Main Takeaways: - But my active user count is growing, why should I study retention? - Active vs activated users and how they impact churn and retention - Customer retention lifecycle - Cohort definitions, time windows, hypotheses & experiments Take Action

1. Unlock Product Growth & User Engagement
by Microsoft Sr PM
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5. Unlock Product growth and
user engagement by shifting
focus on customer retention
Anshul Rampal, Senior Product Manager @ Microsoft

6. Agenda
• But my active user count is growing, why
should I study retention?
• Active vs Activated users and how they
impact churn and retention
• Customer retention lifecycle
• Cohort Definitions, Time Windows,
Hypotheses & Experiments
• Act

7. But my active user count is growing, why should I study
retention?
• Why Study retention?
• Product growth comes from two sources: acquiring new customers and retaining existing
customers.
• How would our growth change if we systematically improved retention—by 10 percentage
points?
• I thought that is why we did customer development/customer interviews. What is this?!?
• Some useful definitions that will build a strong foundation for retention analysis:
Customers
Activation
Engagement
Time
Churn
Retention
Hypothesis

8. Active vs Activated
State: Potential customer (aka “The Market”)
State: Inactive
State: Short term active
State: Long term active
Event: Acquired
Event: Retained
Event: Activated
LTR
STR
Loss
After 6 months
no activity
After 1 month

9. A time when I was thrown at the deep end
Disparate data sources
No clear telemetry Qualitative Analysis
Quantitative
Partners
Sales/GTM Customers
Share data driven
analysis w/
recommendations
Track - Measure - Report

10. Finding the red
At Microsoft, we define the process of continuously identifying and addressing the
issues that cause customers to leave as “finding the red”:
• Maintain the integrity and privacy of personal information
• Define retention metrics based on meaningful usage and intentional customer
actions
• Carefully select and re-evaluate the time period over which retention should be
measured for your product.
• Define retention based on the customer cohorts for your product
• Prioritize qualitative and quantitative signal to understand the “why”.
• Use end-to-ends to understand scenario health.

11. Possible outcomes from retention study
Improving
the Product
Identifying disengaging user behaviors that are strongly correlated with churn, can help
you find bugs, pain points and rough edges in the user experience that you can go fix to
reduce churn
Messaging Customers that show a high risk of churn can be targeted for promotional content that may
remind them about the benefits of the product or point them toward resources that help
them overcome an issue they are having
One-on-one
Engagements
Enterprise and other high-value customers who show churn risk, can be contacted directly
by account management and customer success professionals who can address their
concerns about the product and help them resolve specific issues they are having.
Targeted
Acquisition
If your churn rate is high, it may be the case that you have not yet achieved
product-market fit, which could be because the wrong kinds of customers are trying your
product and realizing it doesn’t solve their problem.
Pricing If the data indicates that many customers are churning because of poor price-performance,
the product may be overpriced, in which case price adjustment measures are likely to help
reduce churn

12. Thank You!

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