3 Things to Do Before Implementing Customer Retention Strategies

Originally published on the Massive Rocket blog

Every product team knows customer retention matters. But for the team at Kwit, an app that helps users quit smoking, retention is about more than keeping users coming back. It’s about helping people build life-changing habits.

Before implementing customer retention strategies, though, it’s essential for any product team to audit your analytics set up and ensure you have accurate data and a clear view of the customer journey. From there, your team can identify:

• what drives retention for users;
• when and why users are dropping off;
• and what improvements can be made to drive retention.

All of this work comes prior to actually implementing customer retention strategies. To learn more about high-level strategies or granular tactics you can employ to keep users coming back for more, explore the Amplitude Guide to Customer Retention. To get a refresher on retention principles, you can also sign up for the Customer Retention 101 email series or read the Mastering Retention playbook.

In the Q&A below, digital marketing agency Massive Rocket interviews Kwit CEO Geoffrey Ketz to understand how his Strasbourg-based team thinks about retention to drive growth and make a sustainable impact.

Massive Rocket: What is Kwit?

Kwit CEO Geoffrey Kretz: Kwit helps people stop smoking for good, using gamification to drive long-lasting behavioural changes in individuals. We rely heavily on CBT (cognitive behavioral therapy). In short, our app helps people understand their behavioral and cognitive relationships to the addiction, so that these can then be addressed at a deeper level.

We’re quickly approaching 2 million downloads globally, we have over 200,000 active users (with a third of these being in France), and our app has been rolled out in no fewer than 15 languages. The French, Dutch, Russian and Turkish versions of our app regularly feature in the App Store’s Top 25 paid Health and Fitness apps.

We recently conducted a study that shows we have a 21% success rate. To put that into perspective, that’s 3X more successful than traditional methods of quitting.

Massive Rocket: What benchmarks does your team use to measure customer retention?

Kwit CEO Geoffrey Kretz: Generally speaking, we find that it takes 2 years to pass the critical phase. There’s a 15% chance of relapse and smoking again after year one, but just a 3% chance after year two — so it’s key that we get as many users as possible to stay with us for two year and past this benchmark.

We use the AARRR framework (Acquisition, Activation, Retention, Referral, Revenue) but in the right order, so it becomes RARRA — Retention, Activation, Referral, Revenue, Acquisition. If you focus too early on acquisition then you’re essentially throwing water into a leaking bucket.

Massive Rocket: Why are data and personalization important to you?

Kwit CEO Geoffrey Kretz: Addiction is intimate… Everyone’s addiction is slightly different. Therefore, accurate personalization is crucial in building trust with our users — we want them to know that we understand the specifics about their addiction, not just addiction in general.

Of course, the backbone of successful personalization is having the right data… In order to gain as much relevant data as possible, we ask a series of questions right at the beginning of a user’s journey. These include (among other things) their age, sex, and how long they’ve been smoking.

We then tailor the in-app journey depending on their answers — everyone has a slightly different experience depending on their specific circumstances.

Massive Rocket: How do you get your users to stop one bad habit (smoking) while simultaneously building a positive habit (using your app)?

Kwit CEO Geoffrey Kretz: We take quite a unique approach to help users quit smoking. Historically, the topic of addiction has always been around guilt and negative emotions — the main tactic up until now has been to scare people (think of all the images on tobacco packages).

Instead, we try and remove the guilt: emphasising that even if they fail, we’ll still be there to help them try again. Quitting can be a very emotional process so we try to make it as painless as possible.

We actually took a lot of inspiration from Nir Eyal’s book, Hooked: How to Build Habit-Forming Products. I’d recommend it to anyone who’s looking to focus on increasing their levels of customer engagement — it’s a great read.

Addiction can be a lonely road; when you’re at your lowest ebb, it can really help to receive a motivational message. It’s important to remind people that they’re not alone.

Massive Rocket: What is customer retention and why does it matter?

Kwit CEO Geoffrey Kretz: Customer retention refers to any strategies that companies use to keep their customers coming back again and again: whether it’s to buy a new product or to continue using your service.

Retention is on the whole cheaper and requires less effort than constant acquisition. Existing customers have already gone all the way through the funnel and (hopefully!) somewhat trust your product/service. Therefore, it’s easier for you to sell to them than it is to sell to someone who’s never even heard of your brand.

For this reason, companies always aim to retain as many customers as possible — and put a special emphasis on fine-tuning their retention strategy.

When it comes to apps, retention doesn’t necessarily mean upselling existing customers — it primarily refers to making sure that users keep returning to your app.

However, user retention amongst apps is particularly low; 80% of new users stop using the average app just three days after downloading it. It’s nice if your app is downloaded by thousands of people, but it matters little if they all stop using it within a few days.

Your retention rate is highly indicative of your company’s overall performance. You might think that you have a great app or wonderful products — but if you can’t keep hold of your users/customers, then your business has a problem.

A common misconception about retention is that it only matters after your company is past a certain stage of growth. In reality, once you have a portion of users coming back to your product on a regular basis, you have enough information to then begin optimizing for retention (no matter your company size).

Keep these three things in mind if you’re beginning to implement customer retention strategies:

1) Understand what ultimately drives customer retention for your business

What value do you offer your users/customers? How can you demonstrate this value as quickly as possible (so that consumers trust your brand from the get-go)? As valuable as it is to recognize your weaknesses, you also need to play to your strengths.

2) Figure out when and why your users are dropping off

In order to pinpoint their exact reasons, you’re going to have to acquire plenty of customer feedback. This might take a fair bit of time — trust us, it’s worth it. Work out what you’re doing well, what you’re not doing so well, and even consider what your competitors are doing better than you.

3) Understand how you can improve your product or service to increase retention

Once you’ve identified why people are dropping off, you can now focus on what you should do to remedy the situation. This isn’t a one-time effort; it takes ongoing monitoring and tweaking. If you get customer retention right then the payoffs are large — so it’s well worth putting the work in.