So, let\u2019s 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. <\/p>\n\n\n\n
What is user retention?<\/h2>\n\n\n\n
It\u2019s useful to know what user retention means before we start looking at how you can improve it. <\/p>\n\n\n\n
In short, user retention refers to how frequently your customers keep coming back. It\u2019s 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. <\/p>\n\n\n\n
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. <\/p>\n\n\n\n
There are 3 key phases which you have to successfully navigate through when it comes to developing retained users:<\/p>\n\n\n\n
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- Onboarding <\/strong>refers to when first-time users visit you and sign up for your services<\/li>\n\n\n\n
- Activation <\/strong>is the moment when your users realize the benefit of your product, and they make a concerted effort to use it more<\/li>\n\n\n\n
- Habitual use <\/strong>is the final stage, after which point your customers become retained users; this stage involves building a habit out of using your product<\/li>\n<\/ol>\n\n\n\n
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Source<\/a><\/p>\n\n\n\n
It\u2019s 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. <\/p>\n\n\n\n
How to measure user retention<\/h2>\n\n\n\n
Unlike some elements of business, user behavior is a tangible, calculable thing, which is why it\u2019s important to keep an eye on your retention metrics and consistently measure how well you\u2019re doing. <\/p>\n\n\n\n
Here are several useful ways you can measure your user retention rates – or a lack thereof! <\/p>\n\n\n\n
Bounce rate <\/h3>\n\n\n\n
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<\/a> to keep in mind. <\/p>\n\n\n\n
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. <\/p>\n\n\n\n
Single-page sessions<\/strong><\/p>\n\n\n\n
___________________ X 100 = Bounce rate<\/strong><\/p>\n\n\n\n
Overall visitors<\/strong><\/p>\n\n\n\n
But what do we mean by \u2018single-page sessions\u2019? Well, this refers to if the user:<\/p>\n\n\n\n
- \n
- Hits the back button and leaves your website after only visiting one page<\/li>\n\n\n\n
- Clicks the URL or a link to another website<\/li>\n\n\n\n
- Closes the tab\/window<\/li>\n\n\n\n
- Clicks on your page then does nothing, so the server times out due to inactivity<\/li>\n<\/ul>\n\n\n\n
SaaS (software as a service) tools such as Google Analytics can help you identify your bounce rate and keep on top of it. <\/p>\n\n\n\n
Track retention over time<\/h3>\n\n\n\n
Whilst your bounce rate can be high, it\u2019s 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. <\/p>\n\n\n\n
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. <\/p>\n\n\n\n
For example, if you start a month with 100 users and end it with 280, you have had a net increase of 180 customers. <\/p>\n\n\n\n
Alternatively, you can turn this into a percentage by dividing your end number of customers by those at the start. <\/p>\n\n\n\n
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\u2019ve had a percentage growth of 200%, meaning you\u2019ve doubled your active users <\/p>\n\n\n\n
Or, if you\u2019re a bit more of a pessimist, you can calculate your churn rate instead. <\/p>\n\n\n\n
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Source<\/a><\/p>\n\n\n\n
This will tell you more or less the same information but in a slightly more alarming way. <\/p>\n\n\n\n
Qualitative data<\/h3>\n\n\n\n
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. <\/p>\n\n\n\n
Always keep your eye on customer satisfaction levels. You can do this through: <\/p>\n\n\n\n
- \n
- Pop-up notifications on your app which request customer feedback, e.g. \u201cHow are we doing?\u201d or \u201cLeave a review!\u201d<\/li>\n\n\n\n
- Sentiment analysis from online review sites<\/li>\n\n\n\n
- Net promoter score (NPS) – how likely are your customers to refer you to others?<\/li>\n\n\n\n
- Exit questionnaires which help get to the bottom of why someone stops using your product\/service<\/li>\n<\/ul>\n\n\n\n
Encouraging user retention<\/h2>\n\n\n\n
So, now that we\u2019ve looked at what user retention is and how to measure it, let\u2019s get into what you need to do to encourage the best retention possible. <\/p>\n\n\n\n
1. Perfect your onboarding experience<\/h3>\n\n\n\n
The first step is often the hardest, but it also has the opportunity to be the most rewarding. <\/p>\n\n\n\n
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. <\/p>\n\n\n\n
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:<\/p>\n\n\n\n
- \n
- Tutorials and walkthroughs <\/li>\n\n\n\n
- An FAQ section<\/li>\n\n\n\n
- Customizable content<\/li>\n\n\n\n
- Details about potential in-app purchases or other pricing levels<\/li>\n<\/ul>\n\n\n\n
It shouldn\u2019t 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\u2019re there to help them. <\/p>\n\n\n\n
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\u2019t include tiny little buttons which are impossible to click on. <\/p>\n\n\n\n
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\u2019 experience. <\/p>\n\n\n\n
2. Experiment with different content types <\/h3>\n\n\n\n
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\u2019t do it correctly. <\/p>\n\n\n\n
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Source<\/a><\/p>\n\n\n\n
To break up the monotony and improve your users\u2019 experience, try experimenting with different content styles and new features. Here are a few suggestions to get you started:<\/p>\n\n\n\n
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- Interactive content: <\/strong>Engaging content can mean many things. But one way to keep your users entertained is to have them actually interact with what you\u2019re 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. <\/li>\n\n\n\n
- Video content: <\/strong>Adding video content to your website can be a superpower. Did you know that viewers retain 95% of a message<\/a> when it\u2019s presented in video format rather than only 10% when it\u2019s text? And one great way to easily add videos into your content is with Walkable<\/a>. If you\u2019re 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. <\/li>\n\n\n\n
- User-generated content: <\/strong>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<\/strong><\/a>, i.e. the user is not affiliated with you and is providing an honest opinion on a product or service, or promotional<\/strong>, i.e. you have contacted a user to offer a brand deal\/discount\/reward in exchange for a (positive) review of your business. <\/li>\n\n\n\n
- Images and infographics: <\/strong>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.<\/li>\n\n\n\n
- Keep innovating: <\/strong>By cycling through content mediums, you\u2019re keeping your users\u2019 feeds fresh. Introducing new features is a great way to retain customers, which means they won\u2019t 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. <\/li>\n<\/ul>\n\n\n\n
3. Have open channels of communication <\/h3>\n\n\n\n
It\u2019s all well and good having a service where your users can just crack on for themselves, but there will always be times when they\u2019ll 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\u2019s vital that you have a strong customer support team with clear, open lines of communication. <\/p>\n\n\n\n
It\u2019s 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\u2019s more chatty or more formal. <\/p>\n\n\n\n
To develop strong customer loyalty and encourage repeat purchases of a good or service, you need to be proactive in your engagement. It\u2019s rare, if not impossible, to find a business that survives by being aloof and mysterious with its clientele. It\u2019s the personal interactions between companies and their customers that lay the foundations of a strong retention strategy.<\/p>\n\n\n\n
A great way to get started with encouraging brand-user interactions is through social media. Over 93% of businesses<\/a> have one or more social media platforms which they use to promote goods, keep in contact with customers, or network with other brands. <\/p>\n\n\n\n
Similarly, the majority of new discoveries about a brand (and subsequent customer acquisition) are conducted over social media, as shown in the chart below:<\/p>\n\n\n\n
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Source<\/a><\/p>\n\n\n\n
But it doesn\u2019t stop there.<\/p>\n\n\n\n
Once you\u2019ve got your new users, you need to make sure they don\u2019t 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. <\/p>\n\n\n\n
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Source<\/a><\/p>\n\n\n\n
Or you could contact them through a mailings list<\/a> and include email-only rewards such as:<\/p>\n\n\n\n
- Video content: <\/strong>Adding video content to your website can be a superpower. Did you know that viewers retain 95% of a message<\/a> when it\u2019s presented in video format rather than only 10% when it\u2019s text? And one great way to easily add videos into your content is with Walkable<\/a>. If you\u2019re 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. <\/li>\n\n\n\n
- Interactive content: <\/strong>Engaging content can mean many things. But one way to keep your users entertained is to have them actually interact with what you\u2019re 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. <\/li>\n\n\n\n
- Activation <\/strong>is the moment when your users realize the benefit of your product, and they make a concerted effort to use it more<\/li>\n\n\n\n