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.