“Without High User Retention Is Your Product Resembles A Leaky Bucket”

Director and co-founder of the platform for web and mobile analytic Amplitude Spencer scates looked published excerpts from the first book in the series “Handbook of grocery Analytics”, describing why the retention rate of users is a more important indicator than their number and activity. Edition vc.ru published a translation of the material. When you are planning to do product development including data analysts, you can find a large number of tips and tactics. It is much harder to choose the strategy to which you can return again and again.

Of course, each product is unique and there is no universal approach. But we have a General methodology for designing questions, answering which you can find out what your Analytics are interesting, as well as to experiment, learn and grow. In the first book we decided to focus on retaining users because that is the most important indicator of business success that is often overlooked, and focus on the number of purchased users, preferences, and daily activity of the audience.

A lot of companies focus on keeping only new users. However, what percentage of users at the moment that can truly be called “new”. You cant just think about new users at the time how many people use your product within three days of the week, two and a half months, and so on. Each of these groups has its own needs, and each of these groups is in another context in relation to your product.

It is possible to allocate three groups. If you look at the database of your users through the prism of the life cycle retention, you will see that you should use tactics specific to each of these groups to try to enable users.

Retention of current and returning users will allow you to better understand the behavior of all users and increase overall retention. In the field of mobile game development is the word for experienced users — “kit”. Despite the fact that “whales” are very few, they commit 70% of in-app purchases. Now think about how it would be stupid if the developers of mobile games tried only activate new users abandoning the creation of “whales”.

This is the reason to focus on retaining current users. Same with hold returning users. Perhaps the idea to help zasomnevalas users to discover the product again and again you start to use it seems silly. But if you do it right, it can become a serious factor in the success of.

This strategy successfully uses Evernote. For users who re-download the application when changing devices, the schedule of deductions is “smile”. With a large number of users, this can be a serious source of income.

Hold returning, current and new users is very important. But to find the approach to each of these groups, you need to use different tactics. If you look at the user base from the perspective of the entire life cycle, you will see that each segment of the audience, different goals and different needs. Each responds to different types of motivation.

When you make a plan of product development, priority should be given to those functions, and errors that concern the key segment of your audience. However, the division of current, new and returning users is not the only method of segmentation. We can also divide users based on their behavior.

Due to different behavioral archetypes, users are divided into groups depending on how they interact with your product. For example, YouTube, there are three groups of users. Each of these groups has its needs, and YouTube have to decide which group is most valuable and important to correctly identify priorities of development of the product.

Perhaps you are not sure what behavioral archetype plays the most important role at different stages of development of the company. In the early years of Facebook, the most priority users were those who were invited to the social network as many of their friends. Virality was the main focus of product development.

Today, more important may be other users — those that share a lot of content. They create an interesting news feed, thereby supporting the growth of the product. Whoever your most valuable users, we need to encourage their activity. The idea is to understand what is the value of your product for users. And earn.

What is the “active user”. Someone who just opens your app or the one who opens it and performs a certain action or set of actions. Without a precise definition of your metric daily or monthly user activity is nothing more than a vanity metric.

Thats why its so important to go beyond the mere activity and track what we call “a watershed event”. This is the main function of your application, which suggests that people actually use your product. Count the number of your daily and monthly active audience using metrics crucial events gives you feedback in real time about how well you promote the product.

Its not the only thing to consider when talking about tools. You also need to figure out which of the three main methods to calculate the deduction you want to use in the first place.

In the case of applications for delivery of the products, where a high minimum order amount and the average order size is also high, we should not expect that users will return more frequently than every two weeks. The fact that users open the app once a day, interesting, but really insignificant to your companys success. However, the social app that relies on a constant flow of new content, will not survive, if people will only return every two weeks to have something to publish. The application must be part of everyday life users. Even if they open it often, it doesnt matter if they are inactive.

The method you chose to measure retention should correlate either with the natural use of your product, or how people should use the product according to your ideas. You need to look at metrics “crucial events” and patterns of current use to find the time interval using your product. How often do people use the product daily, weekly, or monthly.

Knowing the answer to this question, you can more intelligently measure retention and to monitor the improvement of the product. Without high retention of your product resembles a leaky bucket. You can invest in marketing, advertising, and other ways to attract users a lot of money, but remain without regular users — that means no sustainable growth, including revenue growth.

Send a private cases, in which you managed to improve (or, conversely, worsen) the performance of the project, [email protected] Interesting experiments are sure to get heading Growth Hacks.

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