Growth Frameworks — The Retention Lifecycle Framework
The Retention Lifecycle Framework was first introduced by Amplitude Analytics in 2016 and is a major part of the 2017 published Product Analytics Playbook. It is very helpful because Retention is probably the most important step in the pirate funnel but it is somewhat difficult to fully understand the metrics behind it. Knowing that you want users to come back again and again on one hand and prevent them from leaving, on the other hand, is obvious but not enough to really work metric-driven in this area.
The Retention Lifecycle Framework helps you to understand the processes and mechanics behind reaching these goals and thus it makes it easier for you to describe your challenges, organise your work, and create a strategy based on the methodology laid out in this framework.
The Framework
The framework differentiates between 5 different categories of users. The Power Users are the ones you want to create and the Churned Users are the ones that you want to prevent. Between those two categories of users, there are three different types of active users.
The New Users
These users just started to use your product by signing up via email or by downloading and using your app. The ultimate goal here is to activate them. Show them something or make them do something that really makes them understand why your product adds value to their life.
The Current Users
If the new users understand the value of your product they become current users. Only current users can ultimately become power users and thus it is very important to have as many current users as possible.
Resurrected Users
The resurrected users are formerly Churned Users that you were able to resurrect and now need to be reactivated to become current users.
The Action Steps
The model outlines guidelines for growth marketers and they can be differentiated into 4 different actions or work areas.
Resurrect churned users
When the user shows an indication of churning behavior you have to treat this very delicately. Really think about your product and what it offers and why exactly users might churn and if you do not know, you have to ask users. Do not try to prevent users from churning at any cost, it really has to fit your product to convince them to stay with you.
When a user cancels you can apologise that he is not satisfied and offer him another month for free and still cancel after the free month without him indicating it again. This gives you the chance to reactivate him.
Furthermore, you can simply show him what would be coming up in the next months and what he would miss out if he is leaving. If you are an online course company, you can show him some new courses that are about to appear soon.
You can make your operations part of the cancellation process. That means when the user indicates a cancellation then he has to briefly chat with an actual human being that can individually make some efforts to try to win him back. This way of trying to prevent churn can backfire severely and I would only recommend using this at scale when it’s properly tested.
Activation
This element shows why retention and activation are so highly interrelated. There are many good ideas on how to transform a new user into a current user by showing them some wow moments and I would have a lot more things to tell about activation but here are just some things that work with most products.
If you surely manage to find the wow moment for the majority of your users, it is your task to make it possible for every user to reach this wow moment as fast and easily as possible. It is known that Facebook realised that their wow moment is to win 7 friends within 10 days and they started to enforce this into their activation flow. However, sometimes it is not too easy to find this wow moment or your product has not one particular wow moment but rather different ways to impress users.
A method that can help you find this wow moment is onboarding call. Each time a user indicates that he wants to use your product you offer them an individual call in which an onboarding specialist will introduce the product. This can help you to better understand what the users really would like to see as features or events. Superhuman even implemented these onboarding calls at scale.
Reactivation
The reactivation is very similar to activation. Here, it really matters that you understand your users. You should understand why the user churned or could not be activated.
Data can tell you if there is a particular event that you did not identify as a wow moment but maybe this kind of user would have liked to experience. You can try different wow moments that possibly work only for a specific segment of users.
Essentially, you could also use in an individual call to analyse why users stopped using your product or to even make individual calls a path to reactivate users.
Create Power Users
Bringing your users from current users to power users is the ultimate goal of every growth manager. However, there is no recipe for that. Power users simply love the product that you created and the features that it has. However, closely looking at data and getting feedback from your user can help you out a lot here.
Power users can be created by implementing killer features as Pinterest did with infinite scrolling. This kept users even longer on their platform and suggested that their content is bigger than it actually was at that time.
The blue and grey hooks for WhatsApp can also be considered a killer feature. WhatsApp has very high retention already but providing another reason to look back at a message you sent other than someone replying makes people even come back more often.
The Importance of this Framework for Growth Manager
The Retention Lifecycle Framework is important for growth in many different ways.
First, you can see that activation is an important part of retention and thus these two funnel steps are highly interrelated. You can only reach high retention when the activation is also very high.
Second, the retention step does not only depend on pure data analytics but also depends essentially on your definitions. You are the one that must define when exactly you consider someone as a current user and you are the one that must identify power users. This will enable you to build segments and look at these different retention segments by analysing different channels and time intervals to draw conclusions.
By breaking the different actions down into different steps (as described above) it gives the growth manager a better idea of what is his actual challenge. By knowing this, it becomes obvious that there are many ways to solve this. It can certainly be solved by using CRM or by using traditional digital marketing methods or it can be solved by using pure manpower by doing user calls. However, this is exactly why this is a topic for growth managers since there is no predefined way and not even a predefined channel to solve an issue like this. Growth managers can, however, provide all possible solutions and it does not matter if this is originally a topic for Marketing, Product or Data.
This article is part of the Growth Frameworks Series in which I publish frameworks and concepts that I consider useful for the everyday work of growth managers. Most of these frameworks and concepts are already published and explained elsewhere and were not invented by me. However, I will explain how I understood them and also provide some practical examples of how to apply them in each article.
