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User retention: Why depending on notification-driven retention sucks

User retention: Sending lots of e-mail to your visitors = Push notifications
When it comes to getting your users back onto your site, you have several options:
  • They love your site so much that they come back themselves (direct-navigation)
  • They see or get a link from a friend or a source while they are browsing (reacquisition)
  • You send them a notification, like a friend-add, a newsletter, a list of top videos, or similar 
The first I'll define as "pull," where the user is pulling you. The last one I'll define as "push," where you have to push the user to come back to the site. The middle one (and alternate scenarios), are basically in-betweens.

The case where the user navigates to your domain to come back is great. It means that you've built a brand that people can recall from their memories, and they like it enough that they will automatically come back. In general, this seems like the most desirable scenario.

The second scenario is good, although weaker than the first one. If users are regularly publishing links back to your site, enough so that other users can discover it, then that's effective word-of-mouth, which is great. You can think of advertising as a specific subclass of this type of acquisition or retention. If the link is published in a trusted environment, then the trust rubs off on the link as well – it creates social proof for your app.

The last one, focused on notifications, is the least desirable, because of the fact you are needing to "push" information to the user rather than the user taking action themselves. In the particular case where this is the majority of your traffic, it means your web product has failed to integrate itself in your user base's life, and there isn't a recurring set of traffic that you can depend on.

Hierarchy of push notifications
There's even a hierarchy in here too – clearly some notifications are more personal, and thus more desirable, than others. Here's a rough hierarchy, from top to bottom:
  • Good friend sends you a private message
  • Friend writes on your profile 
  • Acquaintance writes on your profile  
  • Friend sends you a friend request

… versus less desirable messaging, which lacks personal context and comes from the company, not a friend or :

  • "Come try out new feature X!"     
  • "Check out this week's top videos!" 
  • "You should update your photo!"
  • Total stranger sends you a friend request 

In the cases where you are getting notifications from just the site, it's far more likely users will think of it as spam, which is obviously a negative. The more personal information that is in the notifications, and the more personally relevant that information is, the better.

A simple model for notification-based retention
Let's examine a scenario in which you are completely dependent on notifications to get your users back – there are some big assumptions here, but just to illustrate the idea. First, let's determine a couple starting values:
  • Initial active users = 1000
  • % that will create useful news = 10% 
  • % that will click through on the notification: 5%  
Now I'll describe the simple flow:
  • The idea is that you have 1000 users, of which 10% will create useful news
  • That means 100 people will create news
  • As long as there's at least 1 piece of news, that news can be republished to 1000 people as 1000 notifications (Note that in a more sophisticated model, the more news items, the better the clickthrough rates, and the less, the smaller the CTR)
  • Once you have 1000 notifications out there, then there's 50 people that click through
  • Of those 50 people, they produce 5 pieces of news 
  • That 5 pieces of news is then republished again to the 1000 people 
  • Then the secondary cycle repeats again

Basically, there's a quick collapse from 1000 active users down to 50 active users. If you made the model more complex, and added a CTR that goes down depending on how much news there is, or adding deliverability issues from people getting too much e-mail, then you could see this spiraling down to 0 actives.

Compare that to a scenario to one where you have many users coming back just from direct-navigation. Those folks will come in day-in-and-day out, create useful content, and otherwise support your entire ecosystem. Even if you only have 20% of your 1000 coming back on their own, that group rapidly outpaces the notifications group, and can also bring more users back.

High value content creators
The point is, the users that come to your site and create content are hugely helpful. So the question is, how do you find and support these high-value users? Here are a couple thoughts from a brainstorm:
  • Build features that support high-quality single-user experiences
  • Make it easy to create content on the site, and reward users that do
  • Create differentiated experiences that users can weave into their daily routine
  • Be as sticky as possible – this is a place where software clients are great, but websites are hard
I think a lot of the traditional values of Web 2.0 apply here – many of the product features that appeal to creators and builders are great.

Are all Facebook apps notification driven?
One interesting point of all of this is: How many Facebook apps are notification driven versus being pulled by the user? Only the app builders can answer that, but I would guess that most of the apps are notification driven. My theory there would be that people tend to get re-engaged based on seeing their friends in the newsfeed or through a notification.

The only opportunities for people to navigate to their apps is either on the left-side bar on the homepage (which needs to be clicked on to extend all the way out), or by browsing into their friends' profiles. I'd guess that the latter would be promising, from a navigating perspective, but Facebook is also more centralized than MySpace is, for example. On MySpace, there's a lot of profile-to-profile browsing, whereas anecdotally, Facebook is more about checking your newsfeed as a central point, then jumping to wherever the action is (be it on a picture, a wall, a group, or whatever), and then coming back to the homepage.

For better or worse, I think it would hugely benefit Facebook to allow more prominent display of apps on the homepage – by adding the ability for apps to build their own brands and get return visitors, there would be an incentive to develop deep applications rather than ones that focus on virality. On the negative side, letting apps build brand is also the first step to Facebook losing control of its own platform.

If anyone has comments or data on the above, I'd be interested in hearing more.

UPDATE: Thanks to Brian Radmin to correct me on my faulty multiplication :)
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