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When acquiring users isn't enough: retention is the answer bgf2010


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The viral goldrush is over. Customer acquisition (CPA) costs are rising. The solution: use game mechanics to drive retention and engagment.
Here are practical examples and behavioural psychology examples to retain users and drive revenue.

Published in: Business, Technology

When acquiring users isn't enough: retention is the answer bgf2010

  1. 1. Harnessing gameplay to keep them coming back again and again Nicholas Lovell, GAMESbrief
  2. 2. Nicholas Lovell, GAMESbrief  Author, How to Publish a Game  Director, GAMESbrief  Clients include Atari, Channel 4, Channelflip, Firefly, nDreams and Rebellion  @nicholaslovell / @gamesbrief
  3. 3.  I’ll get some visitors  Some who visit will register  Some who register will subscribe  Subscribers will spend an average of £10 per month  I’ll put my Maserati on order 1% convert = £1,000.00 1% convert = £10.00 Say each costs £0.10 Only if the average user stays for 100 months! How most people start
  4. 4. ARM yourself  Hoping for the best is not good enough, you need to ARM yourself  ACQUISITION: How do I get people through the door cost-effectively?  RETENTION: How do I keep people coming back for more?  MONETISATION: How do I build money-making strategies into gameplay  Most developers focus on one of these  All three are really important
  5. 5. The funnel Users Profits
  6. 6. The equations
  7. 7. Why the funnel matters  The funnel matters because it is your entire business  To emphasise that, we need Equation I CPA < LTV = good business CPA > LTV = trouble  Where:  CPA is cost to acquire a user  LTV is the Life Time Value of a user  You can improve your business by decreasing CPA or by increasing LTV
  8. 8. The old Holy Grail: virality  A viral business can be an insanely profitable business  CPA is close to zero, so even if LTV is low, your business is great  Time for Equation II: Viral coefficient = A% x B x C%  Where  A% = Percentage of your users who invite a friend  B = Number of friends they invite  C% = Percentage of friends who accept the invitation  If viral coefficient > 1.3, time to order the Maserati
  9. 9. Viral businesses TRUE FALSE  Virality != spam  Viral businesses add value to their users through virality, not just to themselves  Chasing virality is a fool’s errand; chase retention instead
  10. 10. The new Holy Grail: Retention  Buying customers is expensive  Buying customers is necessary  Pouring customers into a leaky bucket is stupid  Ergo: Retention is the new Holy Grail  And the most forgotten
  11. 11. How to chase retention  Retention is in your control: it is all about gameplay  Ask yourself: How can I make it fun and rewarding to come back every day  Remember that different gamer-types find different things rewarding
  12. 12. Special Offers
  13. 13. Three days in a row
  14. 14. Maintenance
  15. 15. Commitment I
  16. 16. Commitment II
  17. 17. Six social techniques  Social proof  Reciprocity  Commitment / consistency  Authority  Likeability  Scarcity
  18. 18. Read this book
  19. 19. Conclusion  RETENTION is a gameplay issue  Think about game mechanics which can reward, delight and entertain players (while making them come back)  Make the transition from ONE MORE GO to COME BACK TOMORROW