There’s a lot of hocus pocus around growth out there, a lot of “hacks” and other tricks, but growth is not really all that complicated. It’s about attracting and retaining new users — that’s it.
This presents some challenges, of course. Unlike current users, new users have zero experience with your product, and no relationship yet exists between you. This means, you have to capture their attention quickly, and you have to keep their interest even as it naturally starts to wane.
Creating a loyal customer base from scratch is hard work, but it’s worth it long-term. Getting started is as simple as getting to know who your new users really are.
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New user diagnostic
In order to determine the likelihood of retention from new users, you have to first pursue a high-level understanding of who they are.
One place to start is characteristics like location, demographic details, and how they found you (known as a referral source). Splitting up your users by these kinds of properties isn’t always going to tell you anything meaningful right away, but they can indicate future directions for analysis.
Let’s say we segment out our user base by country and look at a retention curve for the last thirty days. We see here a quite tight distribution of retention rates, indicating that users are being retained at fairly steady rates no matter what country they’re in:
Of course, you could get completely different results just by looking at another set of countries:
Looking at a graph like this, it would be hard to deny something has gone wrong with your Canadian release. Perhaps you've had a localization error or an issue with some other feature — whatever it is, it's worth looking into.
Finding behavioral personas
You have your high-level understanding of your users. Now it's time to group them by the ways they behave within your app. It works like this - you start with a hunch that users who create in-app content within seven days of creating an account tend to stick around longer. To test this theory, you create two buckets:
- New user account/create content
- New user account/don't create content
Then, you look at the retention numbers for both of these two groups in an effort to analyze your hypothesis:
With this method, users who fit into these categories are grouped together and their actions are tracked. We can see that users who create content are retained at a higher rate than users who don't.
Perhaps we could encourage new users to create content early on to boost retention. We don't know for sure whether there's a causal relationship between the two, but it could be a worthy experiment given our results here.
Your onboarding funnel
Onboarding is one of the most important aspects of retention. Get it wrong, and you stand to lose users before you get the chance to astound them with your products and service.
To understand how well your [onboarding funnel works](https://amplitude.zendesk.com/hc/en-us/articles/229951267-Amplitude-2-0-Funnel-Analysis), analyze the flow of required actions. Is it clear to users what sequence of events you want them to follow? Some apps use a status bar to show exactly what's expected of users and where they are within the onboarding process.
This approach clearly lays out each step but to be useful, each one must be measurable. You need to see how many users moved through each step.
Unclear requirements that leave actions up to user interpretation can result in frustration and increase the abandon rate. Use this to figure out what's causing users the most frustration as they make their way through the process.
When you identify the point where they leave, make adjustments to improve the flow. Once changes are rolled out, review the flow again to see if fewer users are dropping off.
It's also important to track what users are doing after they abandon the funnel. Do they leave your app completely or do they do something else like check your list of products? If you find that the majority of users who abandon are still using the app but access different information, perhaps this can be incorporated into your onboarding flow to improve user experience.
From onboarding to value discovery
Just because the standard measurements for retention are based around day three, day seven, day 30, and so on does not mean you need to use these markers.
Instead, you should understand your onboarding process in terms of customer-centric stages:
- When users are first using your product (Day 0)
- When users are discovering its value
- When your users are forming habits
- When users are firmly “current users”
Once you understand the natural rhythm that controls your user journey, you can identify approximately how much time you have to win new users over.
You can also be much more effective in your behavioral analysis because you can identify factors that encourage movement from one stage to another. While Day 3-7-30 provide a nice framework for talking about retention, in practice you will want time markers that are actually meaningful for the people using your product.
Identifying the critical drivers
To have the best chance of retaining new users, you'll have to identify key behaviors that move users towards the habit-forming stage. Figure out what milestones or drivers within the onboarding and value discovery phases lead to continued use of your app.
Once you know what they are, find ways for new users to experience them as early as possible to move them through each phase and promote retention.
For example, if you have a fitness app, you might encourage new users to input their information and tell you their fitness goals during onboarding. If they're able to communicate what they want to get out of your app early on, you can serve up features in your app that cater to those goals.
If they haven't submitted goals after their initial signup, send a push notification reminding them to complete this step. Help them by explaining the benefit you provide—a more personalized and resourceful experience, for instance.
For new users who've submitted their goals, you can send notifications reminding them of the commitment they've made to their health and your commitment to them.
Take action to retain
To retain new users, the key is to get to know them and create an onboarding process that clearly shows the value they get from your product.
By knowing who your new users are, you can tease out the properties of users who move through the funnel. Of the users who move through the onboarding flow, identify what's working for them and what isn't. This is one of the easiest ways to boost retention. Remove their pain points and chances are they'll begin to see the value in what you offer.
Take the time to go through this analysis because it's the best way to improve your retention rates. You can only make improvements if you know what your users need and expect from you.
Start building your retention strategy today
Learning how to manipulate your data to benefit your business is no easy task. Understanding new user retention is just one of the topics covered in Amplitude’s Product Analytics Playbook on Mastering Retention. Download it today to learn much, much more.