Sunday, December 9, 2012

Pay attention to retention

Game Connection 2012 in Paris had a lot of interesting presentations. I sat through most of them and one word kept repeating in almost every presso I saw, retention. Retention rate, churn and duration all measure the same thing: how effective are you at getting users to come back to your game. It really doesnt matter how many downloads you have if the users forget you after first session and move on to the next one. Retention has become `The KPI` for the freemium model.

The gaming audience is widening and snack-type spending pattern (both money and time) keeps getting stronger as social gamers become increasingly comfortable in spending. 6waves showed internal data that suggests that casual gamers have higher retention rate than core gamers. in 30 day period, the retention rate for casual gamers is 20% compared to the 10% of the core gamers. According to flurry, for iOS and Android apps, 24% of customers continue using after three months. After 6 months, this percent shrinks to 14%, and, by 12 months, only 4% are left.

Retention as a KPI is something that every product or service should measure. Customer retention is not achieved by giving the customer what they expect, it’s about exceeding their expectations so that they become loyal advocates for your brand. In a world where every product is a copy of the next one, putting the customer value to the center of business strategy is the key differentiator for companies. Customer retention has a direct impact on profitability too. According to research by John Fleming and Jim Asplund indicates that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers returns a revenue gain of 3.4 times the norm (

If companies would concentrate more on retention than the upper area of the purchase funnel, they would see that the purchase is only the beginning of the customer relationship. Anyone can drive traffic with big enough marketing budget, what makes the customers return is the experience they had while buying and value they get for using the product.

No comments:

Post a Comment