

Retention is King - jamiequint
http://andrewchen.co/2014/06/03/retention-is-king/

======
webwright
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.

~~~
WadeF
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.

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

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electic
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.

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

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

[http://i.imgur.com/gSUNzUU.png](http://i.imgur.com/gSUNzUU.png)

Here's what it looks like zoomed out:

[http://i.imgur.com/mTPE6uH.png](http://i.imgur.com/mTPE6uH.png)

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

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

~~~
ColinWright
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.

~~~
jamiequint
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.

~~~
squeaky-clean
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.

~~~
wyclif
_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.

------
mrweasel
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.

~~~
JMStewy
The article you're looking for is here:
[https://www.uie.com/articles/three_hund_million_button/](https://www.uie.com/articles/three_hund_million_button/)

~~~
jimmaswell
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.

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

I would like to reduce that number.

~~~
jimmaswell
They could just use google login

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

------
johnrob
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](http://www.paulgraham.com/startupideas.html).

------
beat
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/](http://tomtunguz.com/churn-fallacies/)

------
Finbarr
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."

~~~
sbov
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.

~~~
shanghaiseo
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.

------
fragsworth
> 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.

------
twelfthnight
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.

------
niyogi
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.

------
npsimons
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!

