How to skyrocket user retention rates in only 4 steps

Before the COVID-19 pandemic halted his streak, Jeff Reitz visited Disneyland for a record 2,995 days. He didn’t continue to come back for the rides or the shows—he just liked to be there because he could “focus on having fun.” This is why people come back to Disney parks time and time again: because Disney knows what people want and then works to meet or exceed those expectations.

SaaS companies could learn a lot from Disney parks. If you want to retain your users, you need to give people what they want and expect, not what you think they need. Too often, the user retention issue is framed as, “What more can we give our users to convince them to stay?” Product managers need to ask, “What do users expect, and how do we blow those expectations out of the water?”

Customers don’t choose you because you’re the only option in town. They stick with you because you’re consistently meeting their needs and providing them with a great experience. And if you don't, nearly 50% of users will see if someone else can. When it comes to user retention and increasing LTV, it's time to shift the focus from hacks to an incredible user experience—your users and user retention rate will thank you.

Step 1: Understand your users' needs and expectations

Every product team thinks they know their user base—especially if they “are their own audience.” But you can't make important judgment calls based on a tiny sample size of who you think your users are. Be diligent about getting to know your actual users so you can make decisions based on what they need and want, not what you think they do.

Here are a couple of ways you can make that happen:

• Communicate with your sales team: Sales reps do an awesome job getting to know new customers. They find out things like the size of their customer’s business, internal procedures, even how much the CEO likes Nicaraguan coffee. Most importantly, they know why users decide to go with your product— in other words, they understand user expectations. If you want to keep your users happy, you can’t lose this valuable insight during the handoff from user acquisition to user retention. Help close the gap with rigorous documentation processes so important information about your users doesn’t get lost in the shuffle.
• Practice full-team support: Interacting with the customers isn't just good for your users—it's good for every person at your company. The more people in different roles who get face-time with real users, the more they'll adopt a user-centric mentality. Product planning, dev rooms, and even team meetings will include conversations about improving the user experience, which will lead to a fuller understanding of what your users need and expect from your product.
• Send surveys: A few carefully timed surveys are integral to getting to know your users. But surveys can come across as self-serving, so you have to be extra careful in how you position yours and when you send it. To start, consider sending a brief NPS survey to your long-term users to see what they love about your product. Also, make sure to nail the timing by emailing them the survey after they’ve hit a key milestone.

Once you know more about your users, you can start the next part of user retention optimization—meeting your users’ expectations (and making sure they know it)!

Step 2: Guide users to meeting their own expectations

During your marketing campaign, you make promises and set expectations about what problems your product will solve and how useful it will be in the long term. Once a prospect becomes an active user, it's time to prove to them your promises are more than words and turn those expectations into reality.

While it might seem like all you have to do is create a great product, there’s actually a lot more for you to do. You have to point users to the value and consistently reinforce and add value throughout their lifecycle. Here's how.

• Nail the first-time onboarding experience: User onboarding is the easiest and most effective way to fix a user retention problem. Great onboarding flows show new users how to use your product to meet their expectations on the first day of use. If some users have different expectations of your product, personalize your onboarding process so each user gets the experience they need to see the value your product can bring to their lives.
• Keep messaging consistent and valuable: To guide your users toward the value you promised, you need to communicate with them. Be consistent and provide value with your messaging. Many companies start strong with a welcome email and onboarding in their first week. But then, they drop outreach until they want to advertise something. Keep your channels of communication open by sending weekly or monthly insights. You also always want to deliver value. One irrelevant email earns you a spot in the spam folder. One annoying push notification loses you the privilege of getting immediate customer attention. Use lifecycle emails to give users valuable information for an excellent user experience.
• Overcome feature blindness: Feature blindness is a modern phenomenon where users are so accustomed to a constant flow of visual stimuli they naturally ignore anything that isn't a core part of the product. This feels like a stab in the heart to the dev team that's spent a long period of time developing a product or feature for those very users. To overcome feature blindness, recommend new features in the context where they're most necessary. That way, you're addressing a need as it comes up instead of when a user is focused on using other, more familiar features.

Instead of sending an email suggesting the user reactivate Sidekick, HubSpot does this for users after periods of long inactivity, using a tooltip to reintroduce the feature. This way, users see how the feature would affect them in routine use.

Step 3: Use data to optimize UX

Now that you’ve got the basics down, it’s time to optimize your user’s journey to aha! Do this by taking a deep dive into user behavior. Learn what behaviors separate the lifers from those who churn and what features are getting the most attention from long-time users. From there, you can work backward, making laser-focused improvements in product, feature adoption, and onboarding to decrease churn rates.

• Find the sticky stuff: Use built-in analytics or an integrated analytics platform to find out what features your users are spending the most time using. Then ask yourself what makes these features sticky? Is it because of accessibility or functionality? If most users are taking advantage of your scheduling feature because it's the first thing they see, try positioning a core feature in a more visible spot. Is a relatively hidden feature getting a lot of attention? Then nudge more users towards it so it can make a bigger splash. Many tools, such as Amplitude, measure stickiness for you. That way, you can focus on making retention-boosting adjustments rather than gathering accurate data.
• Use segmented messaging: For most products, there is no catch-all solution to improving onboarding and feature adoption rates—nor does there need to be. Use a personalized approach for each of your different buyer personas. Clearbit managed this by segmenting its users based on their job titles. Using their own API, they used Customer.io to send different onboarding emails to marketers, sales reps, and developers. If email isn’t your game, then try in-app messaging instead— all of the segmented personalization with far less work to make it happen. Using Appcues in-app announcements, Privy was able to double the results of their email outreach campaign and save 39 hours of work a week.
• Look at heatmaps to find friction: Heatmaps show you users' clicking and browsing habits. You learn where users are looking and where they're getting tripped up. Use a tool like Crazy Egg or Hotjar to get started so you really understand what users do with your product. Armed with this information, you can A/B test UX and UI changes to nudge users down the path you want them to go and increase user engagement overall.

Use these tips to optimize your UX and UI to make it easier for people to use your product and get value from it in a reasonable time frame. The quicker people see the value of your product, the more you can win over the users who make snap judgments and don't stick it out if they don't see results on day one. As well, it'll keep your users happy (and staying longer).

Step 4: Go beyond retention metrics and KPIs

If you've kept your promises and created an engaging and intuitive UX, it's time to surpass anything your users ever could've expected from your product. By doing this, you'll get people to not only like your product but to love it. But, going from like to love is not easy. You need to invest time and energy to wow them and grow that dedicated core of your user base who'll never want to leave.

• Make users feel special: When you offer promotions to inactive users or offer an upgrade to users right before they unsubscribe to your mobile app, users quickly see this for the ill-disguised retention strategy it is. Don't wait until they're on the brink of churning to throw some last-ditch attempts at them. Instead, surprise your users with “just because” upgrades or with beta-testing privileges. By doing so, you'll trigger  surprise reciprocity that will compel users to want to stick around.
• Have the best support team: No one likes to email a support question, chat with a bot over social media, or bounce back and forth between various reps who have no idea how to help them. If your reps can provide an experience that isn't just helpful but memorable, your users won't even think about churning.
• Celebrate your users’ successes: Users have much better things to think about than products and apps. So they're rarely thinking about whether the product has been up to snuff. On the one hand, that might mean they're happy enough to stick around. Alternatively, they might one day question whether they actually need your product. Reinforce your app's value by celebrating your user's progress. When people accomplish something, make sure to pat them on the back for it through emails, slideouts, or in-product modals.

People can tell when you’ve gone above and beyond for them. It’s hard to measure the result of a Grade A user experience, but it's an effect that'll build and impact your business positively as it grows. Taking that next step and making people feel special will, in turn, help those people view your product as something special. When this happens, you create a situation where customer referrals, high retention rates, and overall customer success are the norm.  

Retaining one user is worth more than you think

Love is infectious. If you can inspire a core group of users to love your product, these people become brand champions who can inspire others to give your product a try and come to love it too. You can learn more about this route to sustainable growth in our guide to the product-led growth flywheel.