Monday, September 25, 2017

How to Hack Retention Rate and Get Customers to Stick Around

Retention, huh?

It’s like interviewing for a job and getting to the last stage of the interviews — just to realize it’s not going to happen.

We spend money on getting people to our website, visitors spend eight seconds on the page and 98% will never return.

Boy, that hurts

It is especially painful for SaaS businesses because of their lengthy sales funnels and high acquisition costs.

Awhile ago we decided to gather data on how to attract visitors, move them down the marketing funnel and make sure they love using our tool.

But before we get into the details, let’s go through what retention rate optimization is and how data can be helpful in improving it.

What is Retention Rate Optimization?

Retention rate optimization is the process of improving the rate of customers returning to use your services.

It sounds like something you should be doing, right?

In numbers it looks like this:

  1. If 100 people land on your site, on average 2-3% percent will “convert” — i.e., do whatever you want them to do.
    1. In our case, it’s 8% of everyone who takes the free trial.
  2. So, if we want eight people to try our free trial we have to get 100 to land on our page.
  3. The retention rates of different industries are hard to predict, but, in our case, we are generally able to keep these eight people for a month. Aftwerward this will happen:
    1. 4 to 5 people will unsubscribe.
    2. But 3 to 4 will try our paid plans, from which only 1 to 2 subscribers will keep paying for more than a month.

This means that only one or two people out of 100 will keep paying to use our services. So naturally, improving this number became a big priority for us.

This is where retention rate optimization comes in, trying to boost your profit on every potential customer who lands on your page.

Now it’s time to explain the path we took.

Behavior Analysis

First of all, you have to try to understand your customer’s behavior:

  1. Why did they leave after trying the free trial?
  2. Why did they leave after trying the paid plans?

The best way to test your assumptions is by simply by talking to your customers via emails, calls, live chats or Skype calls. Anything will do.

One low-key method we tend to use is Hotjar’s Poll. To set it up you simply implement a small code snippet — similar to setting up Google Analytics — and set up the question sequence.

It looks like this: the question is triggered few seconds after you visit a page.

Ask simple, open-ended questions and soon you will have a lot more insight into why your customers do what they do.

Let’s get Ready to Monitor Data

Have you ever heard the statement, ‘Numbers don’t lie’?

Trust numbers more than you trust anyone. Period.

Google Analytics won’t cut it in delivering the insights into customer behavior you need. You will need funnel and event data monitoring software to help to visualize your events.

In this case, Kissmetrics is the perfect tool for this job.

The metrics these kind of tools offer is what one might need to investigate customers’ behavior.

Setting it up is a bit more technical than with Google Analytics because you have to assign tracking to every event you want to monitor. This will take some time if you don’t have developers at your disposal.

What’s great about behaviour analytics’ tools is that they offer easy-to-schedule demo calls, in case there is something you struggle to understand.

Once everything is set, let’s see how we can use this data to improve your retention.

Improving the Onboarding Process

In general, users who have tested different features of your tools can be retained for longer than those people who haven’t tried such tasks.

Designing user onboarding shouldn’t be left to gut feeling. Instead, make sure to tailor it to the features your users find the most useful.

Once you can track events and see the impact your onboarding has on user retention, you can then form a set of assumptions. These assumptions should then be tested to see if iterating your onboarding can improve your retention rate.

Retention rate analysis

We discovered that people who used a key feature of our tool have a retention rate of 20.1%.

This key feature was also the first step of our onboarding.

The second step was to connect our tool to Google Analytics. As it turned out, people who did add Analytics stayed for an average of 12 days, with a retention rate of 7.69%. Compare this to the 1.69% retention rate for people who skipped this step.

We kept exploring the actions people took using our tool. Interestingly, people who used the disavow feature were much more likely to return — this cohort’s retention rate for 12 days was stunning 10.2%.

We had a 24% retention rate increase just by suggesting a few spammy backlinks to disavow.

Once you spot opportunities like this, your assumptions must be tested to see if seemingly useful changes actually deliver the expected outcome.

Imagine the impact if all of your customers would have the same experience as your “star” customers who make the most of your handy features.

From Free Trial to Paid Plan

Once you know the precise likelihood of people sticking around after performing action X, you can assign a value to this activity.

For example, ProdPad gamified their 14-day free trial by giving extra “free days” for each action people performed on the page.

This makes a lot of sense. Any free days you give to your customers are useless if they don’t use them to do things which will make them stick around.

You can even take this one step further. Investigate which actions increase the chance of people switching from free trials to paid plans.

Have a look at the data on activities which improve conversion rates between steps in your funnel. In this case, it’s customers moving from free plans to paid plans.

We discovered that people who linked Google Analytics to our service were 32.5% more likely to use paid plans, compared to those who didn’t link.

This is what we found using the same correlation for the cohort that used our disavow tool:

The disavow tool is seemingly so crucial to our retention rate that it more than doubles the conversion rate from free to paid plans.

Once you start seeing this kind of data, it’s then time to test to approve or disapprove your assumptions.

Improve Your Marketing Funnel

There are different ways to test your assumptions. Here are two:

  1. Involving your software team to adjust your onboarding and gamify your free trial
  2. Using Facebook ads

Obviously, the second option sounds a lot easier, right?

Easier means faster to test and that’s what we like.

After each interaction with a business, we internet users usually get bombarded with upgrade or discount offers. Indeed, it’s a shame not to help your users find their way back to you — and take the action they for some reason avoided.

Setting up Facebook for retargeting ads

Facebook offers amazing retargeting capabilities, allowing you to target any specific action that a specific group of people took.

First, clearly lay out the actions people can take on your site. Once you know the impact these actions have on retention you can make sure people use your tool to its full capability.

What’s more, I will show you how to display ads after almost any event taking place while people use your tool.

First, let’s start by setting up the tracking. We will need to implement two things:

  1. A Facebook pixel — here’s the guide that will walk you through it.
  2. Event tracking — here are the codes to implement for facilitating event tracking.

Creating Audiences

Once that’s done, we need to define the specific cohorts (audiences) which we wish to guide further down the funnel.

Every event that occurs on your site is tracked by Facebook’s pixel and people who fall into specific categories can be shown specific ads.

We know our highest retention rate came from people who had used the disavow tool. Moreover, we know there were quite a few people who didn’t do that.

To start, head over to Facebook’s business manager, (1) then to Ads Manager (2), and finally, click on Audiences (3).

There you will be able to create cohorts or “custom audiences” (1). Next, create a custom audience based on “website traffic”.

Then you will have to define the event. In this case, we want to target people (1) who visited in the last 30 days (2) visited Linkody’s “dashboard” (3). Specifically, the ones who didn’t use (4) the “disavow” tool (6) in this period of time.

Make sure to exclude the other groups of people. There is no need to show ads to people who have already done what you will be asking them to do.

Showing Ads for the Right Audience

Now you can reach out to this cohort.

Show your customers the benefits of performing a particular action. Teach them what this feature can do for their business.

These people have most probably not grasped exactly how useful your tool or service is — the exact reason why others love it so much.

A great way to educate people about this is with video guides or blog posts. Film a walk-through or write a how-to guide describing the benefits of taking this action.

Then head over (1) to the Ads Manager (2) and create an ad of your choosing.

Next, select the ad’s objective: I suggest choosing between traffic (1), engagement (2), or conversions (3).

Then, all you have to do is select the custom audience you created before.


Now all you have to do is check if your retention rates are improving.

This will help you to quickly prove or disprove the assumptions you made before.

Go Ahead and Optimize your Retention

This guide can help you to get the best return out of the money you’ve already put down. So why not go ahead and test it to see if you, too, can boost your profits.

To quickly recap what we went through:

  1. Talk with your customers and ask about their biggest pain points.
  2. Track events on your site and analyze the retention rates to see which activities have the biggest apparent influence in keeping visitors engaged.
  3. Test your assumptions about the events which lead to the highest conversion rate.
  4. Create cohorts in Custom Audiences on Facebook and set up ads to educate people about your product.
  5. After about a month, check to see if there are any improvements in retention rate, analyze this information and see what you can improve.

One thing to note is that this is just one test. In most cases, retention optimization will be an ongoing process.

Happy optimizing and let us know if there is anything you need help with!

About the Author: Helvis Smoteks is an SEO-mastering, content-smithing marketer who spends his days at Linkody helping SEOs monitor their backlink data.

from The Kissmetrics Marketing Blog

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When Slower UX is Better UX

When it comes to technology, faster isn’t always better. 

It’s true that 47 percent of people want web pages to load in two seconds or less (and 40 percent abandon sites that take three seconds to load). But when load times drop significantly below that two-second threshold, users start to get skeptical.

To understand why, put yourself in the shoes of someone checking his credit score. In the past, he may have spent hours on the phone to get even one bureau’s credit report. Now, using an app, he can get all three reports in mere seconds with just a few taps.

Yes, the app is fast, and yes, from an objective perspective, it’s user-friendly. Its designers clearly did their homework. But does he trust the app’s results? Is it a scam? Did the program really gather all three reports, check them for errors, and present them in a matter of seconds?

No way, he might think. Given his past experience, he’d be perfectly reasonable in thinking that the app couldn’t possibly have done it that quickly.

When Slower Software Works

In most cases, a speedy user experience makes sense. Optimization is important, and frankly, most sites need more of it, not less.

But there are certain situations in which a slower UX can actually increase user trust and engagement. Consider slowing your software in order to:

1. Create Security Theater

When you fly, the Transportation Security Administration’s job isn’t just to make you safer; it’s also to make you feel safer. This same labor of illusion is what made you confident when filing your taxes with TurboTax earlier this year. Intuit created fake animated loading bars that show that it triple-checking your returns for errors even though it actually does so along the way.

Slowing down this stressful process tells users that TurboTax is working hard for them and that they can trust it with sensitive information. Facebook provides random security checks for a similar reason: By drawing attention to something that’s already happening behind the scenes, Facebook gives users confidence that their data is secure.

When, exactly, should you provide a security-show slowdown? One might be in order if the user has provided sensitive information (such as a social security number or home address), paid money to use your service, or engaged deeply with it.

For example, imagine a home-finding startup. Rather than you doing the legwork of finding the perfect home, the startup’s app handles it for you. Because it costs money and requires personal information, it’s imperative that it slow the process down. In order to build trust, the app should explain why it needs your sensitive data, how it will use that information, and assure you that it will keep your information safe. A free messaging app, on the other hand, needs no such slowdown. Its goal is merely to gain and keep its users through a seamless experience with the least number of barriers.

2. Educate Users About Modern Tech Speeds

Thanks to Moore’s Law and the maturation of connected devices, many modern technology products are fast and efficient with little perceived latency. Mobile computing and network speeds are remarkably quick compared to even five years ago.

But with so many users accustomed to spotty internet service, old technologies, and buggy software, fast operating speeds can cause them to worry about whether your product is working correctly. Wells Fargo’s eye scan technology, for example, was so quick that users didn’t believe it was doing what it said it was. The developers artificially slowed the process by strategically including scanning and authenticating progress bars. 

Slowing your product to match user expectations should, however, be a stopgap solution. Look for opportunities to educate users on today’s software speeds. Within the product itself, explain how your software is faster than ever. 

Facebook, again, provides an illustrative example. Ever notice how it pushes temporary notifications into your newsfeed following a product update? Each update mentions how Facebook is constantly working hard to improve the platform’s speed.

In your own product, take it one step further and include a call to action to allow users to provide feedback. Have an FAQ ready (or, even better, live support) to respond to this feedback and help users understand what’s really happening behind the scenes of your software.

3. Work Within System Constraints

Keep in mind that not all devices are connected to fast internet providers. Your product’s users might be of modest means or live in rural areas, or your own server infrastructure might not be up to snuff.

Either way, progress indicators such as loading bars can remind users that your product is still working on their request. For example, FirstRand Bank Limited of South Africa baked an artificial progress bar into its web interface. Because its infrastructure is outdated and slow, information can’t be displayed as quickly as it could, say, in Wells Fargo’s app.

Again, consider the user’s experience. If you’re a FirstRand customer staring at a blank screen for 15 seconds after clicking a button, wouldn’t you try checking your connection and refreshing the request? Unfortunately, these actions only make the bottleneck worse.

A fake loading bar might not be the ideal solution, but it’s better than providing no feedback at all. Animation to show that your software is handling the user’s request provides relief for both your servers and your users.

Speeding Up or Slowing Down?

All this talk of slowing down software requires some historical context. System limitations and users’ past experiences may be slowing things down, but on the whole, technology is pushing toward faster user experiences.

The more time that elapses, the more long-term tech users we’ll have. The more long-term tech users become accustomed to instantaneous results, the less UX designers will need to slow down their technologies. The faster technologies work — and, importantly, work correctly — the more users will trust them. Meanwhile, younger generations without the preconceived notions of their parents will grow into adults who are accustomed to seamless technological experiences.

Older generations who aren’t comfortable with technology still exist, however, and two people of different demographics rarely have the same comfort levels with the same technologies. Today, intentionally slowing down certain product scenarios can help older users feel comfortable with what’s happening to their data.

When slow systems (by today’s standards) are gone and people are used to instantaneous results, how much systems reveal to us about their back-end operations may become a question of personal freedom. As humans, we want to feel in control. Choices are comforting.

Ultimately, speed is important, but so is matching users’ expectations. No matter how fast we move into the future, slowing down will never go out of style.

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Sunday, September 24, 2017

Popular Design News of the Week: September 18, 2017 – September 24, 2017

Every week users submit a lot of interesting stuff on our sister site Webdesigner News, highlighting great content from around the web that can be of interest to web designers. 

The best way to keep track of all the great stories and news being posted is simply to check out the Webdesigner News site, however, in case you missed some here’s a quick and useful compilation of the most popular designer news that we curated from the past week.

Note that this is only a very small selection of the links that were posted, so don’t miss out and subscribe to our newsletter and follow the site daily for all the news.

What will the Design Industry Look like in 2022?


GitHub Desktop 1.0


10 Free WordPress Themes from 2017


The 5 Biggest Myths About Stock Imagery in Design


Parallel Chat – UI/UX Case Study of a New Chat Interaction


Laravel Voyager – The Missing Laravel Admin


Burst: Chat with People You Disagree with


Icongram – Icons on the Fly


A Wikipedia for Data Visualizations is Here


Redesigning Apple’s Mail App for Myself


Dropmark for iOS


9 Recommended GitHub Repos for Interface Design


Colors: A Data-driven Collection of Beautiful Color Palettes


10 Useful Web Typography Frameworks and Libraries


What We Can Learn from Facebook’s 2006 Newsfeed Redesign


We Can Design a Better Inbox…


Dear Designers, Love your Developers Because They’ve Learned Display Grid


The Best Colour Tools for Web Designers


Material Design Awards 2017


24 CSS Galleries


Yes, Bill Gates Regrets Ctrl+Alt+Delete


When Copy Loves Itself Too Much


50 Top Typography Tutorials


Don’t Be Afraid of the Ugly


Stripe – New Logo


Want more? No problem! Keep track of top design news from around the web with Webdesigner News.

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