The Importance of Good Retention in Product Management

The Importance of Good Retention in Product Management

Retention is a crucial aspect of product management that is often overlooked or misunderstood. It is not just about keeping users engaged; it is the key to scalable growth and the best indicator of product-market fit. High retention drives all the best acquisition strategies and significantly impacts a user's lifetime value.

When it comes to consumer social products, a retention rate of around 25% is considered good, while 45% is considered great. These numbers may vary depending on the industry, but the point remains the same: retention is vital for success. However, understanding what constitutes good retention is not always straightforward.

Many startups fail to achieve good retention rates because the bar for building a massively successful business is high. This is especially true for those just starting out, as they may not have the resources or experience to optimize their retention strategies. In some cases, lower retention rates may be acceptable, such as when the startup is not aiming to build a venture-scale business.

To improve retention, product managers must first understand what it is not. Product management is not about defining the business case or market requirements. Markets don't have requirements; people do. Therefore, product managers must directly engage with their target audience to understand their needs and preferences.

Similarly, product management is not solely about gathering requirements or managing projects. These tasks fall under the realm of project management, which requires a different skill set and mindset. While both roles are essential, they cater to different aspects of product development.

Another misconception is that product management includes product marketing. However, product management is distinct from pricing, promotions, positioning, messaging, product launch activities, online marketing, customer acquisition strategies, and influencer marketing programs. The primary responsibility of a product manager is to discover a product that is useful, usable, and feasible. If they can achieve this, they have done their job effectively.

Now that we have clarified what good retention is and what product management is not, let's explore some actionable advice for improving retention:

• 1. Understand Your Users: Engage directly with your target audience to gain insights into their needs, pain points, and preferences. Use this information to shape your product strategy and prioritize features that will drive retention.

• 2. Build a Seamless User Experience: Invest in creating a user-friendly and intuitive interface that makes it easy for users to navigate and engage with your product. Eliminate any friction points and continually iterate based on user feedback.

• 3. Provide Ongoing Value: Continuously deliver value to your users through regular updates, new features, and personalized experiences. Keep them engaged and excited about your product by addressing their evolving needs and staying ahead of the competition.

In conclusion, good retention is essential for the success and growth of any product. It is a strong indicator of product-market fit and significantly impacts a user's lifetime value. By understanding what retention truly means and implementing actionable strategies, product managers can drive user engagement, satisfaction, and ultimately, business success.