https://www.lennyrachitsky.com/p/what-is-good-retention-issue-29
Hello, and welcome to the free monthly edition of my weekly newsletter. I’m Lenny, and each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out at the office.
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I’m very excited about this week’s post, so let’s get to it.
"Great retention is THE scalable way to grow a product. It's the best indicator of product-market fit, it is the most important factor in a user’s lifetime value, and high retention drives all of the best acquisition strategies. It's growth's equivalent of the triple-word-score."
Although retention is widely considered to be the most important metric to get right when building (and investing in) a business, it’s also one of the least understood. Why? Because unless you’re a growth expert or an experienced investor, you’re often relying on anecdotes, dated blog posts, and misguided benchmarks. I ran into this problem myself many times when working with startups.
So when Casey Winters (former head of growth at Pinterest, GrubHub, and now CPO at Eventbrite) brought up this question in a conversation we were having, we decided to take the opportunity to do some new research. Together, we reached out to twenty of the most experienced growth practitioners we knew and asked them two simple questions:
Taking these insights and combining them with available public data, we’ve come up with a set of concrete recommendations for GOOD and GREAT retention across most types of businesses. Below you’ll find a visual summary of these conclusions, along with detailed recommendations from each of the experts, and public comps from many of today’s biggest companies.
As a companion to this post, Casey also published an essay delving into ways to increase retention, amongst other topics, which you should definitely check out.
Without further ado, let’s dive in.