Hack Your User Retention Through This 4-Step Optimization Framework

Published in

SaaS Growth Strategies

7 min readMay 4, 2016

This article is part of our Growth Hacker’s Guide to Retention Optimization. Download your free copy.

Now that we’ve established that the best way to look at retention is to report it according to how many users have finished onboarding, it’s time to get to work and start optimizing it.

Here at InnerTrends we believe that breaking things down into smaller parts gives us a much easier way to tackle the challenges we face.

This is the step-by-step framework we use to fix issues related to user retention. We’ll show you how to make use of this framework by running through the most common retention scenarios.

Step #1: Check how many users are returning

First things first: Check your analytics and see how many users are currently returning to the app.

You will find yourself looking at one of the following graphs:

1. Take Off Retention Curve

This is how the graph looks for apps where people love to come back (except Facebook. We’ll get to that graph in a moment.)

You’ll lose some in the first week, maybe they found a competitor’s product that they decided to try. You’ll lose some more in the second and third weeks as some people who didn’t really need your app drop off but it stabilizes after that.

Great growth can come from this retention curve.

2. Cliff Falling Retention Curve

If you happen to come across this situation, you might notice that only a small amount of users are returning during the first week, but those that do will stick around for a long time.

Could this be related to habit formation? Are you selling an aspirin or a vitamin?

“Aspirin solves an Existing Pain.
If you have a headache, you will go swiftly to your nearest pharmacy and buy some Aspirin. You won’t discuss it for long, you won’t haggle on price (not that you can anyway in a pharmacy, but you get the point).

You have a pain, it impacts you, and you want to get rid of it as soon as possible.

Vaccine prevents a Potential Pain.
Now, while you’re at the pharmacy, the pharmacist might want to sell you a Vaccine. Using FUD (fear, uncertainty and doubt), he will try to convince you that you need to buy the vaccine now, so as to avoid getting sick this winter.

You are not sick right now, but you MIGHT be in the future, and the vaccine is the solution to prevent this Potential Pain.

Vitamin provides a Potential Gain.
This pushy pharmacist might also try to sell you some Vitamins. While you feel good right now, the pharmacist tells you that with vitamins, you will potentially feel better.

A better, stronger you. Obviously he can’t guarantee it; you have to trust him.“ — Nicolas Deville (via LinkedIn), Managing Director at Maestrano

How often are you making users experience the core value of your product?

3. Highway to Zero Retention Curve

In this scenario, the retention rate is really high during the first couple of weeks. The sad part: it’s slowly but surely going down.

4. 99 problems but retention ain’t one

If you happen to come across this scenario where your retention rate is constantly really high, it could be because of any one of three things:

Your tracking is bugged. (Take a deep breath, check your tracking code, make sure everything is reported properly.)
You work at Facebook. (Good job! Ask Mark for a raise.)
You own the next unicorn. (Congratulations. Profit!)

5. Drop it like it’s hot

If your product’s retention resembles what you see in the report above, it might be that there’s something fishy going on within the product.

It looks like you are able to convince your users to finish the onboarding, but once they get to experience the product they leave, never to return again.

Make sure you break it down step by step and see exactly what makes your users act this way. I’m sorry to have to be the one to break it to you but this is about as bad as it gets.

Neither of the following options are an easy fix since they require radical changes and iterations to your product:

The problem you’re already trying to fix isn’t an actual problem (see aspirin vs. vitamin)
Your product fixes the problem, but not the way people expect it

After you check your analytics and find out how many users are coming back, it’s time to move on to Step #2 and find out exactly why those users are returning.

Step #2: Learn why users are returning

Identifying the type of user that is coming back to your app on a consistent basis won’t be enough to help you reduce churn. You also need to find out what makes them come back.

Figuring out what makes them return is the secret ingredient you’re going to use to optimize retention

Reach out to your customers

A good way to find out what makes user return is to get your customers on the phone. It doesn’t matter how big you are, they will appreciate it and you will learn critical information about what makes them love your product.

Make sure every interaction and mention is addressed. Whether it’s Facebook, Twitter, or email, leave no stone unturned when it comes to interacting with your customers.

“One of the easiest things that you can do to improve your customer retention is adopt a policy in your company that no customer engagement is ignored.” — Justin Butlion (via YotPo), Director of Business Performance

Providing customer support can actually help you set yourself apart from the other apps in your marketplace. Customers will appreciate your willingness to go that extra mile in order to solve their issue.

Customer Feedback

The second best approach is to send out surveys with open-ended questions. They will help you gather data from a large amount of users.

The survey’s purpose is to help you find out which feature of your product the customers find most valuable.

Go ahead and ask your customers about their experience with your product.

You will either end up with a piece that can be used as a testimonial, or with some honest feedback which will help you identify pain points which you can fix.

This in turn will ultimately improve retention for other customers as well.

Experiment with freebies

The third way would be to offer free stuff to your users and see what piques their interest.

People normally use free stuff because it’s helpful. Otherwise they will just install it because it’s free, but never re-use it.

Since you’re not really sure what it takes to make them get back to the app, experimenting with freebies can help you identify new retention drivers.

The idea behind freebies is to see what features or benefits people would be interested in using.

After you learn what works, you can put a price on it and add it to a bundle for your new users.

These are only a few ways to learn why your users love the app. Once you find out what influences their behavior, it’s time to move on to the next step.

Step #3: Find out why the users who aren’t returning missed the thing that kept the other users returning

The next step is to see why a specific feature is making a difference for only some of the users instead of all of them.

Is the feature not relevant for them? Maybe they’re not perceiving it the same way? Or were they not able to discover it?

The answer to these questions will define the strategy that will help you increase retention. It’s very likely that you will discover an issue related to the audience of your product, or the UX.

The actions you’re going to implement in order to optimize retention will be completely different depending on the issues you discover.

Having learned from your happy customers what makes your app awesome, the next step is to find out why the users who churned weren’t able to go through the same path.

Step #4: Develop and implement the features and actions needed to reduce the amount of users churned at step #3

Once you’ve identified exactly what’s missing and what steered the churned users the wrong way, go ahead and implement the features and actions needed to help them get back on track.

The problem with retention is that it takes a bit of time to measure the impact of any actions on it, but if you discovered the problem and fixed it, the impact will be easy to spot.

Now that you’ve identified what makes your users forget about your app, and you’ve implemented the features needed to help them return to it, it’s time to learn how you can make them stick around for the long run!