If you’ve plotted a retention curve and you know how many people continue to use your product six months after they sign up then the next step is segmentation.
Segmentation means looking at subsets of different types of users. Let’s say, on average 40% of people who signup continue to use your product six months later. If you break it down you might discover that 60% of people who sign up with a business email address continue to use the product. On the other hand, only 20% of people who use a free email account (like Gmail) stick around.
You can use this information to focus on your strengths and cut your losses. “We now require everyone to have a business email to sign up”.
The other way to look at this is to focus on improving the segments that pull your average down. Segmentation reveals where you’re underperforming. It maps out regions of fertile ground for growth.
The easiest way to start segmenting a retention curve is to use the data your tools automatically track. What technology people use, their general location, which landing page they came through, the traffic source they came from, etc.
Segmentation gets more interesting once you start to look at more specific user-generated inputs. The free vs paid email is one example here. The actions people take in their first two weeks is another, the notifications they respond to, the ones they ignore, how often they interact with customer support, the features they use, the one’s they don’t, how often they use the product, their payment tier, etc.
The idea is to segment your curve in as many ways as you can. Each layer of segmentation tells a different story.
Other questions to ask yourself to improve your retention…
- Does your product make a clear promise?
- Do you know how often people have the problem you help them solve?
- Do you know what your product’s core action is?
- How many people continue to use your product six months after they sign up?