When you think about managing a brand, a lot of emphasis is probably placed on user acquisition. And it should be. But acquisition can only get you so far. With two-thirds of consumers being willing to switch brands if a competitor offers a better experience, it’s harder than ever to keep your customers on your side. What has become important is ensuring you’re able to keep the users you have, allowing you to efficiently grow your base. But how do you know if you’re doing a good job of this? The answer: user retention.
What Is User Retention?
While user acquisition focuses on the number of new users being brought in, user retention concentrates on how many of these users continue to use your product within a set time period. It can be determined based on the usage of your product as a whole or, if you’d like to break things down, you can calculate it based only on the usage of specific features. The important thing to keep in mind during this process is defining what exactly qualifies as a use. Is it simply logging in? Performing a certain action? The choice is yours.
Phases of User Retention
The user retention process is typically thought of as having three distinct phases, each one with its own set of obstacles. These phases are known as:
Onboarding: Before a user can technically be your user, they must first sign up for your product. This process should have a quick, easy-to-follow flow to encourage them to complete the process.
Activation: Immediately after onboarding, users should be able to easily see value in the product. The first things they come into contact with on the platform should underline these benefits and walk them through how to best utilize them.
Habitual Use: Finally, these benefits need to lead to the user repeatedly returning to your product. Once a user has reached this phase, they likely feel as if they need your product and are more likely to continue to return over and over in the future.
What is a “Good” User Retention Rate?
The rubric for a successful user retention rate changes depending on the type of product, as well as its age and goals. However, the average rate after 30 days is around 5.6%. Even this number, however, does not necessarily denote success. For example, products that need to scale will need higher retention rates than those that are simply trying out new features. So, while 5.6% may be great for some, a product in the middle of scaling might find it to be not enough.
Why Does User Retention Matter?
User retention is one of the most important Key Performance Indicators (KPIs) for a company to measure. While overall sales or signups can spike or falter, user retention will stay consistent, no matter the number of users. And onboarding large numbers of users with a low retention rate leaves almost no room for success. This is due to the very high cost of acquiring a new user, which often takes years before that user is able to help the product turn a profit. With low retention rates, a product can never survive the high cost of adoption. On the other hand, a 10% increase in user retention can boost the value of a product by over 30%.
Part of what makes user retention so valuable is its ability to provide insight into what is and is not working within the product. Looking at these analytics on a micro and macro level can be especially helpful, including studying how and when users of different genders, ages, regions, etc. interact with your product. This often time leads to a moment of enlightenment that allows companies to significantly shift their product into something even more successful.
Prizeout: A Solution for User Retention
Okay, so you know what user retention is and why it’s important… but how does Prizeout fit into the equation? Well, in a world where withdrawals have become more and more of a hassle for both businesses and customers, Prizeout has streamlined the experience for both sides. Our withdrawals are easy and immediate, meaning your customers will be happy to not have to wait several business days just to get their money. Perhaps more importantly, they can increase the value of their withdrawal by shopping with their favorite national and local brands. For example, a brand offering a 20% bonus would instantly turn a $50 withdrawal into $60.
We know what you’re thinking. These bonuses must be hard to find, right? Wrong. 95% of our brands offer bonuses, making it incredibly easy for customers to increase their purchasing power. Additionally, our proprietary algorithm ensures consumers are only seeing the brands they love and don’t have to sift through our 1,000+ merchants to find their favorite brands. We’re constantly running new promotions, adding new features, and introducing new brands to our marketplace to ensure there’s always something to catch the eyes of our customers.
Step Up Your Retention Game
All of this combined has proven time and time again to increase user retention for our partners by offering their users an incredibly easy and valuable withdrawal experience that can’t be beat. If that’s not enough of an incentive, it costs you absolutely nothing to integrate with us. In fact, the opposite. We offer our partners a revenue share of all sales their customers make in our marketplace. Visit our Partner page to learn more about our many benefits and schedule a meeting with a member of our team to learn just how much we can bring to the table.