Retention is King | Hacker News Reader

Retention is King

andrewchen.co

96 pointsjamiequint38 comments

My favorite thing about retention is the leverage it gives you. My favorite analogy is the "leaky bucket": You have bucket with holes in it. It's not holding water. You can pour water in as fast as you can and you might be able to get growth... But as soon as you stop, the bucket begins to leak out.

Or you can plug holes. Make users happier. Work on re-activation. Give value.

If you work on top-of-the-funnel stuff (more water) FIRST and then try to solve retention second, there's a lot of waste. You've leaked users. You've created a group of folks who don't talk enthusiastically about your product.

If you work on retention first, all subsequent marketing efforts are more powerful. Word of mouth is more powerful.

The caveat is that you do need to work on top-of-the-funnel up to a certain point or else you won't have any users to retain or you won't be able to measure the results of your retention efforts.

Yup, need to pour enough water to find out all those leaks.

It needs balance. I've worked on products where ~90% of marketing resource is on retention vs. acquisition and they were getting outgrown by poorer products. And if you focus too much on what customers want to can limit opening your product to where the new users will come from. Or simply, customers never hear of your great product. With mass market products people often use whats put in front of them.

My experience (as a marketer) is companies tend to swing hard towards one philosophy. I'm yet to work with a company that treats each equally allocating resource between them on ROI vs. a general prefered philosophy.

Love the way as you read the article you see this big modal slide down in front of your face and you have to figure out how to get rid of it. There is a tasteful way to do this and this is not one of them. Retention fail.

Hey, not sure what modal you're talking about (afaik I don't have one anywhere) can you specify?

Here is what popped up as I was scrolling through the post (zoomed) on my phone:

http://i.imgur.com/gSUNzUU.png

Here's what it looks like zoomed out:

http://i.imgur.com/mTPE6uH.png

Didn't really bother me as much as the parent though.

Oh weird, I'll let Andrew know that it would probably be best to turn that off on mobile. Thanks.

No, just turn it off, period. If I want to subscribe I'll find the link. If I'm marginal, the modal will make sure I never come back.

That is simply wrong, the modal will increase email acquisition which will increase retention every time. The HN crowd always hates this but its true.

It may be true in the normal people market segment that it will increase sign-ups, but it's absolutely not true for me.

Admittedly I'm not normal, but it might be considering the market at which the site is aimed, and the type of people you're trying to get signed up. I have significant disposable income, and actively look for ways of trading that money for either time or knowledge. Having that modal pretty much guarantees I won't be back.

So ask, it might increase number of emails in your list, but will it increase your income?

It's a wonderful way to get people to leave your site immediately. It showed up before I was even a paragraph into the article. First off, I have no idea if I even care to get updates from you guys at that point, because I haven't read anything yet. Secondly, I ended up not reading anything, because as soon as it pops up, I left, as I'm sure the majority of other readers did as well.

I only came to the comments to make sure someone pointed out how awful that dialog is.

It's a wonderful way to get people to leave your site immediately

So true. As soon as I saw it I backed out, and it leaves a really bad impression. Let me reveal something important: I just want to read the post. That's it. Simple, right? You'd think bloggers would be able to figure this out.

So is someone loudly hawking their wares to everyone on the street. However, Louis Vuitton's hands off approach gets much higher LTV from its clientele.

I'd be willing to bet a lot of money that I could monetize LV's website much better than its currently monetized today (FWIW I doubt that is the goal of their website) with techniques not too dissimilar from something like this.

For everyone downvoting Jamie, there are so many bloggers who have released their data on interstitials. In many cases, the trade-off is worth it: annoy a small percentage of users, but enjoy higher overall conversion rates.

I agree that there could be better ways to serve the popup (time-delay, wait until 2nd article viewed, etc) but if your argument is simply "turn it off because I dont like it, and it will never work" -- go look it up. One such example:

http://danzarrella.com/my-data-shows-email-popups-work-and-d...

My modal is powered by SumoMe, so I emailed those guys to let them to know to fix it for mobile.

I didn't even wait for the modal to load. I closed the tab as soon as the background dimmed.

Looks like the modal library that showed up a few days ago. You move your mouse out of the page and it loads. Happened to me as well but unable to recreate the issue.

I really wish bloggers would stop doing this. It's bad design and a pain in the ass in terms of user-friendliness.

I'm starting to question the value of the strive towards increased retention, at least for the industry I work in. My employer is a rather successful webshop and as anyone else in the same business we hire in loads of third parties to help increase visibility, conversion and retention.

An article, which I sadly can't find again, had a quote from a customer that really made me think about this. The article was regarding not requiring users to signup before buying a product and the quote was something like "I'm not look for relationship with your site, I just want to buy something". For us, the customers that have a "relationship" with us is the first bunch of people I would drop, given the chance. They are the ones taxing customer service the most, they have the most complicate wished and while they might be your ambassadors, they will also stab you in the back.

For companies that ships actual goods, retention is not worth wasting money on. It's better to try to reduce your prices and cost. Be extremely visible on search engines and price comparison site and treat every customer as a new customer. If someone shopped with you before and had a positive experience they might choose you over a similar prices competitor, but price is king. Well... Price and deliverability.

As for online services retention makes sense of cause.

The article you're looking for is here: https://www.uie.com/articles/three_hund_million_button/

It's very sad that such a large amount of users don't have the attention span to deal with a simple register/login field.

I already have probably hundreds of registrations on sites I cannot be certain about the security of.

I would like to reduce that number.

They could just use google login

I said reduce. Why would I want a Google login tracking me about the place?

"For companies that ships actual goods, retention is not worth wasting money on. It's better to try to reduce your prices and cost."

I'd reword that as "For companies that sell commodity or third party items". And that is because all the value adds I have seen are low.

If I want a pair of Nike shoes then I'm not going to buy a different brand of shoes unless they are way cheaper or better. Your webshop OTOH is just a middleman.

What about Zappos? Great customer service and a delightful experience is supposedly what got them to where they are.

This sounds like a fancy way of saying focus on the product first. All the tricks in the world can only last so long if the product isn't a winner. On the flip side, if you have (and can maintain) the best product then it's only a matter of time until the world figures it out (except in a few winner-take-all-markets like online auctions).

EDIT: PG has also nailed this concept, with his "well" analogy in http://www.paulgraham.com/startupideas.html.

Tom Tunguz wrote my favorite article on churn. If you're interested in the subject of retention, read this and get where he's coming from with the numbers. He's a quant guru!

http://tomtunguz.com/churn-fallacies/

This is an excellent post. Have definitely learned some of these lessons the hard way recently. This line particularly resonated with me:

"If you have high retention and no virality you will sustainably grow your user-base over time. If you have high virality and no retention you will not."

"Do not focus on improving virality unless your overall retention is stable, not continuing decrease after some reasonable period of time."

We definitely could have used this a few months ago

You can still make a lot of money off high virality and no retention. You just have to recognize it for what it is: a cash grab rather than a sustainable business.

My thoughts exactly as I read the article. Some purposefully push retention to the side, looking to make the money big and fast rather than sustainable customer group.

> Do not focus on improving virality unless your overall retention is stable

The same logic applies to monetization as well - there's (usually) no sense trying to improve your monetization if your retention sucks.

I look at retention in a similar way (for an online university). As for the growth model related here, I would suggest using a traditional survival analysis instead, which is conceptually simpler and accounts for whether or not some users are still active (right censoring). There are also many packages ('survival' in R, for example) which have the algorithms programmed (both simple Kaplan-Meier and multivariate Cox PH) and decent visualizations.

There's a sweet irony here in that it's a guest post by somebody who hyperlinks to their website with google analytics tracking (likely for lead gen) but discusses why retention is more important than acquiring users. Oh and it's posted by the guest author.

Not that there's anything wrong with that or that the article itself is bunk in any way - just that it's ironic.

As a customer, I've always felt that companies that have a lot of advertising (eg, certain insurance and banking companies), are wasting their current customers' money. Just stop to think how much a TV ad costs, then think about why the company you have your mutual fund with has to charge so much for "management and overhead". Car insurance premiums went up? But the little lizard on TV said they were the cheapest!

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