User retention is the scary metric every web analyst, product manager, and marketer is afraid of. I’ve struggled for years to find the magic bullet that will make retention optimization painless.
I still don’t have a quick and easy answer, I’ve come to realise that if you break it down into multiple stages, it becomes a lot easier to tackle.
Reporting retention according to the number of users who have finished onboarding, instead of those who signed up, can make you understand what's the actual issue of the product.
For any SaaS company to grow, two things need to happen: The number of new users needs to increase and the churn rate of existing users needs to decrease.
These two metrics are usually the focus of two specific departments or teams: marketing and the product manager
So where does the onboarding process fit in?
For most B2B apps or software services, onboarding new users usually involves friction even for the best optimized processes.
Things like connecting a social media service or adding a snippet of code on a website, can be a time consuming process, especially for larger companies.
It goes without saying that, until your app starts providing the benefit that it promised on the sales page, you can’t charge for that service.