Using product analytics to find metrics that connect to retention
Let me jump right in: With product analytics, customer retention isn’t just something you measure after the fact; it should be something you can learn to find specific metric connections for (and then improve).
I get it—data and analytics sound technical and scary, something only “really smart analytical people” should touch. How could a product manager possibly dig into the data and pull up something that’s genuinely useful for activation and retention?
Simple: Product analytics tools have become super easy to set up and use. Now, I encourage product managers to just start getting their hands dirty with the data and see what they come up with. With time, you can learn quite a bit about your users, your platform, and just how important it is to challenge your assumptions.
Here’s what we learned about finding retention trends by just jumping in with the product usage data.
Tying analytics to business goals in a product-led startup
First things, first: Make sure you’re tracking the right things and tying them to the most important product outcomes.
You might be at a startup, but it’s not the Wild West; you still need to tie your metrics back to bigger business goals. Many teams I talk to do a fair amount of tracking, but they don’t answer the critical points of why we are tracking the things we’re tracking and what we’re tracking toward?
Start by talking to business stakeholders, like your leadership, customer success, marketing and more. Learn what matters most to them (hint: retention should be a common thread), and track accordingly.
This is particularly important when you’re product-led. Giving customers access to the product as early as possible puts you (as a product manager) in a unique position to help every other team understand how customers get value out of the product. But you (as a product manager) should tie these conversations back to the business goals that every other team in the org holds near and dear. The sooner you start having these conversations, the better.
Retention is a key metric for any startup: Here’s a quick example for how to find correlations to it
I’m a big fan of talking to customers to understand their pain points. But there’s nothing like cold, hard data to tell you when and where there’s a dropoff.
As a VP of Product at Roam Digital, a full service consultancy, I’ve had the opportunity to work on a wide range of B2B and B2C products. Suffice it to say I’ve seen the power of data in plenty of contexts. One great example was a dashboard aggregation product we developed with a client.
Since the products we help with are in their early stages, our work focus has typically been at the top end of the funnel, along with lots of experimentation with various customer segments and optimizing the onboarding process.
With this dashboard aggregation product, we first offered onboarding calls—but, in true product-led fashion, most users wanted to set it up themselves. So we pivoted to getting users to understand the value of the product as early as possible in their self-onboarding journey. How? With product metrics.
For us, the inspiration started when we read Mixpanel’s Guide to Product Metrics. Using that as a foundation, we built out our own frameworks and best practices, operationalized them for measurement, and then optimized along the way.
As we dug into the engagement analysis for the onboarding process for the dashboard aggregation tool, we found some pretty crazy links. The one that stood out the most was that users who added a minimum of three tools to their dashboard were much more likely to keep using the product long-term.
It was a kind of magic number, and we shifted our onboarding experience to drive users to that goal. The activation metric became the correlated retention metric.
This is just one close-to-home example. But you can carry the same concept across nearly any industry and product.
In the end, it comes down to the first value moment your users find on your product. For us, it was that act of adding at least three tools to their dashboard. In other scenarios, it could be:
- For a streaming service: adding three TV shows and movies to a queue
- For a healthcare app: opening a chat with a doctor or therapist
- For a delivery app: making an order within one day of installing the app
- For a cooking site: adding five recipes to a personalized recipe box
- For a mental health app: completing at least three meditations within the first week
Double down on what matters most
Armed with these correlated metrics, you no longer have to cast a wide net for engagement. Instead, you can focus your customer emails, user experience, and even push notification offers toward getting users to take that one specific action.
In other words, after you uncover which events work best to make your customers want to come back for more, you can work on surfacing those events more often and making them more accessible and engaging for users.
Mixpanel’s Signal report feature was the key to taking these steps as a team. The Signal measures the association between a correlation event and a goal event, and it quantifies just how strong of a correlation there is. (For example, you could run “Song Purchased within three days” with “Still Active after three months” to assess just how important those early days are.)
Across the board, user journeys are increasingly digital—and that’s a good thing for product marketers. Instead of having to send out surveys or work with limited, top-level data, you can look at every user’s journey (or at least every cohort’s).
By tracking digital experiences you can build better digital experiences.
So take the time to look at your product analytics and drill down on the metrics that correlate to retention. I couldn’t recommend it higher.
About Corinna Stukan
Corinna is a product leader, a writer, and a speaker at global product conferences. Over the last seven years, she has led a wide range of B2B and B2C products and projects across APAC, Europe, and the US—including building the Product Management practice and team at Roam Digital from scratch. Originally from Germany with a development and UX design background, her passion is helping organizations work better with product analytics and metrics. Check out her newsletter at productandsystems.com, and keep an eye out for her ebook on becoming more insights driven, launching soon!