3 steps to increase user retention & reduce churn for your SaaS

May 8, 2023

What is retention? A % of users who continue using your product & come back between a specific time period. There are 3 steps to do retention right.

Step 1: Observe & study retention. There are 3 ways:

Weekly/monthly retention cohort curves: Assuming a cohort of users have signed up in Jan, the curve shows what % of users stayed active in Feb, March, April etc.

Interval time series: Plots how a particular interval's retention % is changing. Week 1 historical retention is x% and has now changed to y%

Triangle chart: Shows you (a) the retention % of each cohort of users on the X-axis and (b) the retention % across each week/month on the Y axis.

Step 2: Segment your users.

Segment your users by :

(a) actionable user characteristics: Eg: Segment by acquisition channel, user type, company, use case etc. You'll be able to study which segment is doing better or worse.

(b) product action: Observe if there an action or set of actions that correlates with more retention

Step 3: Experiment & Monitor.

Audit your product with a user journey mindset - acquisition, onboarding, activation, engagement.

UX copy tweaks, UX design changes, funnel optimization can have big impacts.

Make hypothesis, Prioritize based on impact & decide to eliminate it or test it. Define success metrics clearly ahead of building.

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