11 Ways to Build Retention Into Your Product
Retaining users is critical to your startup’s success. But how do you do it? In this post, we’ll discuss 11 concrete ways to keep them coming back.
Startup growth breaks down into two components: The first is getting lots of users, ideally by creating a viral product. The second piece is keeping those users, also known as “retention”. Even small differences in retention can make a huge difference to business success: Higher retention increases increases your active user numbers and your revenue, while decreasing your costs. But while everyone keeps emphasizing how important retention is, and how it’s getting harder it is to retain users, I haven’t seen much out there on the web about how to actually do it. Thus this post:
What are tangible features you can build that will increase retention and keep users coming back?
Every startup wants to get great retention, and is hoping their product has the green retention curve below. But some end up with the red curve. Here we’ll discuss retention techniques that will get you the green curve, not the red curve.
There’s a quality range of retention techniques. The best ones are built deeply into the product, while others work for any product. The worst ones are generic, sometimes desperately spammy notifications. Here are the 11 retention strategies we’ll discuss, ranked by annoyingness:
The strategies on the left side feature notifications that are caused by actual people interacting with the user. In the middle, you have mechanisms where relevant information is shared back with the user at key moments. Towards the right, you have unsolicited and potentially unwanted reminders which will annoy your audience.
Variable Rewards
Highly retentive products often draw in the user with variable rewards. Research shows that levels of dopamine in the brain surge when you’re expecting a reward. Introducing variability into the reward multiplies the effect. Variability creates a hunting state, activating the parts in the brain associated with desire. I recommend reading Hooked if you want to learn more about this.
Classically, slot machines and lotteries have benefitted from this effect, but variable rewards are prevalent in popular tech products as well. Building variable rewards into a product is incredibly powerful — please use them for good, not evil.
1. Human interaction
Enable open-ended conversations and interactions between users. Notify users of incoming interactions, thus creating variable rewards.
The best products keep you using them because they have unstructured, real-life interactions going on. Look at these Twitter, Facebook, and Instagram home screen icons:
If you’re at all like me, you immediately feel that tingle of curiosity of wanting to click each of these icons to know what the notification is about. You want to click it because someone has liked your tweet, replied to it, retweeted it, or maybe even mentioned you in one of their tweets. Once you’ve clicked on it, you get the relief of knowing what it is, along with the dopamine hit that comes from variable rewards you are presented with.
Messaging apps are still powerful, but slightly less so: You’re still communicating with real people, but the messages aren’t visible in public. While you still want to see the messages, you’re less afraid about looking dumb in the public square.
This retention mechanism is very valuable because of the open-endedness of the rewards. If you know what you’re going to get from clicking, it would be far less exciting to click on the notification.
2. Turn-based Structure
Establish a pattern in your app where one person is expected to act first, followed by an action of the second user. The first user is notified of the second’s move and brought back into the product.
This one is very common in games. Some apps have a turn-based mechanism, where you are expected to play a game. One example is Draw Something:
This is actually pretty structured, which makes the game easy to learn and easy to play. There’s also an element of reciprocity: By drawing something for the other user, that person now feels obligated to respond with a guess and a drawing of their own. This mechanism once again creates variable rewards: It’s fun to see if your friend guessed correctly, and interesting to observe their drawing skills.
This type of retention also applies to task tracking apps such as Jira or Asana. Something is sent or assigned to you, and you’re expected to do it.
The gnawing knowledge that a coworker is waiting for you is hard to bear for most people, and you’ll feel obligated to make progress. You will for sure return to Asana to press that “Mark Complete” button when the task is done. A similar feeling of obligation arises in Facebook and LinkedIn’s “Network” Screen:
All these folks are waiting for me to respond to their friend request, and I surely shouldn’t let them wait any longer. Once I’ve accepted, they’ll get a notification that I’m now in their network, and it will be their turn to come back to LinkedIn.
3. Scheduled Shows
Provide a regular, real-time show at pre-set time intervals. Notify users when the show is about to start, and let them know at the end of the show when the next one will happen.
For an emerging set of niche products, the retention mechanism is to have regular programming at pre-set time intervals. This applies to YouTube and Twitch live shows, but I think the most prominent implementer of this mechanism is HQ:
HQ is a live trivia show, moderated by a real person. If you join the show at one of several pre-set times per day, you can participate in the trivia game. The players that make it through 10 rounds of successive gameplay split a prize that can range into the thousands of dollars.
After each show, HQ lets users know when the next one is, and will notify them just before it starts. Setting clear expectations about when they should come back is key.
Since the shows only happen at predetermined times, there’s a perceived scarcity which makes playing HQ seem more valuable. Because the show is moderated live, unexpected things can happen, which once again gives users the dopamine hit of variable rewards.
4. Status or Badges
The product rewards the user by upgrading their status or granting badges. Obtaining higher status can unlock additional features.
Granting your users some level of status, or rewarding behavior with badges is another way to motivate them to come back to your product. Here are three examples from Nike Run Club, a running tracker app, Duolingo, language learning app, and the Local Guides program in Google Maps.
These are once again variable rewards: For any action that you perform, there’s a slight chance you’ll get a reward.
In the best case, you’ll encourage good habits. Learning a new language is useful, as is becoming more fit. Don’t use this for evil: Video games often use this sort of reward structure to feed your addiction to the game.
5. Surprise & Delight
Upon completion of certain actions, users are rewarded with a pretty or funny clip or image which celebrates their work.
Instead of giving people permanently visible badges, you could also give them a delightful reward when they are using your product. This could just be a beautiful animation as you complete things. For example, Help Scout is a product that provides tools for customer support representatives. Upon completing all their tickets, the product shows them different artwork every time for having achieved Inbox Zero:
In order to make this work, the reward needs to be variable. It can’t just be the same reward over and over again, because then it gets boring.
6. Memberships / Subscription
Offer a membership subscription that provides clear time or money savings if repeatedly used. Users will keep returning for the savings you provide, and the sunk cost of having paid for the membership.
This one is a bit of a standout: All of the above examples are features that can be provided for free to the user. But if your user is willing to commit to paying a monthly or annual fee for your service, they are more likely to return. The most prominent example here is Amazon Prime:
One Amazon has upsold you to the $119/year subscription, you’re going to want to get your money’s worth by ordering things with 2-day delivery from Amazon. Your go-to behavior will become to order from Amazon, which increases Amazon’s annual revenue from you, even though their shipping cost is increased.
While you’re on Amazon to order stuff to come to your house, they can also drive you into watching Amazon Video or sell you an Echo device. Shopping is a recurring use case — people need to buy stuff all the time — and by selling you on Prime, Amazon creates a recurring pattern that keeps bringing you back to the site.
7. Personalized Notifications
Provide relevant notifications to users based on what you know about them. Good targeting differentiates this from spam. This type of notification can work best for marketplace products.
There are different types of notifications, some of them annoying. This section is about the ones which do not make users roll their eyes when they receive one. They are well received when they are targeted and personalized.
One genre of product for which this works well is for marketplace products like Upwork, Redfin, UrbanSitter, Indeed, Caviar, or Thumbtack. Both demand and supply side users have specific needs, and maybe there are timing or availability constraints that make matching so complicated that your search is essentially always running in the background. As a result, when new matches appear on the market and the user is genuinely interested in getting this information. For example, Redfin is good at this when notifying me about houses that have recently come online that I might be looking at in my house search (I wish):
If you want to use this retention mechanism without sliding into the spam category, ask yourself for every email whether it is relevant to the user. This should be done in consideration of whether he or she understands that your product does, and based on your understanding of the user’s needs.
8. Share Improvements
Inform users about new features they may be able to benefit from. This is a high-cost strategy because you’ll have to keep building new features.
In the early days of your startup, your product may be far from complete, and you’re excited to tell users about the new features as you roll them out. That’s where this mechanism comes in — you send users an email telling them about new features or improvements to your service. Here’s an example from Upwork:
This works exceptionally well if the user needs what you are thinking of offering, and may reconsider using your product again even if he or she had previously stopped using it.
Yet in some sense, this is by far the most expensive retention mechanism: It requires you to actually add to your product, which requires expensive engineering time. This one is easily overdone, as you might add features that are not needed, and end up cluttering your product. If you feel the urge to add features just to retain users, consider drip marketing instead.
9. Drip Marketing
Send new users a pre-scheduled set of emails or notifications informing them about the features of your product or promotions going on.
These days, when you buy a new consumer electronics product, you’ll often get emails over the following weeks, teaching you about its features. Below are two examples from Google Assistant and Box.
Drip marketing has two defining characteristics:
- The timing of the messages follow a predetermined course and are automated;
- The messages are dripped in a series, applicable to the logic of how the user should get the information.
Drip marketing informs your user about the product they just bought or signed up for, and encourages them to keep using it. Yet, it’s obvious to users that the emails are automated, and may feel a bit like you are sending them the user manual in chunks, so be careful as this can easily border on ‘spammy’.
10. Incentives
Provide a discount or store credit which users can use if they return to your product. Works best for e-commerce products, but beware that it may cheapen your brand.
This mechanism works primarily for e-commerce products and is all about getting customers back to your site through the encouragement of savings. The savings are usually time-limited. Here’s one from Banana Republic:
I’m sure your inbox is full of these emails. This method works really well for e-commerce products in high-markup spaces — that’s where you have space in your margin for discounts. It works especially when your user has been flirting with the idea of buying something from your site, but didn’t want to commit quite yet. Yet the big drawback here is that you can cheapen your brand: I can’t remember the last time I bought something at full price from the Gap or Shutterfly since I feel like I can always just wait for the next coupon.
11. Spam
Repeatedly send irrelevant or desperate emails to customers in hopes of reactivating them. Sometimes works in the short run, but problematic in the long run.
Spam is when you send users a message that you want them to read without them needing to do so. One dead giveaway is when the subject line of the email includes words “misses you”:
Companies with infrequent use cases are prime examples of these players that overload people with email in an attempt to stay top of mind or manufacture demand.
The reason Icebreaker sends you messages this often is because even though it’s very unlikely, you may actually be in the mood to buy high-tech wool outdoor wear at the moment. Buying outdoor wear is an infrequent use case, which makes those e-commerce players particularly desperate to get into your inbox. For now, a truce has been achieved through Gmail’s “Promotions” tab which nicely tucks them away — which is also the reason why this spam most often won’t work: Out of sight, out of mind.
In Closing
It’s really important to your startup’s outcome that your product retain well. If your users stay longer, their lifetime value will be higher, they are more likely to recommend it to others, and your business will thrive.
The best, cheapest and most organic way to capture users is via genuine recommendations. Work out how you can incorporate variable rewards that bring so much joy to your users that they want to share your product with the world. If not applicable, then at the very least come up with some engaging communication strategies that don’t make them resent your brand, or a cool promotion that keeps them coming back for more.
