A smartphone user typically has 60-90 apps installed on the device, however, most of the users only interact with 3-5 apps per day. This highlights that driving repeat usage (retention) is as critical, if not more, as getting your app installed by users. While user acquisition can be driven through multiple channels (organic and paid), retention should be baked into the product design itself to drive ROI and avoid a scenario where the business has to pay its advertising partners (such as Google and Facebook) to make the user reopen its app. This is no straightforward task, and we shall explore a few tricks to drive retention in the rest of this article.
One of the gurus on this topic, Nir Eyal has extensively studied and worked on habit-building products. We are big fans of his ‘Hooked Model’ that can be used to build retention into the products and drive repeat usage. This model comprises of 4 techniques – trigger, action, reward, and investment. Let’s take a closer look at each of these.
Trigger: A trigger is the initiator of behavior. It is simply an event that creates desire and encourages the user to take action. Triggers can be external or internal. A great example of effectively using triggers is Instagram. It sends its users push notifications communicating about new posts and stories from their friends/people they follow. This is an example of an external trigger, however, once the behavior of checking Instagram periodically has set in, the user may no longer need the push notifications to open Instagram; instead their FOMO (internal trigger) to check up on what their friends or influencers have posted since they last opened the app takes over and keeps driving repeat usage of Instagram.
Action: An action is any behavior by the user that leads to a perceived gratification and stimulates further action. The easier it is for the user to perform this action, the more likely they will do it. To make it easy for the user to take action, startups need to bring in their usability design capabilities to ensure that users have all the context and ability to perform the required action. A great example of taking action is scrolling your Twitter or Facebook feed or tapping on a video on YouTube’s homepage.
Reward: This technique is self-explanatory and explicitly incentivizes the user to keep reopening the app. Depending on the product, if possible, the reward schedule should be kept variable to keep the user engaged and interested in the product. Nevertheless, this should be done ethically and keeping in view that the product is a facilitator for users and isn’t intended to turn them into lab rats.
Uber has a Reward program where riders are incentivized with points based on the service they use which in turn unlocks various rewards and benefits for the user like discounts, promotions, and wallet credit (Uber Cash).
Investment: Investments are rewards provided by the business to its users that make the product better for them during their next use.
Starbucks gives customers Starship & Rewards after every purchase they can redeem in future purchases.
Startups can leverage the above-described Hooked Model for increasing their user engagement and retention, which as we have mentioned above, is critical to delivering the ROI from their user acquisition efforts and harnessing the full CLTV that can be enabled by their product(s).
If you are a startup founder, or represent a corporation intending to invest in disruptive digital products, and want to take your product to the next level, reach out to us at [email protected]. As Middle East’s largest venture builders, we fund, build & operate high-growth tech ventures from the ground up. We collaborate with budding entrepreneurs and corporations to bridge the gap between market opportunities and solutions by leveraging our expertise and their vision.