How to Measure and Increase Product Stickiness

Introduction

There’s no doubt: in the world of SaaS, understanding how users interact with your product is crucial. Measuring product stickiness is one of the top ingredients of this understanding. Let’s dive into the twists and turns of measuring product stickiness.

What is product stickiness?

Product stickiness refers to the ability of a product or service to retain its users over time and increase their engagement with the product. A "sticky" product is one that creates a strong connection with its users and keeps them coming back to use it again and again.

Product stickiness shows the level of engagement or loyalty that users have with a product. It measures how frequently users return to a product and how often they use its features. 

Why to measure product stickiness?

Product stickiness is an important metric for product teams as it indicates how well a product is meeting the needs of its users and can inform strategies to improve engagement and retention.

By measuring this metric, you can gain valuable insights into how often users are returning to your product and why. It also shows you how well your product is meeting the needs of its users.

A product with high usage stickiness is one that users find valuable and enjoy using, leading them to return to the product time and time again. It leads to higher retention rates and potentially increased revenue.

Conversely, a low usage stickiness score can highlight areas for improvement, such as features that users are not finding useful or a poor overall user experience. 

Benefits of improving product stickiness score

Increased user engagement

A higher usage stickiness score indicates that users are more engaged with the product, which can lead to more feedback, suggestions, and ideas for improvement from users.

Better customer relationships

Users who are loyal to a product are more likely to feel a connection with the brand and the company behind it. This can lead to better relationships with customers and increased loyalty over time.

Reduced churn

A high usage stickiness score can indicate that users are less likely to churn, or stop using the product altogether. This can lead to lower customer acquisition costs and higher lifetime value for each customer.

More efficient product development

By focusing on improving product stickiness, development teams can prioritize their efforts on features that are most important to users. This can lead to a more efficient development process and faster time-to-market for new features.

Competitive advantage

A product with high usage stickiness can be a significant advantage in a competitive market, as users are less likely to switch to a competing product.

Data-driven decision-making

By tracking product stickiness, development teams can make data-driven decisions about which features to improve, remove, or add to the product. This can lead to a more effective product strategy and a better overall user experience.

Risks of focusing on product stickiness

Tunnel vision

Focusing too much on improving usage stickiness may lead to tunnel vision and neglect of other important metrics, such as revenue, customer acquisition, and overall user satisfaction.

Ignoring new features

When you overemphasize efforts to improve product stickiness score, it can result in a reluctance to add new features or changes that may disrupt the existing user experience, even if those changes could ultimately benefit the product.

Over-reliance on data

Relying solely on usage stickiness data without considering other qualitative feedback from users may result in a narrow understanding of the user experience and missed opportunities for improvement.

User burnout

Overemphasizing usage stickiness could lead to a focus on maximizing user engagement at the expense of user fatigue and burnout, ultimately leading to disengagement or churn.

Neglecting other user segments

Focusing only on improving usage stickiness for existing users may neglect other user segments, such as new or potential users, leading to missed opportunities for growth and expansion.

How to measure product stickiness?

Measuring product stickiness can be challenging because it depends on various factors, such as the product type, user behavior, and business goals. However, there are several key metrics that can provide insights into a product's stickiness, including:

1. Retention rate: This metric measures the percentage of users who continue to use a product over time. High retention rates indicate that a product is sticky and has a loyal user base.
2. Frequency of use: The frequency at which users interact with a product can also indicate its stickiness. Products with high usage frequency are more likely to become habitual and therefore, stickier.
3. Time spent on the product: This metric measures how much time users spend on the product during each session or visit. Products that keep users engaged for more extended periods are usually stickier than those with shorter engagement times.
4. User engagement: Engagement metrics, such as the number of interactions, clicks, or shares, can also provide insights into a product's stickiness.
5. Net Promoter Score (NPS): NPS measures customer loyalty by asking users to rate their likelihood of recommending the product to others. High NPS scores indicate that a product is sticky and has a loyal user base.

By combining these metrics, companies can develop a comprehensive understanding of product stickiness and identify opportunities for improvement.

Product stickiness alternatives

Net Promoter Score (NPS)

NPS measures customer loyalty and satisfaction by asking customers how likely they are to recommend the product to others.

Customer Acquisition Cost (CAC)

It tracks the cost of acquiring new customers, which can help companies optimize their marketing and sales strategies.

Churn rate

It measures the rate at which customers stop using the product, which can help companies identify areas for improvement and retention strategies.

Conversion rate

The metric tracks the percentage of users who complete a desired action, such as making a purchase or signing up for a subscription.

Lifetime value (LTV)

It follows the total revenue generated by a customer over the course of their relationship with the company, which can help companies optimize their customer acquisition and retention strategies.

When to choose each metric?

• Net Promoter Score (NPS): Choose NPS when you want to measure customer loyalty and satisfaction, and understand how likely customers are to recommend your product to others.
• Customer Acquisition Cost (CAC): Choose CAC when you want to optimize your marketing and sales strategies, and understand the cost of acquiring new customers.
• Churn rate: Choose churn rate when you want to understand how many customers are leaving your product and why, and identify areas for improvement and retention strategies.
• Conversion rate: Choose conversion rate when you want to optimize your user experience and improve the effectiveness of your sales funnel, by identifying where users are dropping off and improving the user journey.
• Lifetime value (LTV): Choose LTV when you want to understand the value of your customers over time, and optimize your customer acquisition and retention strategies accordingly.
• Product stickiness: Choose product stickiness when you want to measure how often users return to your product and how engaged they are, and identify areas to improve the user experience to increase engagement and retention. It can be particularly useful for SaaS (Software as a Service) and other subscription-based products. 

Summary

Measuring the right metrics, like product stickiness, can provide insights that lead to significant improvements.

Explore the world of software development metrics and compose a set that will work best in your case.