How to improve user retention? 4 key points!

Before I start sharing knowledge points about retention, I would like to ask everyone: "Should all products pay attention to retention?"

01 Do all products need to focus on retention?

My answer is: not necessarily, because the usage cycle and frequency of each product are different, and different types of products have different requirements for user retention.

Through the above two dimensions, we can find out the significance of retention for the product and whether the product should pay attention to retention.

(1) Products that are sold once and for which users pay directly: wedding photography, matchmaking services, moving services, etc.

These products focus on payment conversion rate and average order value rather than user retention. They are one-time transactions, and these users will leave the platform after consumption. What should be focused on is the promotion resources and channel payment capabilities.

(2) Products with low usage frequency but for which payment is made directly: buying books, movie tickets, etc.

Retention indicators include next-day retention, seven-day retention and 30-day retention. What should be focused on is the user's usage every week or every few weeks.

(3) Products with high usage frequency and direct payment: such as Meituan, Ele.me, Taobao, etc.

The main thing to look at is the consumption frequency and apr value (average user consumption)

(4) Frequent use and users do not pay directly: such as some music apps, news apps, social apps, etc.

We must pay attention to its retention and activity.

02 The impact of product cycle on retention

After the first step, we have determined whether a product needs to pay attention to its retention. Then let’s talk about how to judge the retention index of a product. We need to start from the user’s behavioral habits of using the product. Here we analyze it from two dimensions.

1. How often users use the product

1. Use it every day, pay close attention to the next day's retention: such as Ele.me, Zhihu, Liulishuo, Douyin, etc.
2. Used every week or every few weeks: focus on weekly retention and the user's first-time experience, and no need to pay attention to next-day retention: such as Maoyan Movies, Damai.com, and 12306.
3. For those who only use the product once a month, several months, or even once every 1-3 years, there is no need to focus on user value through retention. Instead, we should focus on the integrity and experience of users when using the product. By occupying the user's mental ladder through membership and brand building, we can continuously drive users to use the product, such as 58.com, Boss Direct, clothing customization, etc.

2. Will users leave the product within a certain period of time after using it?

(1) If users will leave the product, there is no need to worry about retention.

For example, in products for dating, job interviews, postgraduate entrance exams, etc., determining whether users will leave also determines whether the product needs to recall users and activate them. For a dating product, if a user finds a partner and is successfully matched, he will leave the product, and there is no need to recall the user at this time.

(2) Users will not leave the product and will stay with it for a long time.

We need to pay attention to product retention issues, such as Zhihu, Weibo, WeChat, etc., and enhance user value through user life cycle management.

03 Reasons for low retention rate

We can increase the number of users dramatically through paid promotions or events, but why do many users come and then leave, ultimately leading to a low product retention rate?

For a product that has just been launched, what we should focus on is its payment situation? New user? Retention? Virus fission coefficient?

A product that cannot retain users will eventually disappear without a trace, so some people say: When your product does not require any promotion and the number of users is slowly growing, it means that the product has a user market.

On the contrary, if the traffic comes and your product cannot handle it, it will cause loss.

There are several main reasons why product retention rates are low:

1. Insufficient product value or service

There are several situations here:

1. The product has no value at all, it is a false demand.
2. It has short-term value, but after satisfying the user’s needs in the short term, the user loses interest in the product, such as Faceu and deepfake (constantly optimizing products and launching new ways of playing).
3. It has long-term value, but the current technology or services are insufficient, resulting in users not feeling the value of the product. Our customer service can only serve 20 people at the same time. If the number suddenly increases to 100 people, then the other 80 people will not be able to experience the product's services. Another example is the early days of food delivery and taxi-hailing. (Test the boundaries of the service and open the service in a small range)
4. Products need to educate the market, use benefits to constantly stimulate users to develop habits, and use subsidies to enter the market, which was Didi’s early practice.

2. Users do not experience the core services or functions of the product

Users are not experiencing the core services or features of the product, and are not experiencing the product’s aha moment (more on this later). In this case, retention can be improved through the following three core ideas.

(1) Functional retention

Find the key actions or key functions for user retention through data, and attract users to use functions by strengthening new user guidance and providing interest subsidies.

(2) Content retention

Discover and create content that users are interested in. On the official account, we attract fans through various channels and guide them to view high-quality content within the account through attention messages to improve retention.

(3) Retention through social interaction

Help users connect to more social relationships or interactions. For example, Facebook guides users to add 10 friends within a week, which greatly improves retention rate.

3. User-Product Mismatch

Adjust the promotion channels and find channels that match the user profile

04 Steps to improve retention

1. Ideas and steps to improve retention

(1) Determine the core retention indicator, whether to look at next-day retention or weekly retention, and find reasonable testing indicators.

(2) Identify the elements that may affect retention, conduct comparative analysis, and find the optimization direction by comparing various data.

Data statistics are collected from a series of behaviors that may occur when users come into contact with the product, including promotion channels, access functions, content preferences, interactive behaviors, etc.

(3) Through data analysis, find optimization clues, develop test plans, and conduct small-scale test plans.

To put it simply, finding the biggest intersection between retained users and user behaviors is the conversion point we should focus on. The conversion points of different products are different, and they are also the aha momen (moment of enlightenment, experiencing the value of the product) we should pay attention to: (who) completes (how many times) (what behavior) in (how long). Users who complete these key behaviors are more likely to stay.

Each product has a different focus:

How to find the aha moment:

• Identify the value of your product
• Identify key behaviors that help users quickly experience the core value of the product
• Screening key behaviors through data analysis (proposing hypotheses)
• Validate key behaviors through hypothetical experiments
• Guide users to complete key actions

2. Clarify product value

Every product has its core value. The core value of information products (Toutiao) is reading articles; the core value of e-commerce products (Taobao) is purchasing goods; and the core value of reading products (WeChat Reading) is how many books users have read.

3. Identify key behaviors that help users quickly experience the core value of the product

The important behaviors that users generate from the time they come into contact with the product to the end of their experience will lead to subsequent actions by users, which mainly revolve around the core functions of the product.

Taking Zhihu as an example, the behaviors of mass users (content consumption groups) in user stratification include reading articles, liking, collecting, commenting, sharing, following influencers, private chatting, etc.

Based on this, we can make the following assumptions:

• The more users read the article, the more likely they are to stay.
• The more users who like the post, the more likely they are to stay.
• The more users who collect, the more likely they are to stay.
• The more influencers you follow, the more likely you are to stay.
• …

4. Screen key behaviors through data analysis

The above are some hypothetical viewpoints. Later we will use data to verify whether our assumptions are valid and drive operations through data.

By comparing the data, we can find out where the data is abnormal (very high retention/very low retention), and we must also quantify the specific number of times and time. We must use specific data to express the indicators. We can also use 7 days or 14 days as a cycle and find obvious turning points by drawing line graphs, etc.

Find the intersection between retained users and users who have a certain behavior, that is, users who have performed a certain behavior are more likely to be retained;

When we were making websites before, we found that more users stayed when they clicked the "Instructions" button. Later, we strongly guided users to click the "Instructions" button, and the website's retention rate gradually increased.

After we determined the core indicators, we then found quantitative indicators through comparison and analyzed the three types of users through data.

• No key behavior but stayed
• There are key behaviors but they don't stay
• There are key behaviors and they stay

Calculate the proportion of each type of user, and then determine the specific quantitative indicators by analyzing the relationship between users with key behaviors and the number and time of behaviors (xxx times within xx time)

Suppose we find through comparison that the key behavior is "number of collections" + "comments".

5. Verify key behaviors through hypothetical experiments

We found from the data that the key to retention is "number of collections" + "comments"

After the initial verification, conduct a small-scale test to attract more users to complete the corresponding actions of "collection times" + "comment" within a limited time.

6. Guide users to complete key actions

• Strategies you might think of
• Make favorites and comments a newbie task
• Highlight collections and comments visually
• Complete collections and comments and give some rewards
• Strengthen the instructions for collecting and commenting
• …..

If it helps to improve product retention after verification through small-scale testing, then enlarge the test sample and continuously optimize data indicators and guidance processes; if user retention does not improve after testing, then start again at step 3: filter key behaviors through data.

Author: Even

Source: Even