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Esther Humphrey / September 12

Startup growth: How to boost app user retention and nurture loyal users

An overhyped launch can be dangerous – especially if your product fails to deliver on its brand promise. Whether we’re talking about the doomed Vine social network or a Samsung Galaxy Note 7 exploding in the overhead bin, the road to startup success is littered with good ideas that quickly went off the rails.

I understand the desire to pop some corks and celebrate your brand-new app or digital product. A splashy, viral launch can be a welcome distraction (and ego boost) after months or years of decidedly unglamorous work. But massive growth right out of the gate is irrelevant if you can’t make payroll in 3-4 months. So, what really matters?

It’s all about retention.

Many founders think that if there’s no hype, their app doesn’t stand a chance. That’s not true. Organic, steady growth is a good thing. If, however, you’re investing money to build virality before you’ve nailed user retention, you might as well set that cash on fire.

Let’s do some math.

- Say you spend $50,000 on marketing that drives 50,000 people into your app. If you have a 30% retention rate (which is decent by today’s standards), only 15,000 of those users will stick around.

- If you can drive that retention rate up to 40, 50 or 60%, you’re going to keep 20-30,000 users.

- Even if you spent just $25,000 to drive 25,000 people into your app, a 60% retention rate would leave you with the same 15,000 users as in the first scenario – at half the cost.

Sounds good, but how do I increase retention?

Great question. The answer, of course, is different for every product. Before we talk tactics, it’s important to understand your own engagement metrics. What is a retained user? What behaviors indicate that someone is retained?

A social media app might consider someone “retained” if they open the app daily and post at least once a week, for example. A functional product like an expense-tracking tool might expect users to open the app every time they make a purchase. Set your metrics and put the analytics in place to measure behaviors.

If engagement begins to fall off and the numbers trend downward, a simple notification might do the trick. A fashion blogging app could send a notice like, “We miss you! Come back and see the hottest Fall 2017 street styles.” If the user had a positive experience, this simple note could be enough to prompt re-engagement.

A more personalized message might be even more effective. The fashion blogging app might send a note about Japanese designers, for example, if the user selected that interest during onboarding, or if her browsing history features Rei Kawakubo and Yohji Yamamoto.

Facebook has turned these come-on-back notifications into a science. The first time I received an email about my grade school classmate’s new profile photo, I thought, “I don’t care.” But, the next email included a partial caption. I logged in and took a look. The notification worked, because it played on my curiosity – and probably a little FOMO.

Map out your habit loop

At Appster, we try to build a compelling habit loop into every client product. This is the cycle that brings users back, again and again, to take desired actions inside your app. Every loop has three distinct steps:

Trigger

The ephemeral “thing” (idea, emotion, content) that makes someone think about your app and reach to use it. When users are falling away, notifications like Facebook’s “X just posted a new photo” are designed to trigger logins.

Reward

The payoff users get from taking the desired action. Seeing a new Instagram comment on your sunset photo or viewing the photo in that Facebook trigger email is the reward. Digital rewards increase brain activity associated with pleasure. Rewards can be tactical, like uploading a receipt or checking a task off a to-do list, but the real benefits are always emotional, such as feeling organized, in control, accomplished, calm, or confident.

Routine

When people establish consistent, repeated behaviors with your app, that’s a habit. Routine engagement is the holy grail of user retention. It keeps the habit loop cycling indefinitely and builds invaluable loyalty.

The habit loop in action

Users are far more likely to cycle through the habit loop if they “invest” in your app, whether that means uploading content, sending a message, or completing a purchase. The right investment will be different for every product; the goal is to figure out which behavior(s) inspire people to feel committed.

Posting a photo is the top Instagram investment. Why? Because if you post a photo, chances are you’ll want to come back and see who liked your image. When friends comment, you’ll probably reply. Maybe a conversation will unfold or someone will tag you on their sunset photo. All those good vibes (the reward) will encourage you to post again tomorrow – and the loop continues.

Crossing a threshold can also establish a habit. Once I’ve uploaded 10 receipts to the expense app, for example, I’m unlikely to delete the product and switch to something new. My information is in there. I’m invested. I feel confident about getting my financial life in order. Just don’t do anything to make me angry and we should have a long, happy digital relationship.

Core desired emotions and reaching the “aha moment”

You built an app because you had an idea, which was probably linked to some strong emotions. You were passionate about making life simpler, or more fun, or more organized. Maybe you were so frustrated with the status quo that you decided to roll up your sleeves and take action. Or perhaps you had a personal interest, like cooking or running, that led you into product development. Whatever you imagined, there was probably an “aha moment” where you envisioned your product’s potential.

If someone downloads three different expense-tracking apps, the one that gets the user to that aha moment the fastest will almost always be the keeper. Two factors come into play here:

Clear expectations: Do users know exactly what the app will do before they hit the install button? If they abandon the product shortly after download, your marketing and branding has probably failed. You didn’t properly set expectations – or they were sky-high and the product couldn’t deliver.

Simple onboarding: From the moment someone opens your app, it should seamlessly start teaching them how to use the product. A fake receipt upload, for example, could demonstrate how to organize your purchases while you’re getting set up. Speed matters immensely here. A steep, slow learning curve will land your app in the trash faster than just about any other issue.

I experienced the all-important aha moment a couple weeks ago when I downloaded the Overcast app. The product suggested three different podcasts that fit my interests. I listened, enjoyed the content, and promptly downloaded four more. The interface is clean and my content is increasingly personalized. Overcast quickly brought me into that ideal product vision, and now I’m hooked.

On the flip side, an app like Zillow often tests my patience. Sometimes do a little online property hunting, and every time I finish, I’m flooded with notifications. That’s fine if I set up an alert or asked for news about homes in my area. But if you’re overwhelming people with notices they didn’t ask for, you’re setting yourself up for deletion.

Like many things in life, notification etiquette depends on the context. Repeated alerts might be warranted if my banking app detects unusual transactions. Real estate news is not exactly urgent – unless I specifically indicated that I wanted to find a new home in 30 days. Respond to your users and respect their privacy.

But what about all those habit triggers?

Notifications can encourage users to re-engage with an app. The only difference between effective notifications and spammy updates is testing. Set up a split test where you deliver daily notifications for three weeks. Then, compare that schedule with once-a-week notifications. These are just suggestions, of course. Try out different scenarios and track user behavior. See what creates better retention. Remember that you can’t see when someone deletes an app, but you will know if they continue to log in.

Keep in mind that notifications are not one-size-fits-all. Users with different ages, backgrounds and geography might respond in unique ways. Even people with a similar profile might have a different intrusion threshold. Know your audience, then test the limits. Experiment until you find the best scenario. Continue refining, too, because user behavior is never static.

Gathering the feedback that matters

There are so many different ways to listen to your users. Meeting people in person is always preferable. The more face-to-face time you can log with people who actually use your product, the better. Facial expressions, body language, and tone of voice can often help you understand what someone is really thinking, even if they don’t say it outright.

Surveys can be helpful, but people often race through digital forms and don’t take the time to share real insights. Sites like Usertesting.com allow you to watch people using your app and listen to their video feedback. Don’t forget to collect comments from the App Store and Google Play and provide a feedback link or email address inside your app. There are so many ways to gather user responses, so if you’re not hearing from users, something is wrong. Leverage every opportunity to listen and learn.

As for what you’re hearing, I have to admit that I often focus on the negative. Bugs, systemic issues, and critical problems can quickly spread, and for every user that takes the time to rant about the interface, there are at least 100 others who didn’t bother to say anything. They left or deleted the app – or even worse, they told people about their terrible experience with your brand.

If no one’s finding gaping holes or feature meltdowns, watch for patterns. Repeated requests or complaints can show you how to improve. These comments often point out valid issues, versus people with an axe to grind or a user profile that doesn’t match your target. Tangible feedback and opinions can be vastly different animals. Keep your eyes and ears open for concrete suggestions that pop up repeatedly.

Have your launch and retain users, too

In case you think I’m a total killjoy, I can assure you that I’m not. It’s cool to have a buzzy launch party or do some creative, viral marketing. Just be sure to keep your eye on the prize: retention. Your marketing budget will stretch further and your splashy campaign won’t drain precious resources that could be spent on improving the product.

Remember that soft launches were created for a reason. You get to test the waters and make adjustments without doing the app equivalent of a cannonball dive. Most people also love to take part in a beta group. They feel like extended team members and often spread the word without any prompting.

So, forget about building hype. Happy users are loyal users – and that’s the digital sweet spot.

Just ask anyone who bet their chips on Vine.

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