User Retention Rate measures the percentage of users who stay engaged with a product over time, indicating product success, customer satisfaction, and strong product-market fit. For Product Managers, optimising this rate is essential for building loyalty, improving lifetime value, and driving sustainable growth.
Methodology:
- Define user retention,
- Select a cohort,
- Determine the retention period,
- Track user activity,
- Calculate the User Retention rate,
- Analyse and interpret the results,
- Segment and identify trends.
Benefits:
- Indicator of customer satisfaction and product fit,
- Cost-effective growth,
- Valuable feedback for continuous improvement.
Limitations:
- Challenges in identifying causes of churn,
- Variability across user segments,
- Risk of neglecting acquisition and innovation.