Retention is a measure of the people who tried your product and liked it enough to return.
In the initial stage, everyone focuses on customer acquisition, but in the later stage the focus must shift on customer retention.
Retention is a good way to measure product-market fit and by far the best lever for product growth.
Smiling curves: When a product is truly exceptional.
Flattening curves: This archetype suggests that a percentage of users who sampled the product found value in it and return to it over time.
Declining curves: When a product has not achieved product-market fit, the retention curve will continuously decline, eventually reaching very few or zero users.
But the 🎯 bullseye which every PM want is the smiling curve.
And for that your product needs to have that virality i.e. your existing user refers it among the peer group.
No Retention ➡️ Bad
Retention ➡️ Ok (CAC > CLTV)
Retention + Virality ➡️ Gold (CAC < CLTV)
Growth 📈 Loop ➰ is the way towards sustainability.
Views expressed are personal. Please be free to give your suggestions/inputs or counter-arguments. I will be happy to discuss them. You can follow me on LinkedIn or Twitter