How to improve new user retention rate?

How to improve the retention rate of new users is a major challenge in the product development process. If users cannot be retained, the survival of the product itself will be threatened. The author of this article introduces in detail what retention is, and observes user retention through the retention curve. Finally, he summarizes two methods for retaining new users. I hope it will be helpful to you after reading it.

1. What is retention?

After users use a product for the first time, after a period of time, some users will naturally continue to use the product, while others will no longer use the product. The former are called retained users and the latter are called churned users.

We can define the behavior of "continued use of the product" based on the business, so that the statistical dimensions of retention are more in line with product expectations.

When observing and analyzing retention, the retention rate is usually used, that is, the proportion of users who continue to use the product after a certain period of time among the user group that meets a certain initial condition to the total number of users in the group.

For example: Product A acquired 100 new users through an event on a certain day. It is stipulated that as long as the product has been launched, it will be counted as retention. On the second day, 50 users launched the product. The retention rate of the new users acquired through the event on the next day is 50/100*100%=50%.

The retention cycles we often hear about include next-day retention, 7-day retention, 14-day retention, etc., but these general retention cycles may not be completely suitable for your product. Different product types determine that there is a natural user usage cycle.

For example, for an information product, users are likely to use it every day after they enter the product, so we can pay attention to the changes in retention on a daily basis. However, for a food photography product, users may not take photos again the next day after downloading it, and may only use it when they go out for dinner next weekend.

The purpose of finding the retention cycle of your own product is to focus on the cycle clearly and not be influenced by the cycles that you often hear but are not suitable for you. Just like products such as food photography, if you focus too much on next-day retention, the subsequent plan may deviate from the direction.

You can roughly determine the period that needs attention by analyzing the frequency of product use by existing retained users.

2. Use the retention curve to observe changes in user retention

The retention curve refers to a chart drawn by connecting the obtained coordinates with a curve, in which we select certain cohorts, use the vertical axis to represent the proportion of retained users in the group, and use the horizontal axis to represent the retention period we are concerned about.

Through the retention curve, we can more intuitively understand the changing trend of the retention rate of the same user group and the differences in retention rates of different user groups.

As shown below:

As shown in the figure, after a new user enters the product, the retention rate decreases fastest in the initial period of time. As time goes by, the rate of decline of the retention curve gradually decreases until it stabilizes (ideally).

If we can use some strategies to slow down the rate of decline of the retention curve during this period and make the curve stabilize as soon as possible, then more of the new users we have worked hard to acquire will eventually stay and become effective users of the product.

Note: The scope of discussion in this article is limited to the case where the product's retention curve can reach a stable state. The case where the retention drops to 0 is not within the scope of discussion.

3. How to improve new user retention

There are two major aspects to start with:

• Make it easier for new users to feel the value of the product
• Increase product usage frequency and cultivate new users’ usage habits

3.1 Make it easier for new users to feel the value of the product

Before users decide to try a product, they must first learn about the product through certain channels, have a certain "imagination" of the product, and expect the product to meet certain needs of theirs.

But at the same time, users are impatient in most cases and use products by browsing rather than exploring. If users cannot quickly perceive the value of a product, they will quickly lose patience and choose other products. After all, most Internet products have many alternatives.

Therefore, making it easier for new users to feel the value of the product and satisfying their "imagination" as soon as possible will make it easier for them to stay.

To make it easier for new users to feel the value of the product, we can start from three aspects:

3.1.1 Reduce the cost of getting started for new users

The prerequisite for users to feel the value of a product is to be able to use the product "smoothly". If the cost of getting started is too high, it will greatly hinder new users from using the product, and the probability of churn will naturally increase.

The common costs for new users are:

3.1.1.1 Obstacles in using functions

Users become familiar with products and solve their needs by using functions. If obstacles arise during the use of functions, it will greatly affect user usage.

For example, a fitness product I use launched a new function for recording food calories some time ago. I had a need for it and tried to use it as soon as possible. However, when recording food, I needed to upload the weight of the meal in grams. As an office worker who ordered takeout, I had no way of judging how many grams each meal weighed, so I had to exit this function.

If a clear comparison can be provided so that I can judge the approximate range and make a record, I will not give up on this function directly.

In this regard, when designing products, we should not replace user cognition with our own. Instead, we should break down the user's usage path and examine each operation node from the perspective of the target user to see if there are any areas that may cause trouble to the user.

3.1.1.2 Distrust

Users need to pay a certain cost to use the product, and users’ perception of the cost will be different. When it comes to costs that users care about, such as money, users will become more vigilant.

Especially for new users, who do not trust the product yet, if you do not use some method to "convince" them, they will become hesitant and may even give up the product. We can strengthen credibility and dispel user concerns by targeting points that users do not trust.

For example, many second-hand mobile phone trading platforms have launched a service policy of 7-day no-reason return and one-year warranty, and display it in a prominent position on the product to reach users.

For new users, the worries about buying second-hand goods on the platform for the first time will be reduced a lot.

3.1.2 Guide new users to discover product value

The product itself can meet user needs, but it does not mean that users will definitely be able to feel it, especially new users who are not familiar with the product. Therefore, it is very important to guide users to discover value through product design.

The guidance here does not refer to the guide page or guide pop-up layer, but to product design centered around the value of the product and the behaviors we hope users will have, guiding new users to use related functions.

One feasible method is to analyze which functions the existing users used and which operations they completed in the early stage of entering the product. After that, guide other new users, repeat the path, and observe whether the retention rate increases.

In addition, the design can also be guided by the value that the product itself hopes the user will experience. For example, for content products, users will be asked what content they are interested in after entering for the first time, and customized content will be provided to users based on their choices.

For example, when users enter a community product for the first time, they will be guided to follow certain users. After the users post content, they will be given some attention and comments. These are all means of guiding new users.

3.1.3 Focusing on core values, exploring more diverse usage scenarios

As the product develops, more and more new users are attracted and their needs become more and more diversified. Even with the same general direction, there can be many entry points, and the initial value of the product may not satisfy some of the users.

In addition, new users may not directly experience the core value of the product, but may first feel the related value, and then feel the core value as the depth of use increases.

In this regard, we can explore more usage scenarios around core values ​​to meet the needs of users with different needs.

3.2 Increase product usage frequency and cultivate new users’ usage habits

Even if new users have used the core functions of the product and experienced its value, we still cannot relax. At this point, users do not have the habit of using the product. Over time, they may “forget” the existence of the product and eventually leave.

We need to use some methods to make users remember us, increase the frequency of use, and cultivate users' usage habits.

There are two ways to cultivate user usage habits:

3.2.1 Let users "passively" remember us

The most common methods are SMS and push. When using this method, you need to be careful to grasp the boundary between awakening and disturbing, and be as appropriate as possible - it is necessary to attract users and use the product, but at the same time avoid blindly forcing awakening and causing users to feel negative emotions.

It is best to wake up users by using information related to them. For example, for e-commerce products, if a user has searched for a certain product but did not buy it, we can assume that the user is interested in the product. If the price of the product drops, we can notify the user in time to achieve the purpose of waking up.

3.2.2 Let users "actively" think of us

Making users "actively" think of the product means using certain strategies to enhance users' willingness to use the product. Users can be stimulated and encouraged to actively use the product by setting up exclusive benefits for new users, strengthening the new user growth system, and increasing the cost for users to leave.

In addition, more and more products are increasing the frequency of users opening the products by adding content attributes or designing small games that allow users to gain benefits with simple operations.

4. Conclusion

This article describes how to improve new user retention from a product perspective through two major directions. It should be noted that improving user retention is something that requires long-term attention, and it is not something you can sit back and relax after launching a certain function or optimizing a certain copy.

Author: Mr. Hai

Source: Slow Words