It is not uncommon when you tell the sales team to bring in more revenue they respond with 

“The product is not good enough as compared to competitors so we are unable to close deals,” or 

“The customer success team is not doing its best to maintain customer satisfaction.”

Honestly, sales folks have a point. Acquiring new customers will eventually become difficult if your retention or user stickiness metric is weak.

For product managers, understanding and improving user stickiness is key to boosting lifetime value, and achieving sustainable business growth.

What Is User Stickiness?

User stickiness refers to how effectively your product retains users over time. It measures the frequency and depth of user engagement, often expressed as a ratio of daily active users (DAU) to monthly active users (MAU):

Stickiness Ratio = (DAU / MAU) x 100

A high stickiness ratio indicates that users find consistent value in your product, making it a staple in their daily lives.

Why Does User Stickiness Matter?

Here are 4 reasons you need:

Retention over acquisition

This is a no-brainer. Retaining an existing user is significantly more cost-effective than acquiring a new one. Beyond cost, retention strengthens the connection between the user and your brand, turning occasional users into habitual ones. 

Engaged users are also more likely to explore additional features, provide valuable feedback, and drive innovation for the product. Moreover, high retention rates validate your product-market fit, showcasing your ability to consistently meet user needs.

Increased Lifetime Value (LTV)

Engaged users are more likely to convert, make repeat purchases, or subscribe to premium features. A strong LTV underscores the financial health of your product and provides the resources needed for scaling. It also opens opportunities for upselling or cross-selling complementary features and products.

Virality and advocacy

Satisfied, engaged users are more likely to recommend your product to others. Word-of-mouth marketing, often driven by sticky users, has a compounding effect, bringing in high-quality leads at minimal cost. These advocates can also serve as beta testers for new features or ambassadors for your brand in larger communities.

Predictable revenue

Sticky users contribute to steady, predictable revenue streams, which is particularly vital for subscription-based models. Reliable revenue forecasting enables better planning, resource allocation, and investment in future innovation. Additionally, a consistent user base reduces the reliance on aggressive acquisition campaigns, which can be costly and unsustainable.

Key Drivers of User Stickiness

1. Value proposition alignment:

Ensure your product’s core value aligns with user needs and solves their pain points effectively.

2. Optimized onboarding flow to realize value quickly:

First impressions matter. A smooth onboarding process ensures users quickly understand and experience your product’s value.

3. Personalization where ever applicable:

Tailor experiences based on user behavior, preferences, and demographics to create a sense of relevance. It can be in terms of communication or their flow or anything.

4. Habit formation:

Leverage principles from behavioral psychology, like triggers, actions, and rewards, to encourage repeat usage.

5. Continuous Improvement:

Regularly collect user feedback and implement changes to keep your product relevant and appealing.

Strategies to Improve User Stickiness

1. Focus on your “Aha” moment

Identify the key moment when users realize your product’s value. Optimize your onboarding flow to guide users to this moment as quickly as possible.

2. Implement gamification

Introduce elements like badges, points, or leaderboards to make your product engaging and rewarding. However, do this after your core functionality is on point.

3. Leverage data analytics

Use analytics to monitor user behavior, identify drop-off points, and optimize the user journey.

Use Iterate AI to set up product data analytics without your developer’s bandwidth. Use Iterate AI to click on actions to create events, get the code it generates verified by your developers and instrument them. Learn more.

4. Offer ongoing education

Provide tutorials, webinars, or content to help users to get more value from your product.

5. Build a community

Foster a sense of belonging by creating forums, user groups, or events where users can connect and share experiences.

Metrics to Track User Stickiness

• Churn rate: Percentage of users who stop using your product over a given time.

• Engagement rate: Frequency of interactions with key features.

• Customer Satisfaction (CSAT) and Net Promoter Score (NPS): Measure user happiness and likelihood of recommending your product.

• Retention cohorts: Analyze behavior patterns of specific user groups over time. Create cohorts that make sense for your business.