-term direct value and added value to the product, so from the moment you acquire the first user, you should think about how to retain the user. Retention is also a part of customer acquisition.

There is a particularly bad phenomenon now. Many start-ups have misinterpreted the classic theory of "rapid iteration, small steps and fast progress" as: don’t care about anything else, just go online first, and then find a solution after going online. Without even the most basic user operation strategy, the faster you get on the market, the faster you’ll die.

2. Determine whether your product provides a false demand

If your product has a very low user retention rate and you can’t find any problems in other areas, you should ask yourself, is your product valuable to users? Is it providing a false demand for self-entertainment? This problem is particularly prone to occur in start-up companies.

2. Three tricks to retain users

1. Start from the source, clearly define, and acquire customers accurately

1. Build a user model based on product goals, analyze the characteristics of the target user group, first figure out who you are facing, and then start operations.
2. How to clarify the weights of different time spans of data indicators? What is the acceptable user retention rate? What are the user paths and conversion funnels? How to judge whether an operation strategy is correct based on a certain period of user growth data?
3. Conduct a feasibility analysis of customer acquisition channels. Currently, common customer acquisition channels include: app stores, information feeds, searches, APP direct investment, new media direct investment, industry KOLs, cross-industry cooperation, etc. Any one of these requires real money.

Therefore, we must think clearly about the combination strategy of customer acquisition channels at the beginning, and try our best to maximize the effect and acquire customers accurately.

2. Increase the frequency of users using the product

1. Brand tone: Building a brand does not necessarily require endorsements or advertising. The current industry situation is that every track is crowded with people, so making users remember your product is half the battle. Retention is a combination of the real and the virtual. Product functions are real, while brand tone is virtual. Give the product an emotional tone and express it through UI interface, copywriting and operation methods. In an era where everything is high-end, small and beautiful things are easier to be remembered.
2. Points activities, levels, and marketing activities are the simplest and most effective means of promoting activity. They use positive incentives to create an emotional bond in users, which then translates into action, making users unable to help but open the product from time to time to take a look and gain a sense of accomplishment and satisfaction.
3. The first method of creating interesting functions is to add small functions such as sign-in and clock-in, without affecting the use of the core functions of the product, and integrate them with means such as giving points and upgrading levels to make users develop product behavior inertia. The second method is to deeply integrate product functions and develop interesting small functions or even small tools. Since the threshold for trying interesting functions is lower, it can serve as a transition for retaining users for a long time.
4. Daily push notifications and SMS push notifications are a double-edged sword. If not used properly, they can be annoying, but we cannot throw the baby out with the bathwater. As long as you control the frequency, timing and content of push, push may be the most direct means of promoting activation.
5. Update reminder: Maintain a fixed update frequency to keep users fresh about the product.

3. Increase users’ sunk costs

“When people decide whether to do something, they not only look at whether it is good for them, but also whether they have already invested in it in the past. We call these irrecoverable expenditures, such as time, money, and energy, sunk costs.”

1) Monetary cost

For paid products, the threshold for first payment should be lowered as much as possible. Once the user has paid, he will feel that he will be at a disadvantage if he does not use the product a few more times. With proper guidance at a later stage, the possibility of this user leaving is very small.

2) Time cost

For example, for content products, users spend a lot of time and energy to output content and write comments, and these contents remain in the product. As long as the core value of the product remains, users will not leave easily.

The same principle applies to the points system and user levels mentioned earlier. Users spend time to manage something, and even if this thing may no longer have any value to them, they are reluctant to throw it away. This is the sunk cost psychology at work.

3) Emotional Cost

The most common way is to let users introduce interpersonal relationships into the product, or establish relationships with other users in the product. This relationship does not necessarily have to be a strong relationship, it can also be a weak relationship based on the product as a platform.

Compared with monetary and time costs, product retention is best if it allows users to invest emotionally.

3. Avoid the following misunderstandings

1. Don’t do anything that harms users just for the sake of short-term data growth. Think long-term.
2. There is no end to user retention. It requires continuous optimization. Don’t think that doing one thing can solve all problems.
3. Always pay attention to the value of your product and don't create false demands.

Author: Notes by Shi Guipeng

Source: Shi Guipeng's Notes