How do you diagnose low retention?

Question

A client of mine recently reported that they're not satisfied with the retention rate on their web application ( intended to help lawyers with the administration of their firms).

This stemmed from viewing our cohort analysis report in Google Analytics, monitoring user retention (just at least revisiting the site) from date of acquisition.

It looked like only a very small fraction of users would ever return to the application after a week, let alone do so repeatedly, over multiple weeks. As in, only 1-2% of people who signed up for the application would return repeatedly for any amount of time.

I have no idea what an industry baseline for user retention on legal web applications looks like, but we assumed that this number was a sign that our application isn't as useful to people as we'd like it to be and that we should look to see it increase somehow.

So, in order to figure out how we could make our product more useful, we want to know:

• Why is retention so low?
• Why don’t most people habitually use our application?
• How could we make our platform more habit-forming?

How could we answer these questions?
(Assuming these are the sensible questions to ask in our situation)

Thanks!

Answer 1

Just ask

Start by interviewing your target group. You're in a great market because it's not too difficult to identify the user you think you're after. I'd focus on three sub-groups in particular.

1. Users that didn't come back. A simple survey of a percentage of this group should do. Ask what inspired them to sign up in the first place, what they expected the app to help them with, and why they didn't return. The specifics will depend on your app.

2. Users that did return. Ask some similar questions. You can probably get a little more detailed with this group, but make sure you have good "benchmark" questions that will allow you to identify the distinctions between groups 1 & 2.

3. A random sample of your target audience. This group either doesn't know about your app yet, or hasn't bothered to sign up. You'll want to ask them more general questions that help you understand the product/market fit.

Then watch

Observe at least 5 target users (7-10 is better) reviewing the value proposition and your application on-boarding process and one or two features. Record what they do and say. Compare this to your survey results.

Things to investigate

Without any of that critical background info, I'll throw out some areas to investigate. As you go, make sure you're measuring against your own benchmarks. Looking at market averages can be disastrously misleading.

• How do your second and third return stats look? If that's low too, it points to either a product/market fit problem or something failing with the product experience.

• Does your application do a good job of progressively on-boarding users? They should be able to "self-learn" via in-app prompts and feature discovery.

• Are the most important features easy to find and use for new users? Most users are exceedingly impatient with a new product.

• Is there a competitor that might be stealing them away with a better first impression? Hopefully, you've already gone stealth and tried them out.

• Are you doing anything between initial sign-up and the return visit to encourage your users? You have their email address, right? It's probably their office address. That's a great way to stay in touch and provide proactive help.

In the end, the most important stat is:
Are you on a path toward profitability?

If you can make a profit, you can stick around to refine over time. Maybe low retention is just a fact of your product.