How does product operation improve user retention rate?

I saw a very cute metaphor on Zhihu some time ago - user retention is like chasing a goddess, how can you chase the goddess? Some routines and methods are always needed.

Look, this is a lovely metaphor:

It is often said that there are more solutions than problems. This interesting method of chasing goddesses mainly revolves around attracting new users, retaining users, and promoting activation. The ultimate goal is to "catch the goddess and achieve strategic mutual benefit and win-win results" (conversion).

I have shared tips on attracting new users: "Attracting new product users, sharing 10 practical strategies". This chapter breaks down and analyzes user retention strategies.

1. What is user retention?

User retention means keeping users using your product and becoming repeat customers.

User retention is generally divided into new user retention and active user retention. By distinguishing the retention status of users with different attributes, we can adopt refined operation strategies for different users. Based on the user base, we can further distinguish next-day retention, weekly retention, and monthly retention through the time dimension.

In order to study user retention in more detail, many platforms will set up custom observation period retention, such as 2-day retention, 3-day retention, 4-day retention, 5-day retention, 6-day retention, 14-day retention, etc. However, generally the data for the first 7 days are recorded in more detail to observe the quality of new users.

2. Why do we need to retain users?

Many companies have a North Star metric of revenue, but revenue is often put on the back burner. Without users, there is no revenue; without user stickiness, there is no commercial value.

It is not what product and operation want to see that users come and leave, and never come back. This means that a series of early product strategies, operating costs, manpower and time are wasted. Therefore, it is particularly important to maintain users.

Operating a user is like running a restaurant. Many factors such as delicious food, good service, comfortable dining environment, and cheap prices may be the key points that trigger users to visit next time. Therefore, the user's next visit (user retention) is the criterion for judging whether the product is valuable. Only users are willing to come back (retention) for valuable products.

Of course, the most important thing is that the cost of retaining an old user is much lower than the cost of acquiring a new user. Looking back at the soaring costs of attracting new customers in recent years, it is like a roller coaster that is always climbing, but we can never see where the peak (the upper limit of the cost of attracting new customers) is.

For operational cost considerations, companies are also more willing to spend money on old users to increase their retention rate.

3. How to achieve user retention?

Regarding user retention, it is mainly broken down from two dimensions. The following analysis takes information apps as an example.

3.1 Product Dimension

The product itself is the key to determining whether users retain. If you want to retain users, you must first make good products and let product quality speak for itself.

However, the product itself is dynamically changing, and the product and operation strategies adopted in different product life cycles are also different. The following will explain how to maintain users in different stages of the product, such as the early, mid-term, and long-term.

3.1.1 Early stage of product

3.1.1.1 Improving user retention by optimizing product experience

As mentioned earlier, in order to get users to “come back again”, the product needs to have its own unique selling point (that is, the Aha moment that makes users excited).

User experience (including interface UI, interaction, content, activities, etc.) is the most critical factor in attracting users to retain in the early stages of a product. The following three information apps all have outstanding product selling points, and many users download and use them just for the sake of their product selling points.

3.1.1.2 Improve retention through accurate recommendations through user tag preference settings

User tag preference settings usually appear in the form of a pop-up window when a new user downloads the APP for the first time. There are many user tags about users’ content preferences, style preferences, KOL preferences, etc. Users can choose according to their own preferences.

The tag preferences of active users usually appear when a new version is updated, and a pop-up window will appear on the screen to prompt users to complete their preference information. There are generally no mandatory regulations for user label settings. Users can choose according to their own needs. If they do not want to set them, they can choose to "skip" the settings page.

The more user tags and user behavior data the APP records, the better it understands users, and the more accurate the content recommended to users through optimized algorithms will be.

3.1.2 Mid-term product

3.1.2.1 Add interesting features

For example, Toutiao has integrated some interesting quick application functions, such as "National Lottery", "Dream Elf", "Hero Sprint", "Classic Go"... By integrating fun small applications, it realizes indicators such as application traffic monetization and extending the usage time of APP users.

3.1.2.2 Focus on user demands and explore user usage scenarios

Users use the APP just like they spend time with their lovers in their daily lives. A few small gestures from your lover in the right situation can make you deeply moved. Try to review your entire day’s actions:

• The first thing you do when you wake up is to check today's weather and temperature. Before you unlock your phone to check the system weather tool, you will find that various apps have already pushed weather information to you, waiting for your "favor";
• When you start your day and log into QQ, a pop-up window will remind you that "a good day starts with a good breakfast", which instantly warms your heart.
• When you work for several hours without taking a break, the lock screen software pops up a box to remind you that you have worked for X hours and take a 10-minute break;
• When you are still working late at night, the office software will remind you warmly to go to bed early.

There are many more heartwarming scenes. The longer you spend with the APP, the more it can grasp your needs. It will always remind you and surprise you in the right scenes, making you love it. Finally, you find that a product has many usage scenarios, and even if it is a niche app, you will feel like something is wrong without it.

3.1.3 Long-term product strategy

3.1.3.1 Create social features

For example, add social circles, social forums and other sections to the APP page.

In 2019, NetEase News added the "Circle" Tab to the APP, replacing the previous "Talk". However, both the previous "Talk" and the current "Circle" are mainly to enrich the social functions of the APP, so that users with common interests can have a place to express their opinions and communicate with each other. It is based on people's social needs.

3.1.3.2 User Incentive System

User sign-in, user points system, and user level system are necessary means for major apps to improve user retention rates. These methods are of great significance in cultivating user usage habits, improving user stickiness and loyalty, increasing user activity, and driving user value conversion.

1. There are several types of commonly used sign-in tools: calendar sign-in, treasure sign-in, development sign-in, and task sign-in;
2. User point system, point mall, and welfare center are commonly used means to carry out user point activities;
3. User level, user identity, user privileges, user medals, etc. are also helpful in improving user retention.

Each of these three types of user incentive systems can reveal many knowledge points if taken separately, and each system segment will be analyzed in detail later.

3.1.3.3 Increase the cost of making users leave

Mr. Yu Jun once said: "Product value = (new experience - old experience) - migration cost".

If a product requires users to pay a large migration cost (such as migrating social circle contacts, migrating storage data, migration time, etc.) before they can use it, then users are likely to be unwilling to migrate.

If you add some cost for users to leave the product, will users choose to continue using it? For example:

Through experiments and tests, we found that when the cost of user leaving the product is increased, users’ desire to stay is stronger.

3.2 Operational Dimension

3.2.1 Retain users through push notifications

Push is a commonly used user retention method for operations. There are many ways to push, including but not limited to APP message push, SMS push, email push, public account push, etc.

Generally, the number of users retained by information apps through push notifications is about 20%-30%, or even higher. Since this channel has a large user base, when you use message push as a user retention tool (different from daily content push) to trigger users, you must pay special attention to planning the push frequency and avoid disturbing users too much and causing them to feel disgusted.

Generally speaking, for non-content APP message push, it is safer for the same user to receive no more than 1 push message per day (for hot news, the same user can be pushed no more than 2 times), and no more than 3 push messages per week.

While ensuring user experience, maximize business value through push. Content apps, such as information apps, can push a maximum of 6 pieces of content to users per day. Pushing more than 6 pieces of content can easily lead to a bad user experience and may even cause users to turn off the push button.

3.2.2 Retain users through activity stimulation

There are many ways to improve user retention, and activities are one of the most immediate ways. For example, fission activities, bargaining activities, support activities, etc., quickly test the effectiveness of the activities and continuously optimize the process.

Operating users is like falling in love with users. What should be done in the early stage and to what extent should progress be made in the mid-term? What is the long-term combat strategy? The more you break down each stage, the more room you have to maneuver.

Apply today’s knowledge points and try to have a long-term relationship with your users to achieve a strategic win-win situation.

Author: Kaka

Source: Kaka's Product Notes