The Definitive Guide to Growth Hacking by Neil Patel & Bronson Taylor

The Definitive Guide to Growth Hacking Download PDF

How to Retain Users

Two chasms have already been crossed. You have successfully gotten visitors to your product through using push, pull, or product methods. You have also successfully activated them by getting them to take certain actions within your product. It might seem like you are out of the woods, but there is one more necessary component, retention. Retention is the act of getting your members to use your product in such a way that it becomes habitual. That's why we call them users at this stage. if you retain them then they are literally using your product often. If you are a SaaS company then this means lowering your churn. If you are an ecommerce site then this means helping people become repeat buyers. If you are a content company then this means getting people to consume your content on a regular basis. You get the point. Many growth hackers actually consider retention the most important aspect of the funnel. There are a number of reasons for this:

  • If your retention is low then all of the ingenious growth hacks that you apply to your product are basically meaningless. Your members will leave your product at the 11th hour (the very end of your funnel). Leaky buckets don’t need more water. They need their holes fixed.
  • By the time someone has become an activated member then they’ve shown themselves to be extremely interested in your product. They are the most qualified people you have to work with. If you don’t focus on retaining them then you are neglecting the most high quality leads that you have.
  • Since all the stages of the funnel work together, sometimes retention can affect the bottom line more easily than getting new visitors. Increasing your retention by 20% is the same as increasing your overall traffic by 20%. A 20% increase in traffic might cost more in time and tangible resources than increasing retention by 20%.
  • An increase in retention increases the lifetime value of the customer (LTV). This opens up the potential to try a number of push methods at the top of the funnel that might not have been possible before. Retention benefits the funnel as a whole more than we sometimes realize.
  • People that have been retained for long periods of time are more likely to evangelize for your product. If your product is built into their weekly routine then they are going to talk to their friends about it, take it into the workplace, and generally be an advocate for you.

Retention, like anything, is a skill set that can be learned. Here are the tactics that we recommend trying as you focus on retention:

Staged Traffic

When you look at the growth hacker funnel it might seem as if you should focus on getting traffic first, then activating members, then retaining users. However, in reality this is not the smartest way to work through the funnel if you want to make the most of your efforts. It’s better if you put some effort into getting traffic, then use those visitors to test the rest of your funnel before you decide to put more of your resources into getting traffic.

Imagine that you have a growth budget of $4,000. Let’s say you spend all of it in a couple weeks. You spend some on the production of a whitepaper for inbound leads (1k), you spend some on Google ads (2k), and some on a contest (1k). You probably feel good about what you’ve done, but what if you realize after a month or so that even though you effectively got traffic that your activation and retention methods were totally broken. You spent your budget and have very little to show for it.

It would be smarter to try a single tactic and use only some of your resources just so that you can track the progress of your traffic through your funnel. Then you can fix the obvious holes that were uncovered using this test traffic. Now when you spend more of your resources on traffic your product will be better optimized to capitalize on it. In essence, you test your funnel, including retention, when the stakes are low, so that when it’s time to accelerate growth you’ve done the requisite work that will allow your product to handle it. Early on, stage your traffic in order to master retention.

Speed to Aha

People come to your product and give you a chance because of the promises you’ve made to them. You’re going to save them X, provide them Y, and make Z much more simple. The moment that a visitor or member actually feels the truth of your promise, and sees the obvious benefit of your product, that’s what we call the “aha moment”. If you want to retain users then part of your task is to get them to the aha moment as quick as humanly possible.

When someone is new to your product then they are open to your promises. They are excited about the possibility that you will deliver on them. If you waste time getting them to the aha moment then they will not stay around. Here are some questions to ask yourself:

  • Do you know what the aha moment for your product is? What are the actions which a member can take on your product which are leading indicators of their retention rate?
  • If it currently takes two days to get someone to the aha moment, can you make it two hours?
  • If you currently ask them to create an account to see the benefit of your product, is there a way to show them a sandboxed version of your product that allows them to have an aha moment before signing up?
  • Are there features which you promote in your product which don’t lead people to an aha moment, thereby cluttering your product and lowering the chances they will ever get to the aha moment?
  • Is there an email you can send to a new user which outlines exactly what the aha moment is? Can you give them a clear call to action to have that kind of moment?

Twitter realized that after you followed a certain number of people that your retention rate would increase drastically. So guess what they did? Yep, now they help you follow people as a part of the signup process. Retention is built into their registration flow because they knew the speed to aha matters.

Don’t Fear Email

Engineers and product purists have a hard understanding email. They actually think email is universally unwanted, and that most of it is borderline spam. This is just patently false. People opt-in to receive emails, and they opt-out when they no longer want them. Let people make their own decisions about the email they want or don’t want, and don’t preemptively decide for them, handicapping your product in the process. Email is a massively useful tactic for retaining users, and those who ignore this are at an instant disadvantage. There are a number of different kinds of emails that your product should send, and they each have their own purpose.

  • Drip Campaigns

    A drip campaign is when you send people prewritten emails at preselected intervals. A new member might get an email on day 1, day 3, day 7, day 14, and day 21. You can use a drip campaign to introduce them to your product, share testimonials, give them case studies or other inspirational reasons to use your product, and many other things. A drip campaign burns your product into people’s minds when they are most impressionable, right after they’ve signed up. Every email sent is a chance to bring them back into your product and retain them. Fools ignore drip campaigns.

  • Event Based Notifications

    Another category of emails are those which are based on specific event triggers. We are all familiar with these because of Facebook. Every time someone does anything which is remotely related to us on their social network then we get an email notifying us about it. Facebook has become very clever with their event based emails, and one of the things they do is force you to click through to their website to get the most out of their emails. They tell me that someone liked a photo I was in, but I have to click a call to action to see the photo. This is smart because once I’m back on their site then I’m sucked into the Facebook world again. What actions are people already taking in your product that could also warrant an email?

  • General Updates

    The third kind of email is a general update. These are emails that update people about new product features, new staff additions, and other kinds of things that wouldn’t make sense in a drip campaign, but aren’t tied to specific events either. People love to see how other people work (it’s a weird obsession, I know), so use these emails to also give people a behind the scenes view of your company. Show them photos of your new workspace. Show them an image of your team next to the company logo. If people feel like they know you then they will be more likely to be retained by you.

Alerts and Notifications

If you are building a mobile app then in addition to email you have another avenue available to get people back into your product. You can also use alerts and notifications to help retain users. Are you currently using push notifications within your mobile app? Are you currently using badges to alert people to new features, or new updates, or anything else? The same hangup that some people have with email also carries over into alerts and notifications. Remember, people can turn off alerts and notifications within their settings. Let people manage their own life, and send them relevant updates.

Exit Interviews

Talking directly to customers can be very difficult. People aren’t afraid to tell you the truth, and the truth can hurt your ego. Well, get over it, because one of the best ways to learn is by dialoguing with your members. Recently, we’ve heard a lot in the startup world about customer development (the process of talking to customers early), but there is another kind of communication with customers that can be very beneficial as well, and that’s an exit interview.

When people cancel your service, or go long periods of time being inactive, or generally show themselves to not be retained, then you have an opportunity to learn from them. I would recommend emailing them and asking them the worst thing about your product that made them cancel (or whatever the appropriate verbiage is for your situation). Just cut to the chase and ask them what sucks the most. Have thick skin. You can use the responses of this exit interview to inform the product roadmap, and thereby increase future retention.

If you want to ask people to fill out a full survey at this point you can try it, but think about the situation first. They’ve already walked away from you. They probably won’t give you 10 more minutes of their time. They might shoot you back a quick response if you send them a short, one sentence email. Be wise about how much you ask for at this point.

An exit interview like this can also be a chance to bring them back into your product. You could offer them an exclusive discount. You could give them the option of choosing a less expensive package that isn’t advertised during signup. You’ve already lost them, so you might as well try something to bring them back.

The Red Carpet

One way to keep people from leaving your product is to roll out the red carpet for your most engaged users. Exit interviews are about getting the most out of a bad situation, but the red carpet is about avoiding a bad situation. Here some ways that you can give the red carpet treatment to your best users:

  • Send 100 shirts to your first 100 customers.
  • Give your best users a shout out in an email newsletter.
  • Keep a Twitter list of your best users and retweet them often.
  • Give your VIP users access to exclusive content.
  • Have a drawing for a free trip to a relevant conference, but only power users can enter.

Every product is different, but the point is to do something periodically that makes your primary users feel appreciated. Not only will this help prevent them from churning, but when someone feels like the center of attention, or unique, or important, then they will definitely share the experience on social networks and other places. Give your best users yet another reason to advertise for you by giving them a treat every once in awhile.

Increase Value

At the heart of any product is the value it provides. This means that keeping one eye on the value of your product is always going to help retention. Just because someone found value in your product on day 1 doesn’t mean they will necessarily find value in it on day 100. You have to always stay ahead of the value curve if you want to retain users. Here are a few generic ways to provide value:

  • Add Features

    If your product is lacking important features then adding them might lead to better retention. If two out of every three people tell you the same thing during the exit interview, and it pertains to something that you don’t currently provide, then it might make sense to just give them what they want. This isn’t about feature creep, it’s about giving people what they actually need to hang around as retained users.

  • Subtract Features

    It may seem odd to now discuss taking away features, but sometimes that’s also the way to increase value. Features that aren’t useful (or aren’t used), only serve one purpose. They keep people from finding out what actually is awesome about your product. People don’t stay around because of the number of features you have. They stay around because you have the right features that provide them value.

Community Building

A product is good, but a movement is better. A startup is good, but a family is better. Are there things you can do to actually make people feel like they are a part of something? This is community building. People who belong to something stay longer than people who subscribe to something. Here are some ways that you can build community around your product:

  • Customer Support

    Great customer support can be the difference in a life long customer and someone who spreads the news of how horrible you are. We may not all be Zappos (let’s be honest here), but we can still up our game to the point that people feel like they belong to a community and they are not bothering us with their support requests.

  • Documentation

    If your product needs documentation then providing it in the best possible way is actually a service to your community. Besides, if people don’t have the needed documentation to install or use your product then you’re not going to retain them.

Make Them Happy

All retention comes down to one thing: happiness. If people are happy they will become habitual users. If people are unhappy then you won’t retain them. Don’t overthink retention. Just make people happy with your product.

Chapter 9 Summary

  • Retention might be the most important aspect of your funnel.
  • We covered 8 tactics to retain users:

    • Staged Traffic
    • Speed to Aha
    • Don’t Fear Email
    • Alerts and Notifications
    • Exit Interviews
    • The Red Carpet
    • Increase Value
    • Community Building
    • Make Them Happy