The universal formula for product user retention!

Retention is the heart of a product. It is foolish to talk about growth and conversion without retention. Let us drink this bitter cup of retention together.

Product managers are responsible for various product indicators, but there are three indicators that no one can avoid: "growth, retention, and conversion."

In fact, in a product team with clear division of labor, there are generally two types of roles: Role A is responsible for product growth, and Role B is responsible for product retention and conversion. However, in startups or smaller product teams, the product manager is likely to be responsible for all parts.

If you ask me: Which one is easier to master: growth, retention or conversion?

I can only tell you that unfortunately all three are closely linked and none of them is easy. But if you ask me again which skill should be mastered first, I will answer without hesitation: retention .

Retention is the heart of a product. It is foolish to talk about growth and conversion without retention. Let us drink this bitter cup of retention together.

Let's take a look at the following examples: Assume that Product A and Product B both add 100 new users per week, and the next-week retention rate of new users is 60%; the next-week retention rate of Product A decreases by an absolute value of 3%, and the next-week retention rate of Product B decreases by an absolute value of 1%.

As we all know: Weekly active users = new users this week + retained users last week + retained users the week before last +…

After 30 weeks, the weekly active users became as shown below:

I never expected that the daily active users of the two products would differ by almost 1 times.

So Lu Xun said: If retention is not good, growth and conversion will be in vain. According to international practice, before we start the hands-on operation, let me feel your bones:

What do you think is the essence of retention?

A: Users are interested in the core value of your product and are willing to stay

B: Try every possible means to keep users

If your option is B, then Auntie just wants to say: If you want to keep everyone, you will find that no one can stay in the end.

Little Notebook: Let more users perceive the core value of your product in the shortest possible time, and ensure that this core value can meet their current needs, so that users can be retained.

So, once the problem becomes concrete, will it be easier to solve? You only need to solve two problems:

1. Find out what the core value of the product is?
2. How to find the right users as much as possible and make them immediately perceive the core value of the product?

Step-by-step operation: How to find the core value of the product?

The best situation must be that the core value of the product you set is consistent with the user's perception, so that retention will be higher. For example: when you hear the name "Xiaomi", you think it provides cost-effective products. When you hear "Pinduoduo", you know it can meet your needs for low-price shopping, and so on.

but! ! Things often go against our wishes. In many cases, the core value of the products we provide is far different from the users' perception! ! (Heartache) For example

So, auntie took out a powerful weapon from Doraemon’s pocket to rescue you, da! clatter! clatter!

1. Function retention rate: users who use the function again in the current cycle/users who used the function in the previous cycle;
2. Active user ratio: the number of users who use the current function in a certain period / the number of active users in that period.

The value of this product function value map lies in that it can help you find the core value of the product from the user's perspective in the first place! Isn't it amazing?

Then, let's follow Aunt Lisa to make a map like this:

• Step 1: Use Excel to sort out the key functional points in the product
• Step 2: Find data to find out the number of active users of the product, the number of active users of each function, and the retention data of each function within a certain period of time (preferably half a month).
• Step 3: Draw a bubble chart with the function retention as the X-axis, the percentage of active users of the function as the Y-axis, and the number of active users as the bubble size.

After getting the bubble chart, you can circle the functional positioning of your product according to the following rules~

• Core functions: functions with large user base and high retention. It represents the recognition of this value by the vast majority of users. It is the most important functional point in the product and the key point for retention.
• Popular functions: functions with a large number of users and a high retention rate. This type of function can help you understand how most users use your product and find areas for improvement.
• Low-quality features: Features with moderate user volume and low retention. The more “low-quality” features you have, the more your product interferes with users, and the worse the product retention.
• Niche features: Features with low user usage and moderate feature retention. You can find potential features from them for iterative optimization.

How about it? Is it simple? Is it exciting? ! Get moving!

Therefore , the key to improving the retention of new users is to let users quickly feel the value of the product; and to improve the retention of existing users, it is to build the core functions of the product, reduce interference items, cultivate users' usage habits for the product, and let users repeatedly experience the value of the product.

For example: Baidu Browser, the core function is search, so when you open this product, there is only a search box. Pinduoduo’s core function is to buy good products at low prices, so no matter when you open a product, you will receive red envelopes and coupons.

Hurry up and make one~

Step 2 of the Step-by-Step Guide: How to find users who like the core values ​​of your product?

Once the core value of the product is found, the second step becomes very simple. What we need to do is to find as many users who are interested in your product as possible through appropriate channels. Auntie will teach you how to make a product retention framework:

First, segment your users. Users who register on that day are new users, while users who registered before that day are old users.

1. For new users, you can group them as follows

Method 1: Group users according to their source channels, observe their retention, find the channels with the best retention, and increase investment in these channels.

Method 2: Group users according to the functions they used on the first day and observe the functions that can bring high retention. Optimize the onboarding guide so that your new users can experience the high retention function of the product during the onboarding guide.

In this way, you can find the advantageous channels and behaviors of your product and make continuous optimization iterations.

Believe me, as long as the experiments are done enough and fast enough, and the samples are sufficient, we will soon see improvements in the second and third retention rates.

2. For old users, you can do the following grouping

Method 1: Group users according to their preferences for functions, compare the differences in user retention for different function preferences, and then conduct tiered operations for user groups, using the functions they like to promote activation and recall, and reduce long-term product churn~

Method 2: Compare user group A with a large number of users and high long-term retention with user group B with a small number of users and low long-term retention, compare the key behavioral differences between the two, raise some targeted questions based on the explored data, and conduct a sample survey on lost users.

You never expected that! A few visual charts can help you quickly find advantageous channels and intervene in product operations based on user behavior, which will greatly increase product retention.

The content is of a certain degree of difficulty and is suitable for product managers in grades 3 to 5, but it is not difficult to get started. I believe that if you continue to conduct product experiments and conduct exploration and summary, your abilities will surely improve by leaps and bounds.

Ending Easter Egg

The following figure shows the retention data of the product after our team used this method. The data has been rising all the way, and in February of this year, it has increased to an average retention rate of 50%+~