I don’t know you, but I would kill for a bunch of fine sticky notes and post-its, the ones that stay where you put them.
Write down meeting notes, shopping lists, phone numbers, important reminders…
When I’m in a hurry and need to take a quick note, I always opt for post-its; otherwise, it’s 100% certain for me that an ordinary piece of paper will slip away and get lost.
But sticky notes… They feel safe and reliable.
It’s the same with SaaS products, actually.
I install tons of productivity apps, create accounts, and subscribe to different clouds, knowledge management platforms, but I always end up forgetting them and find myself using the same 3-4 products.
Sticky type of products…
Well, if you want to learn how to achieve customer loyalty and what to do to make your product even much stickier, here is our complete guide on product stickiness.
Grab a cup of coffee and be ready to get insights from successful product managers ☕
What Is Product Stickiness?
Product stickiness is a metric that shows how much a product is adopted -and loved- by its users. Don’t forget, if customers find value in your product, they will keep coming back to you.
Came out as a way to predict customer retention rate, the concept was first used by Facebook. Shortly it became a very popular metric to foresee the success of a product among other companies as well.
Stickiness and success… Generally, one doesn’t come without the other. Oh, and the formula? The formula is easy as ABC.
Why Should You Care About It?
We all talk about customer retention, but few of us really know how we can achieve it. The sales team makes calls, the marketing team sends e-mails, the support team answers questions day and night… But you cannot convince or keep a soul in your customer list if your product cannot find a place in its users’ hearts -or lives, less dramatically.
So, the #1 reason to keep an eye on the stickiness ratio is to increase customer retention numbers.
Let’s see what the other reasons are 👇
- Once you learn and improve the features that are important to the users, you can decrease the customer churn rate.
- Keeping the existing customers is actually easier -and cheaper- than acquiring new ones. By focusing on product stickiness, you can build a more loyal customer list and decrease your Customer Acquisition Cost (CAC). No need for extra effort and money to win customers; they will come back to you on their own will.
- Also, if a customer sees the true value of your product and renews their subscription regularly, it means a higher Customer Lifetime Value (LTV).
- A sticky product brings happy customers. And most of the time, they are open to add-ons and upsell opportunities.
- When people love a product/service, they tend to recommend it to others too. Good customer experience means good customer referrals.
Calculating Product Stickiness
You promised everything a SaaS company could ask for, but how do we do it? It’s not just about giving the formula; I hear you say, be a little more specific!
Let’s dive into it, then 🏄♀️
Step 1: Decide on your active user criteria.
We need daily and monthly active user data to calculate stickiness. But first, we need to determine what tasks a user must complete to be considered ‘active’.
While for Spotify, it can be playing a song or creating a new playlist; for Instagram, it can be liking a post, writing a comment, or following a new user.
The important thing here is to put the criteria by considering your services and be inclusive in terms of user motivation. If you restrict your criteria according to a more specific and/or less used feature such as liking a podcast episode, then the numbers might mislead you.
Step 2: Find the most suitable data type and start collecting it.
I know I said you need DAU and MAU numbers. But maybe DAU/MAU is not the most reliable ratio for your product.
Just like active user criteria, the frequency you expect a user to visit your app/website depends on your product and services.
While DAU works perfectly for a communication platform such as WhatsApp, it might be problematic for a rental platform like Airbnb.
In that case, if your DAU numbers fluctuate too much, mostly because your services cannot be used on a daily basis, you can keep track of your Weekly Active Users (WAU).
👉 For other important metrics and KPIs, let’s take you here.
Step 3: Learn how sticky your products are!
After you’ve got the important stats, you can finally make the calculation and find out the product stickiness ratio.
Yet, DAU/MAU results will not give you precise information about the details, such as who churns -or stays- and why 🤔
For that, you need to check other KPIs like Product and Feature Adoption Rates, which show how much a certain feature is loved and used. If you do not know why people prefer your product over others, you won’t know why when they churn as well.
👉 Here is the complete guide to measuring and boosting feature engagement.
6 Ways to Increase the Stickiness of a Product
If you cannot show people the true value of it, product quality doesn’t mean much alone. And trust me, a very high percentage of customers will not have a lot of time to unearth it.
So, in short, we want people to fall in love with our product -at first sight, if possible.
Let’s see how we can earn true loyalty and increase user retention 🥳
#1: Improve the onboarding experience
A good onboarding implementation is like a warm and sincere welcome.
Imagine when you enter a big hotel, they just get your information and complete your check-in. You’re tired after a long drive, but you don’t know where the bar is. You say okay, how about getting a towel and going down to the pool? But then again, no one told you anything how to get the towels… I personally would feel abandoned -less dramatically, unimportant.
We’re in the era of product-led marketing; people do not want to listen to promises but see the service with their own eyes. But many features can go unnoticed if you don’t show what is possible and how to do it.
Successful product teams do not only design functional products but also display them beautifully.
Achieving and improving product stickiness means delivering unique value and engaging experiences that will make users come back to your product. Onboarding helps with the crucial ‘delivering’ part of this process. Whether it’s teaching a product to a new user or promoting new features to a subscriber, no value or experience is useful unless properly delivered.
Emrah Aydın, Product Manager at UserGuiding
#2: Keep everything clear and simple
While additional features bring different types of users with different needs to your product, it might not be a good idea to show all of them at the same time.
Show the essential features and leave the advanced ones to the users.
According to user behaviour theory, users get intimidated when they’re faced with too much information or complexity. The brain perceives them as tasks that must be complete and things get a bit annoying.
If you have a productivity app, categorize your pre-set frames and show them according to the needs of your users. When people think it’s easy to use a product, they keep it in their lives.
#3: Read the collected data closely
It’s relatively easy to collect data, but it doesn’t end there. You need to update your product roadmap and marketing strategies so that all the efforts won’t go to waste.
If people unsubscribe from your mail list, maybe you need to review your email marketing strategies. Or if some of your services aren’t used so often, then it might not be a good idea to invest more in there.
See how many people complete your current onboarding tour or checklist. Don’t forget, the higher the onboarding completion rate, the higher the user conversion rate.
Not all successful and sticky products are born that way; on the contrary, most of them are shaped in the process.
#4: Ask for feedback, make use of surveys
Interact with your customers; otherwise, how will you see the true picture -a.k.a. user experience?
In today’s competitive environment, the ones that can bend according to customer needs and expectations thrive.
So send out user surveys in different phases of the customer journey. Ask their opinions about the onboarding material, their favourite feature of the product, or even the reason behind their decision when they cancel a subscription.
Afterwards, you can lean on the problems and provide better customer service.
#5: Segment your customers and take action accordingly
This time I’m not talking about individualization for a smooth product experience; I’m talking about identifying power users.
You cannot sell add-ons or professional plans to a customer that uses only the core features of an app, and you shouldn’t try to. you need to know your customers so that when they give strong signals, you can act on and offer different plans at the right time.
Likewise, if you know who is about to churn, you can remind yourselves with push notifications, e-mail campaigns, etc.
Nir Eyal was right, the hooks are everywhere! The important thing is to trigger and start them.
If you have various products/services for different purposes/needs, recommend additional products/services to your best customers. Like Adobe, categorize your products and present them as a pack. That way, a beginner photographer won’t try to choose between Lightroom and Photoshop; she will get them both.
#6: Use FOMO
If there’s anything more to improve stickiness, it’s to play to human psychology.
FOMO (fear of missing out) is a common marketing technique that appeals to the desires of users, the desire to take advantage of every opportunity.
A long-time freemium user can be convinced to upgrade their plan to premium if they get a good discount. Or a customer who calls you to switch their plan to a less professional one can be talked into continuing with their current plan.
The important thing here is to propose the right plan at the right time. If you send a push notification offering a special discount for an upgraded plan to a user who has not logged into the application for 1 month, things may not go as planned.
Conclusion
In short, product stickiness is a metric that shows the rate at which your users return to your product regularly and make it a part of their life.
A high stickiness ratio brings high retention rates and, in the end, higher customer lifetime value.
And all you need to do is to keep track of active users on a daily/monthly basis.
Frequently Asked Questions
What is the difference between stickiness and retention?
Retention refers to a company’s ability to get customers to return and actively use its product(s) by applying various marketing and sales techniques.
And stickiness refers to the users’ willingness to use and turn back to a certain product and use it on a regular basis because it is valuable and important to them.
While stickiness drives higher retention rates most of the time, a product that has high retention rates does not have to be a sticky one.
What is a good product stickiness ratio?
Although the good product stickiness ratio changes drastically from industry to industry, 20% and above is considered good for all industries.
The median stickiness ratio of top tiers in the SaaS industry is 28.7%.
