Thread
1/ Retention is a critical metric for any business.
Entrepreneurs need to be aware of the key factors and benchmarks for success.
A thread on retention strategies and benchmarks for consumer and SaaS businesses. Deets from industry experts. #retention #startups
Entrepreneurs need to be aware of the key factors and benchmarks for success.
A thread on retention strategies and benchmarks for consumer and SaaS businesses. Deets from industry experts. #retention #startups
2/ What is retention? The ability to keep customers using, engaging with, or purchasing from your product/service over time.
@andrewchen says, "Retention is the single most important thing for growth."
High retention leads to long-term growth.
@andrewchen says, "Retention is the single most important thing for growth."
High retention leads to long-term growth.
3/ How to measure retention for consumer businesses?
@a16z suggests that daily active users (DAU) divided by monthly active users (MAU) should be at least 25%.
Facebook maintains a 66% DAU/MAU ratio
@a16z suggests that daily active users (DAU) divided by monthly active users (MAU) should be at least 25%.
Facebook maintains a 66% DAU/MAU ratio
4/ How to measure retention for SaaS businesses?
@ttunguz states that a net dollar retention of 100%+ is considered strong.
Slack has a net dollar retention rate of 140%
@ttunguz states that a net dollar retention of 100%+ is considered strong.
Slack has a net dollar retention rate of 140%
5/ @DavidSacks emphasizes the importance of targeting the right customer segment.
"Your target market should be big enough to matter but specific enough to allow you to develop a tailored value proposition."
This impacts retention by ensuring a strong product fit.
"Your target market should be big enough to matter but specific enough to allow you to develop a tailored value proposition."
This impacts retention by ensuring a strong product fit.
6/ So, how can entrepreneurs improve retention?
@lennysan suggests focusing on these three elements: product quality, onboarding experience, and customer engagement.
- Ensure your product solves a pain point
- Make onboarding smooth
- Engage users frequently
@lennysan suggests focusing on these three elements: product quality, onboarding experience, and customer engagement.
- Ensure your product solves a pain point
- Make onboarding smooth
- Engage users frequently
7/ @BostonVC believes in the power of "negative churn."
Upselling and cross-selling existing customers helps you achieve revenue growth... even if you lose some customers.
Dropbox has a negative churn rate - their revenue growth outpaces churn.
Upselling and cross-selling existing customers helps you achieve revenue growth... even if you lose some customers.
Dropbox has a negative churn rate - their revenue growth outpaces churn.
8/ @jasonlk says, "Customer success is where 90% of the revenue is."
For SaaS companies, investing in customer success teams can drastically improve retention.
HubSpot has a strong customer success team, leading to a high net dollar retention rate.
For SaaS companies, investing in customer success teams can drastically improve retention.
HubSpot has a strong customer success team, leading to a high net dollar retention rate.
9/ @chrija reminds us not to overlook small customers.
"Don't ignore the long tail, as it can turn into a significant part of your revenue over time."
Create a strong foundation for growth and retention.
"Don't ignore the long tail, as it can turn into a significant part of your revenue over time."
Create a strong foundation for growth and retention.
10/ @firstround suggests learning from customer feedback.
"Talk to churned customers, understand their reasons for leaving, and iterate on your product."
Regular feedback loops help you identify issues and improve retention.
"Talk to churned customers, understand their reasons for leaving, and iterate on your product."
Regular feedback loops help you identify issues and improve retention.
Entrepreneurs need to prioritize retention to ensure long-term success.
By understanding industry benchmarks, targeting the right customers, and investing in product quality, onboarding, and customer success, you can build a business that thrives.
By understanding industry benchmarks, targeting the right customers, and investing in product quality, onboarding, and customer success, you can build a business that thrives.
Are you an entrepreneur looking for advice?
Follow @useintro if you want to build a successful company.
Follow @useintro if you want to build a successful company.
