Despite the fact that retention is key for SaaS and mobile growth, there’s very little consensus on the factors that indicate good retention. Should you base retention rates on subscription renewal, the number of logins, recurring revenue, or something else entirely? With all the different use cases and opinions out there, it can be tricky to discern what matters for your product.
Amidst all the noise, here’s the important thing to remember: use a leading indicator to measure retention. In other words, pick a retention metric—like in-app activity—that helps you predict who’s likely to stop using your product and who’s likely to stick around. With a leading indicator, you can build intervention strategies that help you increase your retention rate. While calculating retention rate using trailing indicators—like subscription renewal or revenue—can be useful for pitch decks and financial projections, it’s not very actionable. Once a user has churned, they’re gone. You can’t go back in time and make them stay…
