Customer Experience: Expectation and Retention
When a company signs up to use your software, app, or service, it is because they are looking for a solution to a problem. Yet, somewhere along the lines, the customer may stop seeing the value in what your software has to offer. This disconnect is what we refer to as churn.
Out of all the users that sign up for your services, the percentage of them that end up discontinuing their service within a given period is known as the churn rate. The churn rate can determine either the success or failure of your business. It is a metric that you need to be paying close attention to so you can improve your product, increase your retention rate, and grow your revenue.
Many factors can affect churn rate, but one of the main reasons why users churn is poor user experience. In fact, 88% of online consumers are less likely to return to a site after a bad experience. This is why most successful companies understand that to keep their users and stay competitive against their competitors, they need to adopt a human-centered design mindset.
So what can you do to improve user experience? Focus on the things that matter to your users, and measure things that matter to your business.
1. Understand that UX is not UI
One big mistake we see with companies is when they confuse UX (user experience) with UI (user interface).
All too often, companies hire UX designers and focus only on aesthetics. We can’t tell you how many times we’ve heard clients asking to make their product “sleek and sexy.”
When a company focuses only on the look and feel of their application, the result is often a higher churn rate, as this approach rarely takes the user’s needs into consideration. Many companies waste their resources in creating a product that has a pretty interface but doesn’t solve the user’s problem. When a company focuses only on the aesthetics of their application, they are not focusing on what ultimately enhances customer satisfaction and loyalty: user experience.
Focusing on providing a beautiful user interface alone will not translate to a better user experience. Steve Jobs said it best, “Design is how it works.” UI is a powerful tool, and it plays a big role in creating a great user experience, but it’s only part of the equation.
User experience encompasses a much wider range of disciplines and processes than UI. It is not only limited to how usable the product is. UX is also about behaviors, motivations, attitudes, expectations, needs, and constraints.
When designing a product, understanding the distinction between UX and UI can help your product retain users and save an enormous amount of time and resources in the product development cycle.
2. Make a great first impression
After people sign up to use your company’s software or app, it’s important to educate them how to use the product by creating a seamless onboarding experience.
Your users may get confused if you expect them to learn how to use your product by themselves. If they can’t see how your product can solve their problem, or if they are unable to accomplish the desired task, this equates to a poor user experience.
Analytics tools can help your company identify signs of poor user onboarding. If the data shows that a large percentage of users drop off within the first week, it is likely that your onboarding experience needs improvement.
Take Hubspot’s email product, Sidekick, for instance. They were having some serious churn problems when they first created the product. A large percentage of users dropped off after a couple of weeks. Based on data gathered from a survey, they decided to address their problem by improving their user onboarding experience.
It wasn’t an easy process. It took them seven failed experiments and three more experiments to get to the right formula: get the users to send more emails. Sending emails is the primary value of Sidekick. By driving users towards the main value of the product during user onboarding, they were able to create behavior that resulted in long-term retention.
Successful user onboarding is about meeting your users’ expectations. The first step to reducing churn rate is ensuring that your users understand the value of your company’s product immediately after they sign up.
3. Reduce complexity
Another common mistake that often leads to increased churn rate is when a product is more complex than it needs to be. We often see companies try to differentiate their product from their competitors by adding more features in an attempt to increase user engagement.
Adding more features may seem like an easy fix, but this will not solve the original problem; it will only create new problems. Adding extra features without taking the time to talk to your users will only make your product that much more difficult to use. This could result in decreased usage and could eventually make your users churn.
Sometimes, instead of asking, “what features can we add here?”, think about how you can narrow the scope to achieve simplicity and focus on improving the usability of the existing features. Building a great product is rarely about having the most set of features or the most sophisticated process. The goal is to keep complexity out of the equation. Think quality over quantity.
4. Set the right metrics to measure user experience
Setting the right metrics is crucial to the improvement of your product. The right metrics drive the strategy and provide focus to the direction you are heading.
While some metrics are already available, the problem is that most of them can’t accurately tell whether your efforts on improving the user experience are working or not. And if you’re optimizing for the wrong metric, no amount of effort can save you from a high churn rate.
As Google’s UX Researcher, Kerry Roden writes, “Basic traffic metrics (like overall page views or number of unique users) are easy to track and give a good baseline on how your site is doing, but they are often not very useful for evaluating the impact of UX changes. This is because they are very general, and usually don’t relate directly to either the quality of the user experience or the goals of your project — it’s hard to make them actionable.”
To help you choose the right metrics, you can use the HEART Framework and the Goals-Signals-Metrics Process.
The HEART Framework
This framework uses these five categories:
- Happiness: measures user attitudes
Example: satisfaction, perceived ease of use, Net Promoter Score (NPS).
- Engagement: frequency, intensity, or depth of interaction over a given time frame.
Example: number of visits per user per week
- Adoption: new users of a product or feature.
Example: the number of accounts created in the last seven days
- Retention: how many users are still using the product.
Example: churn rate
- Task Success: measures efficiency and effectiveness
Example: time to complete a task, percentage of tasks completed, error rate
The Goals-Signals-Metrics Process
Implement the HEART framework in conjunction with the Goals-Signals-Metrics process., this will help you identify which metrics your company should use,
Identify your goals so you can choose metrics that help you and your team measure progress towards those goals.
Identify signals that indicate your company’s success or failure.
Lastly, create specific metrics that are trackable.
Just remember, do not include all the HEART categories if it doesn’t apply to your product and focus only on the metrics that are relevant to your main goals. This should lead you to better insights about your users.
A high churn rate can be a problem for most startups, but it can also serve as an opportunity to get to know and understand your users better. By focusing on the things that matter to your users and the metrics that support your business goals, you can improve your product’s user experience and reverse your churn rate into a negative.
You've worked hard to acquire your users, now it's time to keep them. Learn more how Primal Loop can help.