What is product retention?
What exactly does “product retention” mean? Product retention is an extremely critical measure to evaluate to check the overall health of your company. When you calculate your company’s retention rate, you will obtain the percentage of customers who have maintained their use of your product or service over a specified amount of time.
It is possible to interpret retention as a measure of customer loyalty, as well as a reliable indicator of the caliber of your customer relationship, whether it be with a new or an existing customer.
Developing an excellent plan for customer retention is the greatest method to handle the problem of how to enhance client retention, which is a major concern for many different types of businesses. Being excellent at acquiring new customers is only relevant if you can also successfully reduce the number of consumers you lose over time and maintain the ones you already have.
A low client retention rate may be a key indicator that something is wrong with your product, such as the fact that the price of the product is too expensive for the value it provides. If you have a high customer retention rate, it indicates that your present customers value your product, which in turn leads to a sustainable stream of revenue because they continue to use the product.
What are the three phases of product retention?
How many stages are there in the product retention process? Product retention may be broken down into three stages, depending on where the user is in their user journey: early stage, mid-stage, and long-term retention.
The minute a customer registers for your service marks the beginning of the early stage of retention.
You should strive to transport users to the activation point most expediently and effectively feasible. At this point in the process, your objective should be to convince people to use your product on multiple occasions so they can experience the value it offers.
Offer individualized onboarding processes, encourage user participation through contextualized in-app assistance, and familiarize users with the essential functions of your app.
At this point in the process, your goal is to turn utilizing your product into a routine. To accomplish this goal, you must ensure that the product provides customers with such a high level of fulfillment that they feel no need to be reminded to use it again because they have already ingrained the practice of using the product into their daily lives.
To keep consumers hooked and then put in place development strategies, businesses need to have a solid understanding of the psychology behind the building of habits. Only then can they hope to improve the percentage of initially retained customers who go on to become regular users.
At this level, the focus is on boosting MRR and LTV through account expansion strategies to drive more revenue. Customers will find more value in relevant upgrades, and as a result, they will remain with your organization for longer.
Experimenting constantly and looking for ways to improve both your product and the customer experience are two of the most important things you can do to drive long-term retention. Instances of this include the ongoing collection of customer feedback, the investigation of the customer journey to locate pain areas, and the creation of new products.
Why is product retention important?
Why is it necessary to maintain product retention? Product growth cannot occur without strong retention. It enhances a variety of indicators that are necessary for the operation of every business.
- An increase in LTV: The only way for your company to turn a profit is if the lifetime value of its customers is greater than its customer acquisition expenditures. This can be accomplished with the help of retention. If you want to produce a profit and recover the money you spent on acquiring clients, you need to keep as many of those customers as possible and charge them more money over time.
- Possibilities for expanding client accounts: If a current customer finds value in your product, they are more inclined to purchase a more expensive version of it. As a result, the implementation of your strategy to retain customers will inevitably result in account growth.
- Increased customer loyalty and advocacy: Once you’ve kept a customer, you have a tremendous edge in selling to the people they know since they will recommend your business to their friends and family. To put it another way, the user can promote your software by demonstrating its usefulness to their network of friends and coworkers.
- Revenue growth: At the end of the day, the management wants to see an increase in the net revenue that has been accumulated over the period. All of the perks that were discussed earlier can contribute to an increase in your overall revenue.
How to improve product retention?
How to improve product retention? Tracking the metrics surrounding retention is the first step toward improving retention, which can be a bit of a challenge in and of itself. There is a wide variety of strategies that can be utilized to boost retention; however, some of these strategies will be more pertinent to your business than others. You may create your client base out of more devoted customers by implementing the following customer retention methods.
Refine your onboarding process
A poor onboarding procedure for new customers is the single most effective way to swiftly lose one of these customers. It is difficult to keep consumers if they are never fully onboarded and never find value in the product that you offer. Because of this, enhancing the user experience during the onboarding process can be the single most effective approach to increase user retention.
In most cases, a positive onboarding experience will lead to a positive customer experience that efficiently meets the requirements specified by the customer. You might wish to take a look at some metrics, such as those listed below, to get an idea of how your onboarding procedure functions in its current state:
- How many people start the onboarding process but do not follow through to completion?
- Where do the vast majority of people give up on the onboarding process?
- At what stage of the onboarding process do users have the highest likelihood of completing the process in its entirety?
The onboarding process can be fatal to product retention if it is overly complicated and takes an excessively long time. Your user onboarding will have a more positive impact if you can reduce the amount of time it takes for users to find value. It’s possible that improving the onboarding experience is the key to really raising retention, which may be accomplished through improving the whole customer experience.
Encourage interaction with customers utilizing feedback questionnaires
Excellent clients that take pleasure in using your product can provide insightful answers to queries regarding why they continue to do so. Customers who have returned your product to you can also provide valuable feedback and information. Receiving feedback from consumers in the form of a customer survey for both categories of customers can help uncover insights into the reasons users are remaining or departing, which is the essential component of the equation for retention.
You can learn how happy consumers have established their brand loyalty by using a customer survey to build up qualitative customer data. This can help you figure out how to keep those customers satisfied.
It is crucial to ask consumers who are remaining with the product questions about what they like the best about the product, information about what demographics they are a member of, and what aspects of the product could potentially cause them to leave the product (this could be questions around features, reliability, or even price).
Once you’ve determined what keeps consumers coming back and found certain trends, you can put in a further effort to try to disseminate these positive sentiments to new clients in addition to those who already use your service.
Finding out why former users are leaving the platform is of greater importance, especially if product retention rates are already poor for your business. You might ask these former customers why they stopped patronizing your business and what it would take to convince them to come back in a quick survey.
This should provide you with insight into problems as well as potential solutions, putting you on the correct track to improve the product and ideally boost retention. After the product has been updated, you may want to consider contacting these former users again to let them know that their comments have been taken into consideration and that you would welcome the opportunity for them to test out the new and enhanced version of the product.
Customer feedback surveys can be an extremely effective approach to collecting succinct feedback on some of your most significant customer experience and retention challenges. They can also likely help you identify issues that you were previously unaware of that are affecting customer satisfaction.
Don’t stop marketing once a customer is acquired
Many businesses cease their marketing efforts as soon as they have a customer who has subscribed, been onboarded, and begun using their product. This may make sense when considered logically, but when put into reality, it couldn’t be further from the truth. You should always strive to keep your users engaged so that your product and services are at the forefront of their minds.
This might include product release notes, newsletters, and other fantastic material that keeps people interested and helps them find new value within your product. It is a terrific approach to get customers to return to the product and discover new ways to unlock value with it if you continue to sell it and stay in contact with existing customers. This should be a foundational component of practically every product retention strategy that is put into practice by firms.
One important precaution to take before implementing this strategy is to ensure that you are making effective use of intelligent automation to maintain and expand your consumer base. It is essential to send customized emails to users that contain content that is pertinent to their needs to walk the fine line between providing value and becoming annoying.
Using events from within your application to drive specific emails can be a great way to accomplish this. For example, when a user uses a feature for the first time, you can send them an email with an overview of the feature as well as a link to the documentation so that they can delve deeper into the topic if they so choose.
This might serve as a method for continuing to promote to existing clients while also ensuring that you deliver excellent automated customer service. You should also make sure that the volume of emails that are being sent is not excessive for the users, as this could result in them blocking or unsubscribing you from their email lists.
Allow Lunar Sky Games to assist you in developing an effective product retention plan because keeping a loyal customer is the most effective approach to creating revenue and raising the customer’s lifetime value.
We are a team of gaming product consultants here at Lunar Sky Games, and we have more than 10 years of experience working in the business. We collaborate closely with web3 firms to assist in the development and expansion of their product lines. Your ideas will become a reality with our assistance. Get in touch with us right away to schedule a consultation.