How to Keep a Customer for Life: The Three Stages of User Activation & Retention

The average app loses 77% of its daily active users within three days of installation. Think about that: most digital products can’t hold onto even a quarter of their initial customer base for less than a week.

The old rules of reliable growth no longer apply. Your product needs to grab a new user's attention and keep them captivated long after they've left your site. Online consumers today don't expect to end relationships with digital vendors after the initial sale. Instead, customers expect the initial value exchange to lead to additional, compounded value down the road. This sense of optionality means a consumer's expectations are constantly shifting alongside their usage behaviors.

So what tactics can your team use to convince customers of your product’s lasting value during that all-important first impression?

retention_average

Source: Quettra

Activating new users, or guiding them to the point where they find value in a product and decide to provide value to the business in return, can help you avoid the fate of the average app by fueling growth through scalable and sustainable business solutions. Not too long ago, we outlined how companies that focus on customer retention will have an easier job of acquiring new customers. The reverse can also be true: emphasizing and streamlining new user activation can lead to a quicker Eureka moment for the user, simultaneously introducing them to your product and convincing them to stay a while longer.

Your activation and retention practices should complement each other without either one cannibalizing the other. A cohesive user engagement strategy doesn’t overemphasize one section or another; rather, it makes the divisions between engagement stages nearly invisible.

activation-funnel

In the user interaction lifecycle, activation takes place between acquisition and retention. By the time a new user is poised to be activated, they’ve already been made aware of your product and are deciding whether or not to become a recurring user. You can tip the scales in your favor by reinforcing the three stages of successful user activation:

1. Allow users to make progress within the first 30 seconds of onboarding.

Onboarding is the user’s first hands-on impression of your product. Depending on the type of engagement play you’ve adopted, onboarding can refer to any number of methods. Let’s look at an example.

Content aggregation site Reddit allows users to create free profiles and subscribe to “subreddits” that correlate with special interests and hobbies. Immediately after providing an email address and choosing their username and password, users are prompted to scroll through popular subreddits that they may be interested in.

Reddit

This onboarding practice gives users the opportunity to invest early in their profiles and gives Reddit an chance to showcase the breadth of content available on their site. Before even finishing their profiles, new users have been given a peek of what Reddit can provide them, stoking curiosity and acclimating them to the site’s intuitive structure.

2. Guide users to their Eureka moment.

This is when a user “clicks” with your product, connecting the dots between a problem they’ve been having and the solution that your product provides. Adhering to your engagement loop can go a long way towards pushing users towards their Eureka moment. As yourself:

  • Did you clearly and concisely guide users towards your product’s value through onboarding?
  • How do you know when users have reached a Eureka moment?
  • Do you need to adjust your North star metric, or does your product not organically lead users to repeated use?

For the gold standard of Eureka moments, look no further than Facebook. Instead of placing undue emphasis on marketing or bloating the product with unnecessary functions, Facebook banked their initial success on having users organically create connections between themselves. Onboarding was developed with a singular focus in mind: get new users to add 7 friends within 10 days of creating their profile. This straightforward goal allowed Facebook’s team to build around their product’s core value, reframing their priorities and consolidating their developmental efforts. Eureka!

3. Make the first value exchange count.

After a user understands that your product can offer them a unique set of benefits and connects those benefits to ways that their own lives can be improved, the only thing left to do is give users the chance to reciprocate that value.

Don’t forget: users will be more interested in a value exchange if the value provided to them is emphasized during the exchange, a sort of natural extension of the onboarding practices.

harrys-razor

Harry’s is a subscription service that ships shaving materials to members on a regular, user-defined schedule. Notice here how the standard price, $13, is crossed out and replaced with the discounted price of $8. Free shipping, a unique benefit when purchasing this “Starter Set,” is also highlighted above the total price. If the user was on the fence between a Eureka moment and bored dismissal, the emphasized value shown here might be just the thing to help them make the leap from trial user to paid subscriber.

Don’t Forget to Remember Activation.

It’s not enough to gain a user’s attention; you need to hold their interest by using onboarding to frame their understanding of your product, lead them to Eureka moments by clarifying your product’s value, and enforcing that value by showcasing your product’s benefits during the first value exchange.

To hold onto your customers and convert them to regular users, you need to develop strategies that prioritize activation and acquisition in equal measure. An improved activation rate can yield huge dividends and infuse your product’s lifecycle with reliable and sustainable growth. But don’t overlook the fragility of this new boon; you’ll only see these dividends after repeated, in-depth growth measurements following each new improvement rollout.

Any product can draw a crowd; only those developed with user activation in mind will keep them engaged.