Chapter 6

Retention hacks: Insights from publishers, communities, and product companies

Retention isn’t a new problem. It’s a very, very old one.

Brand new customers have been unprofitable for literally decades, requiring that businesses hang on to them for at least 18 months before breaking even.

But retention has gotten worse today as the number of attention alternatives and indirect competitors has exploded.

The New Yorker or Reddit aren’t just competing against The New Yorker or TMZ, but also Twitter and Facebook. Dig deeper, and that means they’re up against people’s family and friends for eyeballs.

That’s no small feat.

So how do publishers or community websites retain customers over the long haul? Especially when they lack features that can provide instant utility in some cases?

How The New Yorker uses mobile apps to increase stickiness

Growth hacking techniques can still apply outside of tech.

Eric Ries’ Three Engines of Growth’ are as relevant here as anywhere else.

A publication needs to be sticky enough to make their money back through ad impressions on repeated site visits and year-long subscription fees.

That’s the only way they start getting in the black to reinvest. Keeping churn low and increasing potential referrals from happy customers increases their viral coefficient.

All of which, in turn, decreases the dollar amount they’d otherwise have to spend to acquire new users.

Like most media properties, The New Yorker has experimented with all different paywall shapes and sizes. A few years ago it was one of the most strict around, allowing the public to read only about 25% of the current weekly edition content.

“The magazine’s old model had ‘long since outlived its conception,’ according to editor David Remnick.

Counterintuitively, they saw a massive increase in subscriptions when they revamped the paywall to allow people to browse old archived stories.

“After introducing metered access — six free stories a month — subscription sign-ups were 85 percent higher than the previous January,” according to a Nieman Lab report. Another report also showed that web traffic was up 25% during the same period.

In other words, a more ‘porous’ paywall gave people greater exposure to the content they were missing, leading to a surge in their own activation sequence.

The New Yorker also dove head-first into mobile and tablet apps to increase stickiness. The ‘flagship’ New Yorker app is admittedly not very good. It’s fine. However, it’s essentially just a repository for their print editions. With a subscription, you can log in, download a previous print edition, and start reading.

If you already subscribe to the Print version, there’s basically no use for the app.

The app’s function is an additional problem. Sure, flipping through it is fairly easy. However, some of their in-depth features might take hardcore readers an hour to read.

Using the app can feel like a fairly big commitment. So they’ve been iterating for years with different ‘bite-sized’ ideas to continue solving stickiness.

For example, in 2015 they tested a new feature that would introduce a “Read Later” option if you couldn’t finish reading an article at that time.

This way, you could receive an email immediately or in the next few days to let you know exactly where you left off (and where to pick up reading again).

Their primary mobile app is also an upgrade on the print edition by introducing interactivity, video, and other frequently updated content.

Back in 2011, they debuted the GOINGS ON app that was focused more on highlighting the local city’s culture.

It took the magazine’s long-standing “Goings On About Town” section, that exclusively featured New York City events, restaurants, bars, movies, nightlife, theater, and more, and made it completely free.

A digital version allows people to scan or search under each category. They can use helpful star review, special callouts for time-sensitive updates, and even maps that leverage a phone’s GPS to direct people to each location listed.

This way, you got not just subscribers but also potential new customers to get in the habit of constantly referring back to the app for new information.

In April of 2016, The New Yorker was at it again with a new ‘Today’ app. This time, the content was updated to show the most popular stories of each day.

NewYorker.com editor Nicholas Thompson told Nieman Labs that “The goal is to get more New Yorker readers coming back every day — and, hopefully, convince more of them to subscribe.”

An onus was placed on quickness. Stories are kept shorter than the magazine’s in-depth features, requiring only a few minutes to finish.

It’s also incredibly minimal. There are a few of the day’s latest stories, with new ones refreshing every few hours. There’s a bookmarking tool to help people save their progress or remember where they left off. And that’s about it.

Except, of course, for a convenient way to subscribe (if you haven’t already). The app taps (pun intended) into Apple Pay to both simplify and expedite mobile purchases.

Some reports say that 84% of people’s mobile time is spent inside an app.

Yet, mobile app retention is pretty abysmal across the board.

Publishers often make the mistake of effectively copying their website into an app (like The New Yorker’s print-style one). As a result, people download it. They might sign up. But they leave, never to return over the next few days.

They’ve already outlived the experience. There’s no compelling reason to return day after day, week after week, month after month.

The New Yorker’s foray into the GOINGS ON and Today apps, along with features designed to pull you back after leaving, show they’re focused on providing sticky experiences to customers designed to retain them as long as possible.

How Reddit’s community reinforces retention

Reddit might be known as “the front page of the internet.” However, in reality, it’s a lot of little communities bound together.

Hitting the front page might net a site tens of thousands of visits. But the magic is inside each of the smaller, individual subreddits.

Subreddits are split up into every interest imaginable. Most legit, some shady.

Each sub-group is designed to help you find other people like you. People who have the same interests or share the same sensibilities.

Reddit’s homepage gets a lot of the attention, but it’s merely a jumping off point. Rather than linger, they want users to jump quickly into their small group of choice.

Inside, gamification is used to create a community-curated news site. The bad stuff languishes in obscurity, while the good stuff rises to the top.

The same meritocratic approach is applied to comments.

Good comments receive more points and thus gain the most visibility. Bad comments fall down by the wayside.

Users can gain influence (or lose it) over time. So while there are moderators, many subreddits are able to police themselves.

Users are also anonymous. That can amplify transparency in the community by allowing people to speak openly on a range of topics (from funny to awful to sexual and more), without fear of retribution. And the self-policing nature of the site makes sure that anonymity doesn’t boil over into abuse.

All of this, together, creates an impassioned community.

The only people participating day after day, turning to Reddit for both news and entertainment, are the zealots crazy enough to stick around. And they won’t hesitate to defend each other, coming down hard on anyone who threatens the community’s overall well being.

Like marketers or others only interacting to promote their own selfish interests.

Unlike Twitter, the point isn’t to broadcast stuff. It’s to engage with the other people. So there are strong network effects, similar to a Facebook or Dropbox, where each additional community member can enhance the overall value for everyone else.

But there’s one final, sneaky reason why Reddit is so addicting.

By now, you’re intimately familiar with Pavlov and his dogs. The Russian physiologist inadvertently stumbled upon ‘conditioning behavior’ when he noted how his dogs expected food, even began salivating, after ringing a bell.

Reddit employs “operant conditioning” on its users (whether intentionally or unintentionally). Just like Pavlov’s dogs, Redditors are conditioned to keep coming back by being rewarded with good, funny, enjoyable stuff.

A “schedule of reinforcement” refers to how behavior is reinforced.

Reddit content, both posts and discussions, can be useless or immature. But it can also help surface jewels from time-to-time.

That invokes a “variable-ratio schedule,” where behavior and responses are reinforced unpredictably at random times.

People keep scrolling and scrolling, just like lab rats being conditioned with food, to continually search for their next ‘payday.’

Sound crazy? It’s not.

A variable-ratio conditioning schedule is also behind one of the most addicting activities on the planet: Gambling.

You keep dropping quarters into the slot machine and keep pounding away at buttons. Results are randomized. Sometimes you get bells and whistles. Other times, you get lights and music.

Either way, you’re still losing money. Slot machines are designed with a certain ‘hold’ percentage, so the only thing guaranteed is that they’re going to pay out less money than they take in over time.

But because results are random, you receive affirmative cues and a payoff seems like it’s always right around the corner. You keep playing, even though you the rules of the game.

Until you lose all your money. Or in the case of Reddit, have to get back to work.

How Toggl targets different customer segments with different plan features

Toggl is a simple time-tracking app.

Sounds easy enough on the surface.

Users can sign-up, hit a button, and track time for various activities.

At least, that’s what the basic plan does. It’s perfect for both freelancers and employees alike. Starting at only $10/month, it’s also affordable for all.

However, that’s not where the money comes from.

One-off user plans are fine. But it would take a lot of them to make a dent. And one person deciding to leave would have zero effect on any others.

That’s why Toggl has introduced add Premium and Enterprise plans targeting big customers. These enhanced plans include features that individual contributors wouldn’t necessarily be interested in, like project profitability reports, which provide measures of team efficiency.

They’ve also added a Toggl Master Program that can help you find productivity experts to fine-tune your set-up or even onboard employees for you. (More on services in the next section.)

The enterprise plan will let you create automatic reminders for employees, so it can gently nudge them to keep tracking (so you don’t have to).

At the end of each period, like the week or month, you can automatically have team and project reports sent to you as well. That allows you to compare aggregate data as apples-to-apples, increasing visibility into individual performance.

So what’s happening here?

Toggl is introducing new features to provide extra utility. But they’re not doing it haphazardly. Instead, these features target different people.

Namely: Business units. Adding entire teams creates a desired network effect. One person can’t leave unless they all leave.

The enterprise-level features also become more valuable with the more people you get using the service. Managers can finally standardize team performance with simple metrics that are compiled and reported automatically.

Just one or two months of data can help managers optimize slack in productivity. They can pinpoint which activities are taking too long, or which provide the highest ROI on time invested.

But that’s not all.

The longer you track results, the more value you get from the tool. Switching down the line can become painful, not to mention, a huge burden.

Moving to another platform at that point would forfeit all the insight you just gained. New tools would have their own reporting methodologies, data points, and workflows. Moving an entire team could mean months of disruption before productivity is normalized again.

Which is why most won’t. At least, not for a very, very long time. For a very, very good reason.

How HubSpot uses services as ‘switching costs’ to prevent churn

HubSpot uses ‘switching costs’ to its benefit.

It’s hard for consumers to switch brands or companies once they’re locked in.

You probably hate your bank, right? But you haven’t left.

Same goes for gym passes, cell phone carriers, and more. Just the thought of trying to cancel and move service is enough to give you a cold sweat.

These companies purposefully make canceling difficult, either with fees or extra hoops to jump through, so that it’s easier to stick around than move.

Anecdotally, one growth hacker talked about how effective it is to force people to call certain numbers or even mail information to the company in order to request a refund.

The vast majority of people simply won’t do it.

Everyone can agree that a lot of these tactics are terrible at the end of the day. However, there is another, less egregious method to leverage the same power.

HubSpot provides marketing automation services. Average deal sizes might range anywhere from $10,000/year and up. The vast majority of their revenue is built on product subscriptions. However, they use additional services to create an ecosystem that’s eventually not worth leaving.

Their services range from video-based certifications to individual consulting and classroom services. These are also all mostly paid, so HubSpot’s able to break even, as opposed to pricey one-on-one product tutorials that are typically thrown in free of charge.

They put on in-person events around the country, along with their annual Inbound conference that attracts tens of thousands of markets to the company’s Boston hometown.

However, this isn’t even the best part.

HubSpot’s product is good. But marketing automation is complex. It takes a ton of work to get started, which means it can take a long time to see that aha moment or utility shine through.

That’s why they require all new customers to go through a one-time onboarding period —AND pay for it, too.

It’s a win-win for the HubSpot. The price is high enough to scare away uncommitted leads.

It gives them enough time to make sure that all customers properly activate before the training wheels are taken off. This high-cost, personalized service is paid for. And it’s paid for up-front, in an annual contract with zero refunds.

By the time someone gets the platform customized to their organization, there is no chance they’re leaving.

All of the lead flows, signup forms, automated workflows, emails, blog posts, landing pages, and historical customer data gets stuck.

Moving all of it, as-is, to another platform simply isn’t feasible.

The switching costs, after investing so much time and money into their product and services, act as a vice grip for years to come.

Customers are OK with temporarily overlooking potential service issues, outdated features, and more. That buys HubSpot time.

Yes, their support and product enhancements are good. But the incredibly high switching costs also helps buy them time before a user would be so displeased that they’d cancel their account.