I learned 13 lessons on customer retention by looking at the apps I always use

You can spend a lot of time and money acquiring new users, but real success lies in how many of them stick around. As of now, though, customer retention data looks pretty grim.

According to this article, 86 percent of new mobile users never return after the initial download, while a mere 2.7 percent stick around after 30 days. But customer retention is important. After all, increasing the rate by 5 percent increases profits by 25 to 95 percent.

So, how do you go about fixing your customer retention rate? In order to get a firsthand understanding of the topic, I turned to some of my favorite apps to figure out what led me back to them day after day. A lot of these companies were kind enough to share their customer retention strategies with me, while I learned about the others’ through their blogs and interviews.

Customer journey

Each customer goes through three stages: new, occasional, and power user. Your ultimate goal is to convert every new user into a power user, and your retention strategy should cover each of these stages.

But first, you need to define what it means to be a power user of your product. In other words, what are the key retention metrics for your product? Once you define these, it’s time to track and work on improving them. Here’s how you can improve your customer retention rate like a pro.

New users

The onboarding experience is the most important step in a user’s journey. Get this right and you’ve got a lot less to worry about later!

But what does it mean to onboard a customer successfully? Behance founder Scott Belsky suggests that successful businesses are built when a majority of their new users reach “The Zone” or the point where they know three things:

1. Why they’re there
2. What they can accomplish
3. What to do next

Here’s what to keep in mind when designing your onboarding flow:

Show users the value of your product first

Most startups are too concerned about getting their hands on users’ details first. But language learning app Duloingo does it differently. When you head over to the app, you’re asked which language you’d like to learn—no signup page or lengthy forms. Next, you set a daily goal and take a test to gauge your familiarity with the language. Meanwhile, the signup button lingers somewhere in the background. Before you know it, you’re engrossed in the test and have signed up to save your progress.

Duolingo VP of growth Gina Gotthilf says this approach was a result of extensive testing. Initially, a lot of people who downloaded the app were not signing up. This meant the team couldn’t send them notifications or emails. How did they fix this? They let users play around with Duolingo first.

They also changed the design of the page, replacing the discouraging “Discard my progress” button with a more subtle “Later” option.

Occasional users

Power users

Wrapping up