Did you know that acquiring a new customer can be up to five times more expensive than retaining an existing one? That's why businesses must focus not only on converting leads but, more importantly, on keeping users engaged and satisfied. All the effort put into onboarding a client is wasted if they stop using the product, especially when their lifetime value (LTV) is lower than the cost of acquiring them. In this article, we’ll explore proven strategies to boost user engagement and prevent churn, ensuring that the investment in your clients keeps paying off.
Sustaining growth
Before we outline the strategies to manage engagement and churn, let’s start with the definitions of both to make sure we are all on the same page:
User Engagement
User engagement refers to the level of interaction, involvement, and activity that a user has with a product or service. In IT products, engagement is measured by how frequently and meaningfully users interact with various features, perform tasks, and achieve outcomes within the platform. High user engagement indicates that users are finding value in the product, actively using its features, and are more likely to continue using it over time.
Churn
Churn refers to the rate at which users or customers discontinue their use of a product or service over a given period. In IT products, churn occurs when users cancel their subscriptions, stop using the platform, or fail to renew their contracts. Churn is a critical metric for businesses because it represents lost customers and potential revenue, and reducing churn is a key factor in long-term product success and growth.
Now, it’s worth pointing out that organically any action improving engagement will likely reduce churn. For that reason, in this article, by engagement, we focus on strategies that actively sustain growth and keep users happy and using the product. On the other hand, in the reduce churn section, we will present actions aimed at keeping users who are likely to quit the product soon. Thus, without further ado:
Increase engagement
Increasing engagement can often be reduced to saying “Just build a good product” and indeed client centricity is not far off from the goal of keeping users using the product. However, it’s a balancing game between creating a “sticky” product and working on features that are more business-focused. Thus, let’s focus on what actions you can prioritize to easily get the users to use the product often.
Provide superior user onboarding
The initial impressions will either solidify or completely dissolve the user’s enthusiasm and are therefore crucial. Use interactive tutorials and guided walkthroughs to highlight key features and don’t shy to provide different alternatives; Some users will prefer to read, and some will want to watch tutorial videos. However, the key here is to build a UX that is easy to learn and pleasant to use. Consider adding a little more UX glamour to the onboarding stage.
Identify and optimize the magic journey
Magic journey, or magic moment is a set of events in your product that convert a beginner user into an engaged user. For example, in the early days, Facebook discovered that users who accumulated 9 or more contacts were very likely to stick with the platform. Thus, Facebook started building the product around building users’ friend network. While it can be extremely hard to identify, get your data analyst on the hunt for the magic moment in your product using data and make sure that all user journeys lead through it as much as possible.
Provide personal experience
You need to make sure that the user has a perception of using a product crafted specifically for him/her. You can start by using the user’s name and picture throughout the product to create an intimate feeling. You can also consider having an option to adjust the product and its UI to best serve a particular user. If applicable, invest in implementing recommendation engines and personalized content.
Build a community
In order to keep users engaged, you need to keep them close and give them a platform to express their opinions and suggestions. If they’re willing to talk about the product, they become more invested. Replying to messages and moderating the conversation will deepen this connection further. However, if an organic community emerges, don’t force your own “official” one. Instead, leverage and promote the organic one to strip the mentioned connection of having a feeling of corporate oversight.
Regular updates
Any product that changes and surprises its users, keeps them interested. Of course, we are talking about user-centric updates that those users will like and appreciate. From product management engagement boosting updates can be difficult as they are rarely tied to main business metrics and they take a long time to measure. Not to mention that it is challenging to pin an increase in engagement to any specific feature, as it is often a compound effect. To that end, you might need to book some of your roadmap with user-centric updates that will have an impact that is not worth measuring, while still making a sensible investment.
Introduce gamification
When using this strategy, you reward the user in some way for being engaged and active. Sometimes the reward can be as trivial and easy as supporting messages with nice animations. Perhaps you can provide limited access to the premium features as a reward? Regardless of the reward structure, be sure to integrate the gamification in a way that makes sense and provides rewards meaningful to the user. Senseless gamification can provide an initial spike in engagement from course users, but it won’t help in the long run.
Stay ahead of the market curve
In this strategy, we go a little beyond being client-centric and focus on being the best in the market for your services. If you can provide the best user experience, the best quality service, or great features not available with any other competitor, then your unique value proposition will contribute greatly to increasing engagement. It’s sort of enjoying your luxury car very much, though driving regularly-priced cars is not that far off.
Excel at customer support
Especially for small and medium B2B companies, responsive and helpful customer support will make or break your contracts. Thus, be sure to address user issues promptly within a transparent and known SLA. Also, while there is nothing wrong with an AI chatbot sorting first-line support in the product, ensure that it is also as easy to connect to real human beings for help. If a user feels well taken care of, they’re likely to stay with the product and provide great word of mouth.
Decreasing churn
Let’s assume you followed the strategies and did all you could to keep users engaged. Unfortunately, you will never retain all of your customers indefinitely. Despite that, there are ways to turn back some of the users who set their eyes on the doors. Here are a few strategies to achieve that:
Churn Prediction and Proactive Retention
A good approach to preventing churn is to see it coming. Call your data analysis team again and ask them to identify users at high risk of leaving. This is a task similar to identifying the magic journey and should result in a list of users that need attention. Consider building a client success team that would reach out to those users and offer to address concerns, offer help, or remind users of the product’s value before they disengage completely. If your product is B2C, replace that with an automated email flow that will do that in place of the client success team.
Retention Offers and Incentives
When a customer begins the process of canceling their subscription or service you can attempt to sweeten the current deal so it's hard to resist. You can present retention offers, such as a discount, free additional features, or extended support to incentivize them to stay. Alternatively, you can also present the user with downgrade Options. Offer them the ability to reduce their package rather than cancel altogether. This keeps them within the ecosystem and leaves the door open for future upselling. As a final hail mary, you can suggest pausing the service rather than canceling it. The user no longer pays, but leaves the door open for you to give him an even better return offer later or at least make sure the user keeps up to date with the latest releases of your product.
Make it a tad hard to quit (in an ethical manner)
Let us make this point very clear: it’s not about making rocket science out of leaving your product. Just make sure it’s not as easy as a few clicks, so there are no spontaneous cancellations and instead, you are always dealing with a user that really made up her/his mind. Even then, displaying all the options from the previous paragraph in a series of separate screens can potentially keep the user. In fact, showing that many screens should complicate the journey enough to sway any “spontaneous quitter” from completing the cancellation process without having the product appear shady or dishonest.
Conclusion
By implementing the strategies we've discussed, you can create a product that not only attracts users but also keeps them coming back. Focus on providing exceptional onboarding experiences, personalizing the user journey, and staying ahead of industry trends to boost engagement. At the same time, proactively predict churn and offer thoughtful solutions that make your users think twice before leaving.
Remember, the goal isn't just to prevent users from leaving; it's to make them want to stay. By investing in your users' experiences and addressing their needs, you're turning them into loyal advocates for your product. Take these strategies, put them into action, and watch your user base grow stronger and more engaged.
