Mastering Product-Led Growth: Proven Strategies for Boosting User Engagement, Retention, and Expansion (Part 4)

Introduction

You’ve just clinched the sign-up. The initial hurdle is crossed, your product has a new user. But hold the celebrations; the marathon has barely begun. The challenge starts here — keeping your users engrossed, committed, and making your product an integral part of their lives.

Credit: Andrea Piacquadio

This is the fourth installment in our series that is your GPS to the road of Product-Led Growth (PLG) at your company. Let’s revisit our journey so far:

1. Part 1: The fundamentals — demystifying PLG and its compelling benefits.
2. Part 2: The PLG playbook — a detailed roadmap to a product-led motion.
3. Part 3: Optimizing early funnel stages — acing conversions.
4. Part 4: Maximizing retention and engagement post-signup
5. Part 5: Turning your best users into advocates

In this edition, we’ll delve into the art of user engagement, retention, and expansion post-signup.

Maximizing Engagement

Do you recall the time you discovered Spotify’s personalized playlists and suddenly found yourself lost in a world of music curated just for you? That’s user engagement in action.

Let’s dissect some tactics for keeping users interested and actively using your product include:

• In-App Messaging: Use prompts and cues to guide users to key features. Think Duolingo. The language learning app uses prompts to remind users of daily lessons, keeping them on track in their language-learning journey.
• Content Upgrades: Release fresh in-product content and resources regularly. Regular, fresh content like Netflix’s ever-evolving catalog keeps users returning for more.
• Community Features: Offer ways for users to interact with each other. Take inspiration from Airbnb’s community section, where users share experiences and connect over shared interests.
• Gamification: Apply game elements like points, levels and rewards to drive usage. The Starbucks rewards program is a classic example. Customers earn stars for purchases, which can be exchanged for drinks and food, incentivizing usage.

Reducing Churn and Improving Retention

Remember the time you were halfway through your gym membership and started slacking off? Your gym offered a personal training session to get you back in the groove, and just like that, you were a regular again. That’s a snapshot of reducing churn and improving retention.

Here’s how you can do it for your product:

• Surveys: Measure NPS and satisfaction to identify issues proactively. For example, Uber asks for your rating after each ride, providing an opportunity to address concerns swiftly.

• Account Reviews: Check in with at-risk users to address concerns. Like a good gym trainer, see how your customers are feeling and help them derive the best value from your product. HubSpot, a marketing software company, has an account management team dedicated to checking in with at-risk customers. By proactively reaching out and addressing concerns, they’ve increased retention. In one case, they turned around a customer about to downgrade their plan by resolving technical issues and providing guidance on better leveraging HubSpot’s tools.
• Loyalty Programs: Offer rewards for milestones and increased usage. Again, Starbucks rewards shine here, making customers feel special and appreciated. Starbucks rewards members who reach milestones like 25 stars (visits) with free drinks, food, and other benefits. This incentivizes customers to make Starbucks their go-to coffee spot. Starbucks has found that members of its rewards program visit 2–3 times more frequently than non-members.

• Measure Success and Impact: Define key metrics for tracking retention program performance. Monitor metrics like user retention rate, repeat purchase rate, churn rate, and customer lifetime value. Compare results before and after implementing initiatives to quantify impact. Success comes down to the numbers. Ridesharing app Uber monitors metrics like cancellations and average user rating to identify unsatisfied customer segments. By tracking this data in real-time, customer support reps can rapidly reach out to drivers and riders when issues arise to get ahead of churn risks.

• Test and Iterate: Continually test variations of your retention campaigns to identify the most effective strategies. Run A/B tests on elements like email copy, offers, and targeting criteria. Analyze performance data frequently and double down on what works. Optimization is key to improving retention over time.

Improving Retention Requires Understanding your Customer Cohorts

Not all users are created equal when it comes to churn risk. Leverage usage data and analytics to identify high churn risk segments of your user base. For example, users who have stopped engaging with key product features, reduced usage frequency, or unsubscribed from emails may be ready to churn. Target these users for re-engagement campaigns. Spot at-risk users the way Netflix spots when you’ve stopped binge-watching a series, and then reels you back in with personalized recommendations.

Survey for Qualitative Insights

Quantitative data isn’t enough. Regularly survey users who are at risk of churning to understand why they are unhappy. This qualitative feedback is key to addressing the root causes of churn.

Optimize for Your Business Model

The tactics to reduce churn differ based on your business model. For subscription models with recurring revenue, focus on renewals, retention discounts and account reviews. For transactional models, build incentives to complete the next purchase and win back lapsed users with promotions.

Facilitating Expansion and Usage Growth

Ever find yourself adding an accessory to your cart on Amazon simply because it was recommended with your purchase? That’s expansion and usage growth at play.

Let’s bring this home to your product:

• Product Recommendations: Suggest relevant add-ons and upgrades in-app. Upsell by suggesting add-ons based on user activity, just like Amazon.

• Smart Bundles/Packages: Make it easy to upgrade with discounted bundles. Take a leaf out of Adobe’s book with its Creative Cloud suite — a bundle offering greater value than individual software purchases.
• Pricing Optimization: Test plans to maximize perceived value. Don’t assume you know how much your customers are willing to pay! Experiment with pricing tiers like Slack does, making sure users feel they’re getting their money’s worth. Hulu A/B tests various pricing tiers and bundled plans to maximize revenue per subscriber. They offer options like ad-supported plans, no-ad plans, student discounts, and bundle packages with Disney+ and ESPN+. This testing has allowed Hulu to find pricing that monetizes its different customer segments.

• Cross-sells: Offer complementary products likely to drive additional spending. Asana does this well, nudging users to try its other productivity tools.

Engage in the Conversation

The ball is in your court now. What’s your masterstroke for enhancing post-signup engagement and curbing churn? Join the conversation below and let’s rise by lifting each other.

Part 5 is just around the corner, where I’ll decode the secret of turning your power users into brand advocates. Until then, keep striving, innovating, and rewriting the rules of user engagement.

If this piece sparked a light bulb moment for you, don’t forget to share it with your network. Together, we can transform products, shape experiences, and redefine what’s possible.

Remember, as creators, we have the power to turn the ordinary into extraordinary. Let’s ensure our users don’t just use our products but find value and joy in them. That’s when the real magic happens. Stay tuned!