Retention is breadth. Engagement is depth.
– Brian Balfour

Retention is how long the user stays in your product.
Engagement is how frequently and intensively your customers use your product.

If Retention can be measured in lifetime, Engagement would be the measure of the quality of that lifetime.

Let’s put it in an example:

Louis and Paul have been using Miro for a year in their company. They have the same retention.

Louis is a Marketing Manager. She uses Miro to facilitate brainstorm sessions, run online workshops, or simply put [her thoughts on paper]. She’s Miro’s cheerleader inside the company, being the main reason why they started paying for it in the first place.

Louis uses Miro every day.

Paul loves Miro too. It’s the first time he interacts with it. He’s a Lifecycle intern so he uses Miro when his manager, Louis, invites him to brainstorm sessions and team-building activities. Paul doesn’t yet dominate Miro’s functionality and never created a board for himself.

Paul uses Miro once every two weeks or so.

Louis is significantly more engaged than Paul.

I guess we wouldn’t have to go dive deep into our data to bet that Louis is much more likely to continue using Miro for a very long time – even if she moves to another company.

Paul does enjoy using Miro too, but he never invited a colleague there or played around with his own boards. The chance of Paul continuing to use Miro if he moves to another company probably isn’t that high.

Now that we cleared out the difference between engagement and retention, let’s look at how we should think about it in practical terms.

The problem with “optimizing for retention.”

When we’re at work, we often hear about “improving our retention.”

Watch out for this one, as it’s a conceptual red flag.

It means that your company probably doesn’t understand that retention is the result of activation and engagement – and not the other way around.

> Retention = Activation + Engagement

Retention is what we call an output metric. It is the result of activation (we’ll discuss it next week) and engagement. So, to increase your overall retention rate, the only way to do it is by actually improve your input metrics (engagement and activation).

And it’s easy to see that if we reflect on real customer stories. Let’s continue on our example from Louis and Paul.

If we want to increase our chances of staying with Paul for the long run, what would we have to do? I don’t work at Miro, but I can guess what I’d like to see Paul doing more so it becomes more engaged. Things like:

– Creating his first board
– Spending X minutes playing around with his board (activation)
– Sharing his board with at least one person
– Creating a second board after X days (habit formation)

But how?

Not by sending a blunt 7-day email series on how to create a board. Right?

Instead, we can do our best to understand Paul’s jobs to be done and think backward to hypothesize how could we help him by using Miro.

Then, we could look at our Marketing Channels and Product Real Estate – banners, in-app messaging, tours, etc – to figure out what would be the best way to take that message to him. A message that would aim to connect Paul to experiment more with Miro’s core product value.

The whole idea here is that, If we do our job well, we’ll actually manage to help our customers. This will deepen their engagement, which will then be reflected not only in retention rates but also on the positive network effects it may unlock.

As far as I can tell, that’s the proper way to look at it.

What usually happens when we optimize for retention instead
This is not only not optimal but also potentially harmful to your branding and product positioning. I’ll explain.

From experience, I can see that this train of thought usually leads to artificial tactics such as:

– Forced onboarding experiences
– Unsolicited trial extensions
– Dull drip campaigns
– Random discounts
– etc

Those are all classic desperate moves – usually taken when teams don’t understand the forces at play when we talk about retention and engagement.

I call it desperate because although they might make the numbers look better in the short term, they fail to address to solve the root causes of engagement problems. It can also deplete your brand’s value and contribute negatively to word of mouth – which is easy to cover up.

If I look back at all failed retention strategies I’ve seen in the past years, they all have a flavor of these artificial strategies.

Summary
– Retention is about how long the user stays in your product. Engagement is all about usage frequency and intensity
– Retention is an output of your Activation and Engagement
– Proper engagement strategies are rooted in customer centricity and great analytics
– Poor retention strategies use artificial leverages to force the user through the product journey

 

 

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 Podcasts I’ve been listening

This podcast episode with Elena Verna on how B2B Growth is Changing is incredible. I started to follow her on LinkedIn a few weeks back and the only regret I have is not finding out about her sooner.
In this episode, she talks about Product-Led and Sales-Led models in a complementary way instead of the usual one-over-the-other kind of approach. Highly recommend.

 Tools I’m using

I started using Ulysses this week to write these newsletters and I’m absolutely loving it. This is a spontaneous shootout, by the way, they’re not sponsoring this newsletter.

I love that I can write with markdown and that I can now write without being distracted by the internet. This also makes posting on WordPress dead easy. Check, check, check.

Ulysses is included in my Setapp subscription. You can get your first month for free on this link.