Are you familiar with the retention lifecycle framework? It recently gained many new “followers” when Duolingo posted about how their focus on current user retention drove their growth, but the utilized framework has been around for years and is a concept you have to understand if you want to drive growth through your product.
First things first. Have a look at the figure below and you see that it segments users into the following buckets:
New users first go through an activation flow where they are set up for success before becoming current (retained) users that have established a habit. Current users can be further segmented into casual, core, or power users depending on their product usage. At all times, users may churn and churned users may be resurrected until they eventually become current users again.
👉 If you think about your product along this retention lifecycle framework, it allows you to think more strategically about how users interact with your product differently depending on where they are in their journey. This is not a one-time exercise, but something you should be iterating on to gradually improve transitions from one user type to another (e.g. from New user to Current user, or even within Current users from a Casual user to a Core user).
How can you transform new users into current (retained) users? Sounds like a familiar problem? Working on the (extended) activation funnel is so important that it is okay if it consumes the majority of your team’s efforts for longer periods of time. Let me provide some guidance on how using the framework gives you a structured approach on improving user activation.
✅ Let’s start with the setup moment. This is a critical point because it prepares the user to get the most out of the app. The setup moment is not necessarily about creating an account, signing up or converting to paid. It is about the moment when the user has performed the key action to set themselves up to experience the later Aha moment. As such, I would classify Facebook’s famous Aha moment of having 7 friends within a week not as an Aha moment but rather as the setup moment. Another example is SurveyMonkey’s setup moment which is about finalizing the questions for your user survey that you plan to run. The setup moment is measured by
Setup moment = Number of times the user has performed the key action within a certain period of time
💡 The Aha moment is a pivotal point in the user's journey where they experience the main value proposition of the app for the first time. It's the moment when users realize how the app can solve a problem, fulfill a need, or enhance their life in a meaningful way. In other words: it is crucial for driving user engagement and long-term subscription retention. For example, for Spotify the Aha moment could be about the first time the user has played a song within the first 7 days, and for Facebook it would most likely be the first time you see one of your friends post in your feed or message you within the first 7 days. The Aha moment is measured by
Aha moment = First time the user has experienced the core value proposition within the initial time period
🔁 The habit moment occurs when the user has formed a regular pattern of using the app. This involves frequent interactions with the app that has become a part of the user's routine. For uber, the habit moment could be that users booked 4 rides within the first month, for Spotify it might be around having listened to 20 songs within the first month. The habit moment is measured by
Habit moment = Number of times the user has performed the key action within the initial time period
👉 Once you have an understanding of your setup, Aha, and habit moments, you need to think about how you can get your users in the best way through this activation funnel towards high engagement and retention. While the product experience plays the most important role along this journey, CRM (customer relationship management) can assist in activating users and driving retention.
I keep mentioning the importance of activation and retention. One method that can help you improve across the activation and retention lifecycle is CRM. Here are three CRM strategies that can accelerate your app’s growth:
👉 All of the above strategies drive users to explore, experience, and commit to your app. As the app market continues to evolve, integrating CRM and messaging becomes more than just a strategy - it's a necessity. By focusing on user-centric interactions and staying tuned to individual preferences, you can truly supercharge the user journey and create an environment where users don't just subscribe once but stay engaged for the long haul.
CRM plays a major role in preventing churn. Imagine receiving a message that suggests a new workout routine tailored to your fitness goals just as you started losing interest in your fitness app. That is the power of automated and personalized messaging. Will it work for everyone? No. But personalizing the message and sending it at the right time (and sometimes location) will increase the chances of success. A study from SmarterHQ showed that 72% of users will only engage with personalized messaging.
So how do you know when to message whom? Many martech solutions offer predictive churn prevention modeling as part of their plans. By analyzing historical user data and interactions, these models identify patterns that signal potential churn. However, they often have a caveat that they cannot be optimized to your key events and instead only consider overall activity within the app which might not necessarily be a signal of churn in your app (e.g. think infrequent usage apps). Another approach is to build your own RFM matrix (Recency Frequency Monetization) to segment your customer base which allows you to identify at-risk customers.
Once you know whom to message, you need to figure out the right copy to keep your customer base from churning. For some users a reminder of your app’s value may be sufficient, while others will require a targeted incentive or offer to get them back into your app.
If you need support in crafting your retention and customer churn prevention strategy, feel free to reach out.
While retention and preventing churn should be your number 1️ priority, resurrecting churned users 🧟 can be rewarding too.
The process of winning back churned users, often referred to as "winback," is a strategic endeavor driven by CRM. As for any CRM initiative, you need to get the personalization right: target the right customer segment, craft compelling copy, and send the message at the right time.
Winback messages are not just about discounts. They are value propositions that reignite user interest. Offering an extended trial or exclusive content that aligns with the user’s past interactions will accomplish better results than a generic discount message.
For example, Spotify may send a message to churned users who often listened to a certain artist informing them about a new album of said artist. Similarly, Netflix may inform churned users that a new season of a series they watched in the past has been released or about a new series or movie that fits their profile, effectively recommending new content they are likely to enjoy. On top of that, they may offer a free month of subscription or similar exclusive discounts.
👉 Churned users needn't be lost forever. With CRM tactics as your guide, you can rekindle relationships, re-engage subscribers, and resurrect app engagement even if your churn prevention methods have not worked previously.
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