Growth Learnings Part 1: Setting Foundation for a sticky Product.
The content of this post is my learnings from the youtube video from amplitude about setting a foundation for a sticky product.
Why does retention matter
Competition is strong as they say, and lots of apps and things are competing for users attention. it is said that 80% of users drop off after the third day.
So that makes it important for products to improve the percentage of users that remain on the product after properly defined timeline.
You can’t grow your product if you don’t retain the already acquired users, imagine you have a leaky bucket and you keep pouring water in it, it just becomes wasted efforts, and that's how pushing for growth is without retaining users in your product.
Retention is the most critical metric when it comes to building a successful product.
When should i focus on retention
It’s a common misconception that you need to focus on retention after you have gotten a large amount of users. but thats far from the truth, once you get your first 100 users, you need to start optimizing your product for retention.
Note, that only companies that improve their retention rate remain sustainable over time.
Three ways to calculate user retention
N-day retention: This is the percentage of users that use your product on a specific day after the day of their first use. This method of calculating retention is used by apps that need high frequent usage to be successful, example is social media apps, game apps etc.
Unbounded retention: This measures the percentage of users that came back to the product on a specific day after first usage or any day after that day. an example could be all users that used the app at least one month after first usage,.
This can be used for apps that are not expecting a high frequency of usage example is an ecommerce app.
Bracket retention: This is a more custom mode of calculating retention where by u can define the days and put them in a bracket an example is your first bracket could be day 0 and second bracket could be day 1–7 and third bracket could be day 8–30 etc
Depending on your product, you are to pick the best way to calculate retention so that it shows you the health of your business.
Two key metrics for retention
- Define your critical event: This is an action that a user performs that aligns with with the products value proposition. an example can be be uber the critical event is completing a ride.
Questions to help determine critical events
i . What is the one action you want users to perform every time they enter your platform?
ii . What metrics do you care about as a company, which user actions can be tied to this metric?
iii . Do you have different product offerings? if so what are they? what are your success metrics for each?
2. Define your product usage interval: Product usage interval is how often you expect users to use your product.
Steps to determine your product usage interval
Identify: All users who repeated a critical event at least twice within a time period.
Analyse: How long it took users to come back and do the critical event the second time.
Plot: The proportion of users who repeated the critical event within different time intervals.
Identify: the Inflection point in your curve. That's your products usage interval
The Retention Lifecycle
There are different category of users in the retention lifecycle, and we need different retention strategies for each group.
New Users: This are users that are using your product for the first time.
Current Users: These are uses that have been using your product consistently for some period of times.
Churned Users:These are users who were once actively using your product and then became inactive.
Resurrected users: Users who were once inactive for a period, then became active again.
Too many products try to artificially increase their active user count by acquiring new users and not solving retention first.
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