How to measure and improve user retention – LogRocket Blog

As a UX designer, your primary focus is crafting solutions that empower users to achieve their goals. However, determining if your designs meet and exceed customer expectations requires data, not guesswork or the whims of HIPPOs. This data will empower you to make data-driven decisions that directly improve the user experience and keep your customers happy.

Tracking key metrics like user retention provides a reliable and objective way to measure the impact of your work on the overall growth and success of digital products. In this article, we’ll talk about what user retention is, how to measure it, and how to improve it.

What is user retention?

User retention is a measure of how many users retain (aka continue using) your product over time. In other words, it reflects on the ability of a company to keep its users engaged and using its products or services. Usually, user retention is measured as a percentage. The higher the user retention rate, the better.

In the context of UX design, user retention refers to the ability of a website, app, or product to keep users engaged and coming back for more. User retention is a critical metric for any digital product because it directly reflects the success of your efforts in designing a great user experience and creating happy customers.

Who should own retention metrics?

I know what you’re thinking — is user retention a UX designer’s responsibility? Is this the work of a UX designer or even a UX team? Shouldn’t this responsibility fall with the product manager?

Here’s what you should know — high-performing UX teams are empowered by data.

While it might have traditionally been the case that product managers are responsible for owning metrics like user retention, we are increasingly seeing that the best UX teams have data at their fingertips.

Why is user retention important in UX design?

Here’s a breakdown of why user retention is an important area of focus for UX designers:

1. Contributes to long-term success and sustainability

A product with high user retention is more likely to be successful in the long run. Existing users contribute to revenue through purchases, subscriptions, or in-app activities. They also become brand advocates through positive word-of-mouth.

2. Reduces acquisition costs

The cost of acquiring a new customer is typically higher than the cost of retaining an existing customer. Essentially, it’s almost always more expensive to acquire new users than to keep existing ones using your product. So, by focusing on user retention, UX designers help reduce expenditure on resources needed for constant user acquisition campaigns.

3. Boosts brand loyalty

User retention goes beyond what happens after a customer has gone through the customer acquisition funnel and extends the value a user brings beyond the initial purchase or conversion. It focuses on building a long-term relationship with the user.

By creating a product that is not only useful but also enjoyable and engaging, UX designers can encourage users to return and explore more features, discover new value propositions, and potentially become loyal brand advocates. This extended user journey creates a deeper connection with the product and, ideally, increases the lifetime value a user brings to the business.

4. Increases customer lifetime value

Long-term engaged customers have been proven to have an increased customer lifetime value (CLV) as retained customers are more likely to make repeat purchases, subscribe for longer periods, or recommend the product to others. This translates to a higher overall value that each customer brings to the business.

5. Provides valuable user data to aid decision making

Retained and engaged users continue to interact with a product or service over a longer period of time, which offers a great source of valuable data and insights on their behavior and preferences.

These longtime users are also more likely than new customers to provide product feedback that could greatly improve the business’ offerings through data-driven decisions. This will further enhance the user experience for all customers.

How to measure and track user retention

If you ever feel like you’re pouring your heart and soul into designing a fantastic user experience but the results just aren’t clicking, the answers to your problems are in your retention data.

As a UX designer, understanding how well users are sticking around — and when they’re dropping off — takes you from average to astounding. Tracking user retention will help you identify pain points throughout the user journey, from onboarding struggles to post-transaction frustrations. This retention data will empower you to make targeted improvements that’ll have a major impact on your company’s bottom line.

We’ll now break down the key retention metrics you should have at your fingertips, along with practical tips to track them effectively.

The core retention metrics you should be tracking are:

Cohort retention rate

This metric tracks the percentage of users who remain active after a specific period following their initial signup. By analyzing cohorts based on signup date, you’ve taken a giant step towards identifying trends in their behavior. This will also provide valuable data that pinpoints where users might be dropping off.

For example, a significant drop in retention for a cohort a month after signup might indicate issues with onboarding or initial value proposition.

Tip: most analytics platforms will allow you to segment user data by signup date. Set up automated reports to track cohort retention rates at regular intervals (e.g., weekly, monthly).

Customer lifetime value

If you want to go beyond simply counting returning users to understanding how much revenue your business makes from them, this is the way to go. CLV estimates the total revenue a user generates for your business over their entire relationship. A high CLV is a strong indicator of a loyal and highly retained user base that consistently engages with your product or service.

Tip: calculating CLV can involve more complex formulas, but there are simplified versions available. Start by estimating average revenue per user (ARPU) and average user lifespan. Multiply these two numbers to get a baseline CLV. With more data, you can refine this formula to factor in other important data like user acquisition costs and churn rate.

Other engagement metrics to track include

These are some sub-metrics that you should keep an eye on that all tie back to retention. Let’s go over a few of them below.

Session length and frequency

While retention rate tells you how many users come back, tracking and analyzing your session length and frequency will offer great insights into how your users interact with your product. For some products like a TV streaming site, a declining average session length or decreasing session frequency could signal waning user interest.

Keeping track of these metrics alongside retention data gives you the tools you need to identify features or functionalities that might be leading to user disengagement.

Tip: go beyond just averaging your metrics. Analyze distributions to see if a small group of highly engaged users is skewing the data. A lot of the time, you can identify trends and patterns in user behavior — for instance, are there specific times of day or days of the week when engagement drops? This is something you’ll need to take into account.

Feature adoption

Tracking which features users engage with is a fantastic way to reveal areas for improvement or highlight underutilized functionalities. A low adoption rate for a core feature might indicate a usability issue or a need for better user education or even to improve information architecture — perhaps customers just can’t find this feature.

Tip: make use of heatmaps and session replay tools to see how users interact with these features. This can reveal confusing interfaces, bugs or navigation elements that might be hindering user engagement.

Bonus tips for tracking your retention metrics

First and foremost, don’t just fall into the trap of collecting this data — it’s only valuable if you actually use it to inform your design decisions. If you’re able to consistently track these metrics over time and across different user segments, you’ll be equipped to pinpoint areas where poor user experience or other technical issues might be causing users to churn.

Adopting this data-driven approach will also allow you to prioritize improvements that directly impact user retention. So, the next time you’re meeting with your team, you’ll be able to put forth retention data that’ll help with prioritizing your product roadmap.

Next, work with your data analysts to build a user retention dashboard to bring your key user retention to life and so that you don’t get lost in spreadsheets! The dashboard should contain charts and graphs that track trends over time, compare user segments, and identify areas needing attention. This provides a centralized view, making retention data readily accessible for the entire team.

Further, communicate retention insights regularly. Knowledge is power, but only if it’s shared. You need to share your findings with the entire product team. A collaborative approach that considers user research, analytics data, and business goals will lead to the most effective solutions for improving user retention. You can do this by scheduling periodic meetings to review user retention data with relevant teams, including marketing, product development, and customer support.

Lastly, be aware of the impact of technical glitches on user retention as technical issues can be silent churn killers. It’s important to monitor your retention data alongside periods of reported technical glitches or bugs. This can reveal correlations and help you prioritize fixing technical issues that might be causing users to abandon ship. You can also minimize user frustration and improve overall product satisfaction by addressing these issues promptly.

Strategies to improve user retention (with examples)

Now that we’ve covered how to measure and track retention, we’ll go a step further. Beyond simply tracking the metric, what can you do to actively retain users and foster long-term engagement?

High user retention is the holy grail for any digital product. But the strategies needed to retain users will differ depending on where your product is in its lifecycle. Here’s a roadmap packed with actionable strategies, along with practical examples and real case studies, to keep users engaged across every stage:

Early stage (user acquisition and activation)

First impressions matter, so you’re going to want to keep a few things in mind during the early stage of a user journey.

Prioritize a seamless onboarding experience

It’s essential to design a clear, concise onboarding process that guides users through the product’s core value proposition and equips them with the knowledge to get started quickly. Think interactive tutorials, tooltips, and step-by-step walkthroughs.

For example, Robinhood uses a gamified onboarding process that introduces users to basic investing concepts through interactive challenges. This approach makes learning engaging and reduces the barrier to entry for new users.

Address friction points early

It’s important to identify and eliminate any obstacles that might prevent users from completing key actions during onboarding. Use user testing and funnel analytics tools, like LogRocket, to pinpoint pain points and iterate on the onboarding flow to ensure a smooth as silk user experience.

For example, Duolingo initially required users to create an account before accessing any lessons. User testing revealed this step as a significant barrier to entry, so by allowing users to start basic lessons without an account and requiring signup later, Duolingo has significantly reduced onboarding friction and boosted user activation rates.

Respond to user feedback

Listen to what your users are saying! You have to actively solicit feedback through surveys, user interviews, or in-app feedback mechanisms. This demonstrates that you value user input by addressing their concerns and implementing user-requested improvements.

For example, USAA, the financial services company known for its exceptional customer service, actively solicits user feedback through surveys and social media channels. They use this feedback to continuously improve their mobile app and online banking experience, ensuring user satisfaction remains high.

Mid-stage (retention and growth)

In this stage, you want to focus on two things: delivering ongoing value and personalizing the user journey.

Deliver ongoing value

Don’t let the initial excitement fade, or at least don’t give it a chance to. Continuously provide users with fresh value through new features, content updates, or exclusive benefits. A commitment to ongoing product development keeps users engaged and coming back for more.

Amazon Prime is a great example of this strategy. Beyond its core ecommerce offering, Prime membership unlocks additional benefits like free music streaming, exclusive discounts, and faster delivery. This creates a compelling value proposition that keeps users engaged within the Amazon ecosystem.

Personalize the user journey

Leverage user data and analytics to personalize the user experience. Tailored recommendations, content suggestions, and in-app messages make users feel valued and increase the likelihood of continued engagement in a big way.

For example, Netflix personalizes content recommendations for each user based on their viewing history and preferences. This not only saves users time searching for content but also keeps them engaged by surfacing shows they’re likely to enjoy based on the data Netflix has about them.

Late stage (maturity and decline)

The last stage is maturity and decline, and it’s important to develop strategies in this area too. These can make or break your user retention altogether!

Cultivate community

Foster a sense of community around your product. Create online forums, user groups, or social media channels where users can connect, share experiences, and provide feedback. A thriving community is a sure strategy to create user loyalty as it extends the product experience beyond the individual user.

For example, Apple does this extremely well. In fact, it’s known for its passionate user base and has a strong online community through user forums and developer conferences. This sense of community keeps users loyal and, more importantly, keeps Apple products top-of-mind even as new technologies emerge.

Reward loyalty, no matter how little

Show your appreciation for your most engaged users. Implement a loyalty program, offer exclusive discounts, or provide early access to new features. Recognizing and rewarding loyal users strengthens their connection to your product and incentivizes continued engagement.

For example, Hilton Honors, the Hilton Hotel loyalty program, rewards frequent guests with points redeemable for free nights, room upgrades, and exclusive experiences. This program incentivizes repeat stays and strengthens customer loyalty to the Hilton brand.

Make it easy to come back

Lastly, don’t let users forget about you. Make use of strategic email marketing campaigns or push notifications to re-engage dormant users. This is a good chance to remind them of the value your product offers and gently nudge them back into the user journey.

A company that does this well is Spotify. It sends personalized emails to dormant users with curated playlists based on their listening history. This approach rekindles user interest and encourages them to return to the platform.

Final words

It’s now time for you to go forth and conquer those pesky retention metrics by tailoring these strategies toward your user retention efforts. A final point to remember is that user retention is a continuous and iterative process. Be sure to regularly analyze your data, adapt your strategies flexibly, and keep the user at the heart of everything you do.

Making this commitment to user-centricity will ensure your product thrives and continues on with a loyal user base.