👓 Minute Monday 12: Retention problems

What does unbounded usage-based retention look like for your product?

Is your retention flattening at a healthy level (generalising but in PLG bottom-up SaaS, above ~20% for free users or above ~60% for paid users)?

You might also be seeing this in revenue churn, but remember that’s a lagging indicator (so if you aren’t, you likely will see it before too long).

Are you Product A or Product B?

If you’re Product B, you’re likely enjoying life much less (or you’re blissfully oblivious to impending doom).

Product B doesn’t have Product-Market Fit.

There are 3 non-mutually exclusive reasons this might be the case:

1. The product doesn’t have enough value for users in the market to want to return

2. The product isn’t doing a good enough job of connecting users to value

3. You’re acquiring a disproportionately high number of bad-fit users

You can cohort the retention data by acquisition channel to validate #3, and potentially disprove #1, if you find a cohort exhibiting strong retention.

In PLG SaaS, the real problem is usually #1 or #2, and often some combination of them both.

Behavioural and firmographic cohorts can help you hone in and further diagnose.

But until you make your retention curve look more like that of Product A, you need to apply a maniacal focus on this.

All hands on deck.