Hey! You there!
Did that get your attention? We hope so.
The first step to upping your user retention is to make sure they’re engaged right from the get-go. Makes sense, right?
Unfortunately, when the average amount of time a person spends on a web page is only 54 seconds, you’ve got a lot of work to do in not very much time at all. But, if you’re successful, you’ll see this number increase over time and have a steady stream of users coming back for more.
So, let’s take a look at 5 excellent tips for increasing your customer retention rate and how to build a business that people will love to come back to over and over again.
What is user retention?
It’s useful to know what user retention means before we start looking at how you can improve it.
In short, user retention refers to how frequently your customers keep coming back. It’s the opposite of churn rate, which looks at the volume of your user turnover over a given time period. A high churn rate means bad things for business.
You want to make sure your existing customers stay interested and engaged whilst still bringing in new users. After all, you want to continuously grow your user base, not just replace them with new people.
There are 3 key phases which you have to successfully navigate through when it comes to developing retained users:
- Onboarding refers to when first-time users visit you and sign up for your services
- Activation is the moment when your users realize the benefit of your product, and they make a concerted effort to use it more
- Habitual use is the final stage, after which point your customers become retained users; this stage involves building a habit out of using your product
It’s a mutual process whereby you have to help guide your new customers through this pipeline until they become returning, loyal customers. In turn, they help you by providing feedback, investing in your services and recommending you to others, both online and through word-of-mouth. Loyal users will have a higher customer lifetime value (CLV), which looks at how much money you earn from an individual over a given time frame.
How to measure user retention
Unlike some elements of business, user behavior is a tangible, calculable thing, which is why it’s important to keep an eye on your retention metrics and consistently measure how well you’re doing.
Here are several useful ways you can measure your user retention rates – or a lack thereof!
Your bounce rate shows you the percentage of visitors to your site who click away after viewing just one page. You want your bounce rate to be as low as possible – preferably below 30%, but 40% is a good threshold to keep in mind.
To calculate this percentage, you need to divide the total of single-page sessions by the total of overall visitors and multiply this figure by 100.
___________________ X 100 = Bounce rate
But what do we mean by ‘single-page sessions’? Well, this refers to if the user:
- Hits the back button and leaves your website after only visiting one page
- Clicks the URL or a link to another website
- Closes the tab/window
- Clicks on your page then does nothing, so the server times out due to inactivity
SaaS (software as a service) tools such as Google Analytics can help you identify your bounce rate and keep on top of it.
Track retention over time
Whilst your bounce rate can be high, it’s only useful for first impressions. If you want to look into the longevity of your user retention, then you need to track it over a set period of time, such as yearly quarters or month-to-month.
To do so, you need to look at your total customer base and subtract the number of customers at the start of your time period from the amount at the end of it. This will show you a net movement of users, whether that be positive or negative.
For example, if you start a month with 100 users and end it with 280, you have had a net increase of 180 customers.
Alternatively, you can turn this into a percentage by dividing your end number of customers by those at the start.
To change things up, if you end with 240 users, divide this by your start number, which could be 120, and multiply by 100. Voila, you’ve had a percentage growth of 200%, meaning you’ve doubled your active users
Or, if you’re a bit more of a pessimist, you can calculate your churn rate instead.
This will tell you more or less the same information but in a slightly more alarming way.
If you want some forewarning of potential user drop-off, then you should definitely take the time to look at what your users are saying about you.
Always keep your eye on customer satisfaction levels. You can do this through:
- Pop-up notifications on your app which request customer feedback, e.g. “How are we doing?” or “Leave a review!”
- Sentiment analysis from online review sites
- Net promoter score (NPS) – how likely are your customers to refer you to others?
- Exit questionnaires which help get to the bottom of why someone stops using your product/service
Encouraging user retention
So, now that we’ve looked at what user retention is and how to measure it, let’s get into what you need to do to encourage the best retention possible.
1. Perfect your onboarding experience
The first step is often the hardest, but it also has the opportunity to be the most rewarding.
Your onboarding experience will give your customers their first impressions of your product outside of whatever advertising or preliminary research they may have done. This is your moment to drive home your values and make your new users feel welcomed and appreciated.
The onboarding process should be simple, intuitive, and user-friendly. To avoid customer churn, you need to ensure that they have everything they need in order to be successful, including:
- Tutorials and walkthroughs
- An FAQ section
- Customizable content
- Details about potential in-app purchases or other pricing levels
It shouldn’t be a struggle for information, so make sure to label where everything is filed clearly. There are few things more annoying than having to search through obscure sections of an app or a website to find what you need. A search bar or quick-links area is a great way to show your customers you’re there to help them.
You should also extend these considerations to the design of your products and services; your UI (user interface) needs to be something that people can get to grips with immediately. Don’t include tiny little buttons which are impossible to click on.
Even if your target audience is tech-savvy 20-year-olds, no one wants to struggle to understand weird symbols, navigate an awkward welcome page, or fight around a corner of a screen for a back or close button. Keeping a streamlined flow of information is sure to improve your customers’ experience.
2. Experiment with different content types
Whilst using the same styles of content over and over again can be comforting and dependable, it can also be quite boring if you don’t do it correctly.
To break up the monotony and improve your users’ experience, try experimenting with different content styles and new features. Here are a few suggestions to get you started:
- Interactive content: Engaging content can mean many things. But one way to keep your users entertained is to have them actually interact with what you’re putting out. Gamification is a great way to add something new to your services; you can add quizzes, point systems, and challenges to ensure your users keep coming back for more.
- Video content: Adding video content to your website can be a superpower. Did you know that viewers retain 95% of a message when it’s presented in video format rather than only 10% when it’s text? And one great way to easily add videos into your content is with Walkable. If you’re struggling to get your point across with just words, you can now easily embed quality videos to help guide your users to the right places and help them see what you want them to the most.
- User-generated content: Why do all of the hard work yourself when you have a user base ready and available to help out? User-generated content can travel like wildfire on social media and can really help to boost your brand awareness and user acquisition. This content can either be non-promotional, i.e. the user is not affiliated with you and is providing an honest opinion on a product or service, or promotional, i.e. you have contacted a user to offer a brand deal/discount/reward in exchange for a (positive) review of your business.
- Images and infographics: A picture paints a thousand words, but you can get even more meaning across when you combine the two. Rather than explaining everything in intricate detail in a paragraph, why not include it in a diagram or infographic? This will be a lot more eye-catching and easier to digest.
- Keep innovating: By cycling through content mediums, you’re keeping your users’ feeds fresh. Introducing new features is a great way to retain customers, which means they won’t get bored. Trial runs and tests are a valid, viable way to get feedback, and A/B testing goes a long way when it comes to understanding what features are favored best.
3. Have open channels of communication
It’s all well and good having a service where your users can just crack on for themselves, but there will always be times when they’ll need extra support. Perhaps something breaks, they lose their login, or they just want to know when a new feature can be expected. In these times, it’s vital that you have a strong customer support team with clear, open lines of communication.
It’s possible to use AI to help manage your customers’ queries in the form of chatbots which can provide 24/7 support until a human can come along to take over. NLP (natural language processing) AI can almost flawlessly imitate a human support staff member, and you can tailor your approach depending on the tone of your brand, whether that’s more chatty or more formal.
To develop strong customer loyalty and encourage repeat purchases of a good or service, you need to be proactive in your engagement. It’s rare, if not impossible, to find a business that survives by being aloof and mysterious with its clientele. It’s the personal interactions between companies and their customers that lay the foundations of a strong retention strategy.
A great way to get started with encouraging brand-user interactions is through social media. Over 93% of businesses have one or more social media platforms which they use to promote goods, keep in contact with customers, or network with other brands.
Similarly, the majority of new discoveries about a brand (and subsequent customer acquisition) are conducted over social media, as shown in the chart below:
But it doesn’t stop there.
Once you’ve got your new users, you need to make sure they don’t lose interest in your services. Push notifications and gentle reminders are a great way to increase user retention. Just look at Duolingo. Many, many memes have been made about the not-so-subtle prompts the app gives to encourage people to keep learning a new language.
Or you could contact them through a mailings list and include email-only rewards such as:
- The latest deals, discounts, and special offers
- Informative newsletters
- Early access to new features
This also provides a great way to get in contact with users who may have been absent for a while or who may have left something unfinished the last time they used your site.
4. Be applicable on all devices
If your service has been designed specifically for one device, then this segment probably won’t be of much use. But if you’ve developed a product which should, in theory, have multi-device functionality, then it’s vital you make sure all your bases are covered.
Services which began their lives as a website page and grew from there may be more difficult to navigate on smaller devices like phones. In this case, it’s important to design a mobile app which fits perfectly with its desktop counterpart.
A major reason why many services see their number of users decline is convenience. This is true for both physical, in-person interactions and virtual, e-commerce transactions.
If you have services which are designed to work alongside other products, such as SEO tools like Semrush, make sure you are up to date with the most popular integrations. Is your product applicable with Outlook, Microsoft Office, or Google? If not, perhaps a competitor’s services are.
5. Make coming back rewarding
Even if your service is perfect in every way possible, the cherry on top is to implement additional incentives to keep your users coming back. One of these methods is through a referral program, whereby an existing user can earn a reward for how many new people they successfully encourage to sign up.
You see this a lot in financial institutions – “Earn $100 with every friend you refer” – or on e-commerce sites, usually offering Amazon vouchers.
Affiliate marketers partner with brands to earn a commission for each new user they introduce or each product they manage to sell via a unique affiliate link. You can reach out to influencers to encourage this kind of interaction or keep it more central to your initial product by only offering these opportunities to current users.
After all, whether someone brings in 2 new people or 50, the total number of users increases regardless, and everybody wins.
You’re ready to go!
And so, armed with a wealth of knowledge, you’re ready to head out into the online world and make sure you never see a net loss in users again.
Of course, there will always be rocky patches in your service’s lifecycle – that’s just the nature of business. There’s a plethora of external factors that could tank your sales at any moment, so it’s important to safeguard yourself from potential damage and increase your chances for great user retention.
Make sure to stay on top of your metrics and always measure how things are going. If, unfortunately, things do start to look like they’re trailing off, you need as much warning as possible to get ahead of the curve.
So try out some of these strategies and let us know how you got on!