Every one of us who works in software, UX design, and product leadership faces the same core question:

__What is the best way to retain customers and users?__

How do we keep users engaged with our software products? How do we nurture a positive long-term relationship with our customers?

When we successfully retain users everybody wins. We earn bigger budgets for our teams, the company delivers stronger business results, and users are happier. They choose us as the tool they want to use - and the brand they trust - to deliver meaningful experiences in their life and work.

But we also struggle with the same core problem - most software fails to retain users.

In a three-part series of blog posts, we’ll break down the problem of user retention and give you guidance on how to start installing solutions that work.
  Part 1: Why User Retention (and Abandonment) Matters
  Part 2: Why User Abandonment Happens
  Part 3: How to Improve User Retention and Reduce User Churn

We’ll cover user retention at a variety of levels, including high-level concepts and strategies to always keep in mind, nuanced and specific tactics that we’ve seen work for our clients, and lessons that can be learned from beyond the world of SaaS and software products.

Join us for a ride on the user retention rollercoaster!

# Why User Retention (and Abandonment) Matters

If there’s one stat that neatly sums up the challenge we all face in user retention, it’s got to be this one:

__The average software application loses around 77% of daily active users within the first three days.__

In other words, more than three-quarters of your users will be gone within the first several days of trying your app. That means you have one of two options:
__Option 1:__ Attract a ton of new users every three days.
__Option 2:__ Make a great impression and start building trust from Day 1.

We probably don’t have to tell you that Option 2 is much more cost-effective and delivers stronger ROI over the long haul than Option 1.

Here’s what’s at stake in user retention and why trust and confidence are your best weapons against user abandonment.

#### The One-Week Rule

For most software products, it makes sense to measure user retention based on weekly rates. How many users over a one-week period come back to use your product or service?

This might change based on the type of product or service you’re offering. Some apps are meant to be used daily, some specialized apps are used less frequently, but most need a weekly cycle of returning users to survive.

This means, when thinking about new users who are trying your product for the first time, you have about a week (max) to win them over by delivering value that will turn them into long-term loyal customers, or they’ll go somewhere else to find that value.

If you happen to have a product or service that is so specialized it’s cornered the market for a specific need, you might be retaining users because you’re the only game in town. But you can’t get too comfortable because that’s not likely to last forever.

There might be barriers today that keep users from abandoning your product. But, all things being equal, they’ll disappear quickly the first time a better option comes along if you’re not delivering real value to them.

Over the last two decades, we’ve seen that it’s getting easier and easier for users to migrate to a better experience. That’s only going to increase in speed, which means we need to be prepared to deliver great product experiences for users from the start.

#### The Pains of User Abandonment

The dark side of user retention is user abandonment. If you don’t deliver value and meaning to users in the first few experiences, you’re going to see your abandonment rates skyrocket.

User abandonment rates carry serious consequences. Here are just a few of them.

##### User Abandonment Increases Customer Acquisition Costs (CAC)

You need a certain number of active users to make money for the business and keep your market share. High user abandonment rates put an unfair strain on marketing to pull in more potential customers.

When you as a product leader aren’t able to pay off your marketing efforts with a delightful and meaningful user experience, you’re essentially burning money on customer acquisition costs (CAC).

CAC is usually calculated by dividing your sales and marketing costs by the number of customers acquired. For a more accurate measurement in the world of software products, we believe it’s important to think not just of the customers you’ve acquired, but of the customers you’ve retained.

Abandonment is a hole at the bottom of your bucket, leaking users and customers while marketing spends more money to keep the bucket full.

##### User Abandonment Decreases Customer Lifetime Value (CLV)

Rising customer acquisition costs also eat away at your customer lifetime value (CLV). But you’re not only losing the lifetime value of your customer. You’re also losing the lifetime value of your product and brand.

For every user who leaves, you lose potential revenue growth. This is especially true now that the bottom line for many products is driven by in-app purchases and other add-on services.

When a user abandons your product, you’ve lost not only the cost to get them into your product in the first place, but the potential added value of everything they might have bought if they stayed with you longer.

We see the impact of this in healthcare. Patient confidence is an important element of user and customer retention in healthcare, but it’s also about access to added services and bundled benefits. When people can get more personalized services, they’re more likely to stay with their healthcare provider longer. That can add tremendous value for both the customer and the business.

Of course, B2B or SaaS products are also increasingly bundling their products and services. You might acquire a customer for one service and develop more services and products for them over time. If you gain their confidence, you can start to show them the other ways that you can deliver more value with new offerings.

##### User Abandonment Eats Away at Your Budget

We’ve had a lot of clients come to us after realizing just how much they’ve wasted in resources and lost revenue trying to fill the hole of high user abandonment rates.

It’s not just the marketing dollars lost to refilling the pipeline. It’s also the time and internal resources they’re investing in building the wrong solutions to the problem.

We’ve worked with clients who tried to throw development resources at quick fixes and gimmicks designed to plug the holes and pull users back into their product. They lost focus on what really matters - solving core problems for their users.

Often, the answer is not to throw more developers or features at a problem. It’s to tighten up and shorten the experience to focus on the things that really matter to users. If you build a better experience, you’ll retain and grow a higher percentage of new users. But you have to know how to allocate your resources effectively to do that.

When people work with a great product or service and love it, they refer it to a friend or colleague. That creates its own growth engine through a higher reputation and quality of the product itself. Product-led growth is going to be more financially viable in the long run than short-term fixes to slow your abandonment rate.

##### User Abandonment Undercuts Brand Reputation

User abandonment is not just a measure of your ability to deliver value to users over the short term. Your long-term reputation is ultimately at stake.

As more people are exposed to something with your name on it that doesn’t work, they lose confidence that you can deliver anything they need and you lose ground on your brand reputation.

It all goes back to the original stat at the beginning of this post. People don’t return to products they don’t need. To build trust, you need to deliver great experiences that give users reasons to come back.

It also works the other way around. If you build a lot of trust and create meaningful experiences, you get a lot of leeway and space for making mistakes. Nobody is perfect. You will trip up and create something that doesn’t meet expectations. As long as you’ve built up trust you’ll have a chance to recover and get back to delivering value.

#### The Path Out of Abandonment

If you’re not focused on how you can retain users, you’re not paying attention to one of the most important drivers of revenue growth and business success. The key to lowering user abandonment and raising user retention is investing in solutions that address core problems for your users and customers.

You can’t just throw more development resources at the problem. You need a trusted advisor who has counseled hundreds of clients over more than 20 years. In our next post, we’ll talk about the core factors behind user abandonment and what causes users to leave your product and never come back.

In the meantime, if you want to discuss how to address your own user abandonment issues, [get in touch](https://www.drawbackwards.com/contact "Get In Touch") and let’s start a conversation. 

Combating User Churn in Software Products

Combating User Churn: Why User Retention Matters 

Every one of us who works in software, UX design, and product leadership faces the same core question:

__What is the best way to retain customers and users?__

This is the second post in a three-part series breaking down the problem of user retention and giving you guidance on how to start installing solutions that work.

[Part 1: Why User Retention (and Abandonment) Matters](https://www.drawbackwards.com/blog/combating-user-churn-in-software-products-part-1 "Part 1: Why User Retention (and Abandonment) Matters")
__Part 2: Why User Abandonment Happens__
Part 3: How to Improve User Retention and Reduce User Churn

# Why User Abandonment Happens

In order to understand how to retain users, you first have to understand why they might abandon your product or service. Here are the two core reasons that users often leave and never come back.

## Users Abandon You Because You Abandon Them

Give users what they want. That seems simple enough, right? But so many teams start with that intention and still end up building what the business wants, not what users want. They’re so focused on delivering business results that they fail to see the problem from their users’ point of view.

The real simple truth is that when you forget about your users and their goals, they’ll abandon you. The main purpose of your product is to solve problems for users. Over time, it's easy to fall into the trap of prioritizing your needs over theirs. It can become death by a thousand cuts.

Sometimes the abandonment happens early. Take free trial experiences as an example. Free trials are a great way to give users a taste of your product and encourage them to become customers. But we’ve seen too many free trials collapse into fractured and disjointed experiences that fail to convert customers.

There are usually two reasons for this. First, many free trials fail to give users a fully guided introduction to the product and its features. You can’t just throw new users into the deep end. You need to show them how your product can help them solve specific problems and complete distinct tasks. 

The second problem with most free trials is they don’t help users across the finish line to become fully paid customers. You undercut the entire purpose of a free trial when you make it difficult for users to navigate your billing process or you don’t give them clear and concise purchasing options. We’ve seen teams dedicate full-time resources to just tracking down free trial users to get their payment information so they can coplete the transaction.
The gaps most often happen because the left hand doesn’t know what the right hand is doing. The marketing site promises one thing and the free trial experience delivers another. The product team has its focus on building new features for the full product and doesn’t have the bandwidth to build guided free trial experiences or a strong bridge to the billing system.

Fortunately, these gaps can be solved. It just requires that your teams continuously look at the journey through the eyes of the user. Abandonment occurs because we’ve lost sight of where users are, what they’re seeing, and what they want.

By stitching together the silos in your own organization, you can help ensure that you’re not abandoning your users and giving them a reason to abandon you.

## People Leave When They Don’t Get What They Want

Here’s one of the biggest red flags of all. When you hear your support reps constantly say, “Let me show you where that is.” 

Part of what makes a product great is the feeling that everything is in the right place at the right time. It’s easy to settle for just getting features built and out the door. That can be hard enough. It takes extra time and effort to give users what they want when they want it. But it pays off in the long run through greater user retention.

In order to give users what they want, you have to think like they think. You need to allow them to easily find what they need. You need to put features and tools where they expect to find them, not just where you think they should go.

When we see core features buried one, two, or three clicks deep we immediately know that there are some fundamental issues we need to address in a client’s development and design process. The team isn’t focused on the key interactions that the user needs to do and in the way that they want to do it. 

Ask yourself, are you designing a bunch of individual features or are you designing a solution to a problem? When you set out to help people get a job done and solve a problem, you’re more likely to provide features that help them get what they want.

## Other Reasons for User and Customer Abandonment

We’ve seen a lot in more than 20 years of helping clients build meaningful and delightful products. Here are some of the recurring themes that help explain user abandonment.

### Lack of Engagement
The biggest differentiator between you and your competition - and the key to keeping users and customers engaged - often comes down to how well you understand your user. 

If your content, product, or service isn’t compelling enough, you might find that you’re becoming a “me-too” offering. You don’t have any compelling value outside of what everybody else is doing. 

Many industries have little room to offer truly unique services. In financial services, for instance, often the best customer experience wins. Traditionally, this was done by throwing more human interactions at customers and giving them personalized attention that way. But that’s an extremely expensive approach.

A modern approach to engagement takes all the questions and interactions and brings them into an interface that presents the right answers at the right time when users need it. That’s different than just listing a bunch of services on a screen.

All too often, business leaders see UX/UI design as a place to store things. That mindset won’t generate the level of user engagement that you want. The perspective that wins is the one that asks, “How can I meet my customers’ needs where they are and when they need it, then design for that outcome?”

### Poor Onboarding

Onboarding encompasses everything that happens the first time users interact with your product. It’s a critical moment because it sets the tone for everything else that follows and it often determines if customers will stick with your product or abandon it.

Free trials, as described above, can be a big part of this but it’s also all the little things that can add up to confusing or time-consuming experiences. If users have to search Google to learn how to do something or ask your customer service team for help, they’re likely going to bail for a more intuitive solution.

This happens a lot in modern e-commerce. If you can’t see what you want in an ad, click it, arrive at a payment screen and pay within several clicks then you’re highly likely to never come back. We’re past the days of asking users to fill out long form fields to buy products.

When they’re on their phone in bed late at night after a long day at work, they don’t want to take more than a minute to buy your product or service. They’ll abandon you for a faster and more seamless payment experience.

### Technical Issues

This one gets overlooked a lot. We all know technical issues are big barriers for users but it’s important to state it. We can become blind to how seemingly small things like slow processing, crashes, glitches, or lost data can add up to a terrible user experience.

Basic fundamental functional performance issues, especially as they build up over time, can be deal breakers. People simply won’t return if they have the choice because they don’t trust a product or brand that doesn’t seem to work right.

### Lack of Perceived Value

Finally, the ultimate question you have to ask yourself is, “Does your product actually solve the problem the user is coming to you to help them solve?” If you don’t do it, somebody else will.

You can’t just be functional or usable any more. You have to be at least at the comfortable level of the [design success ladder](https://www.drawbackwards.com/ladder "design success ladder"). Better yet, to create true value, you have to be delivering a delightful experience that assists people and makes their life easier. 

The floor for user experience has gone way up, which means the standards that people use to determine the value of your product has also risen. You have to offer a unique benefit that they actually want and can’t find anywhere else. You have to do the research to know what that is for your user and customer base. 

You have to build confidence through your users’ minds and hearts. They need to feel confident not only in the product but in themselves and their ability to understand how it works. They have to want to use your product and feel joyful when they do.

That’s what creates the delightful and meaningful levels of experience necessary to be competitive in the modern software landscape.

## We Won’t Let Your Users Abandon You
We know how to help teams get the most out of their products. We’ve navigated all kinds of environments across a variety of industries and business models to help teams deliver meaningful experiences that drive real business results.

Along the way, we’ve learned a lot about what pulls users in and what drives them away. Let us show you the way to combat user churn and get more ROI out of your product. [Get in touch](https://www.drawbackwards.com/contact "Get in touch") and let us know more about your vision for the future.


Work

Healthcare

Business to Consumer

Business to Business

Cybersecurity

Financial Services

Energy

Hospitality

Food & Beverage

Combating User Churn in Software Products

Combating User Churn: Why User Retention Matters

Combating User Churn: Why User Abandonment Happens

Combating User Churn in Software Products

Combating User Churn: Why User Retention Matters

Combating User Churn: Why User Abandonment Happens

Get monthly insights on innovation and UX.