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A common question we receive is – it’s all very well to say “work on retention” and “improve retention.” 

But how exactly do you do this? How exactly do you improve retention?

Yes, each product is different – and while there is no one-size-fits-all solution, one direction that you could explore to improve your retention would be to look for ways to sacrifice monetization for retention – or in other words, look for ways to reduce your short-term monetization to improve your long-term retention.

A good way to understand this could be to look at this via an example of a word game that I worked on a while ago. This was a crossword game with daily content – it offered users 1 crossword per day – in some ways similar to a traditional newspaper that had a daily crossword.

Users would receive 1 puzzle a day.Users started with a certain number of coins – and spent 10 coins a day on each day’s puzzle. Our original hypothesis was that by the time the users ran out of coins, they would be hooked to the game and be willing to spend on IAPs to play more.

Unfortunately, when users ran out of coins, they’d give up and leave the app altogether. There would be a huge dropoff in retention – because users had to pay to play at that point. This made the app economically unviable,

This was a problem – the users were not getting hooked by the time we were hitting them with a paywall.

At this point, we considered a few options:

    – giving them more coins to start – maybe they weren’t getting enough time to get. So more coins would give them a chance to become more ‘hooked’ to the game before they’d have to pay.

OR

    – making the daily puzzles free and monetizing primarily via ads.

We were not sure if the first option would work well – if users were not hooked in a week, maybe they wouldn’t get hooked in 2 weeks or 3 weeks. Besides, if we looked at our analogy of our crossword puzzles being similar to daily newspaper puzzles, users were expecting to get their puzzles free every day – almost automatically with no friction.

So: we did the latter – to make the daily puzzles free, to sacrifice monetization for retention – with the hypothesis that if we monetized our retaining users via ads, they would perceive the puzzles to be free(again, much like a conventional newspaper that is ads subsidized) and if they retain strongly long term, they would monetize much more strongly over the long term.

We expected IAP monetization to drop massively – but curiously, the drop wasn’t huge – because users were still using coins to buy archived puzzles and themed puzzles- because they saw these as ‘bonuses’ over and above the daily puzzles. So while they perceived the daily puzzles as free, they perceived the specials and archive puzzles as ‘bonuses’ that they were willing to pay for.

The retention gains were huge – because the daily puzzles were completely free(as compared to having a paywall earlier). More importantly, our longer term retention stayed strong too – ie: we saw very little dropoff after d14 as we went to d30, d60, and beyond to d365.

This of course was the retention improvement we talked about in one of our earlier episodes – How PuzzleSocial Grew UA spend from zero to $1.5mm per month. And as that title indicates, that was the kind of unit economics and spend that this retention improvement was able to unlock.

So: when you’re looking at retention improvements, one key prompt or question you can ask yourself is: how can I trade off short term monetization for long term retention?

A REQUEST BEFORE YOU GO

I have a very important favor to ask, which as those of you who know me know I don’t do often. If you get any pleasure or inspiration from this episode, could you PLEASE leave a review on your favorite podcasting platform – be it iTunes, Overcast, Spotify or wherever you get your podcast fix. This podcast is very much a labor of love – and each episode takes many many hours to put together. When you write a review, it will not only be a great deal of encouragement to us, but it will also support getting the word out about the Mobile User Acquisition Show.

Constructive criticism and suggestions for improvement are welcome, whether on podcasting platforms – or by email to shamanth at rocketshiphq.com. We read all reviews & I want to make this podcast better.

Thank you – and I look forward to seeing you with the next episode!