When you launch a new product or service, all eyes are on the all-important growth curve. How many people are buying it? How many people are downloading or signing up to it? As managers and business-owners, we’re looking for that perfect rising curve, a ski ramp to success.
Users, not sales
However, buying, downloading or signing up is not the same as usage. In an interesting guest blog at Nir and Far, Abhay Vardhan (founder of blippy.com) discusses the need to create a habit, so that users come back time and time again. While his blog concentrates on building user habits for commercial apps, the principals are equally useful when trying to form the habit amongst employees of using a new communication app or intranet.
Buyers, not employees
Admittedly, with a company-led initiative, there is usually more motivation involved in forming the habit, in that employees may be required to use the app for specific work purposes. Yet we all know of a new system (or six) that has floundered in the water because employees simply haven’t used it. Many gave up and resorted to old, tried and tested methods, even if they were less efficient or even less accessible.
Downloaded by millions, used by few
In Vardhan’s case, his company created a new app that was initially greeted with great enthusiasm. Users rushed to download the app, and invited their friends to do the same. However, they didn’t stick with it. As Vardhan says:
“The app was downloaded by millions, but used by few.”
Cohort Analysis and Retention Rate
Vardhan decided that a different measure was required to assess who was using the app, so he turned to two different measures:
- Cohort Analysis: a cohort is a group of people who share a particular characteristic over a period of time, such as signing up on a particular day. A cohort analysis follows these users’ actions over a period of time.
- Retention Rate: The retention rate of a cohort for a period of time is the ratio of number of active users at the end of the period to the number of active users at the start of the period. A user is active on a given day if he or she has visited the product on that day.
Vardhan cited a fictitious app with two cohort group of people who signed up on two particular days. Each cohort group decayed over 10 days to a user retention rate of around 3%. Vardhan defined these remaining 3% of users as “hooked”.
In app-land, a retention rate of 20% is the baseline for success for a free to use social media app. An e-commerce app that can generate income may well be profitable with considerably less users. An analysis by RJMetrics showed that user retention by Twitter is around 22%, but is much higher for Pinterest at 45%.
Less than 5% retention?
Vardhan suggests that, as a rule of thumb, if retention rates are less than 5% four weeks after launch, then your app has not established itself as a new habit. Cohort analysis should be able to help determine why.
How long does it take to establish a new habit?
Vardhan’s statement, of course, assumes that a habit can be formed in four weeks (or less). However, there is no concerted opinion on exactly how long it does take to form a new habit.
In an interesting blog tracing the history of the habit-forming timescale, James Clear cites the plastic surgeon Maxwell Maltz who noted that it took his patients a minimum of 21 days to adjust to their new appearance:
“It requires a minimum of about 21 days for an old mental image to dissolve and a new one to jell.”
Note the word, “minimum”. Sadly, not many self-help authors noted that, citing 21 days as an absolute, not a minimum. Subsequent research published in the European Journal of Social Psychology showed the timescale was much, much longer, with an average of 66 days and up to 254 days. As Clear summarises:
“if you want to set your expectations appropriately, the truth is that it will probably take you anywhere from two months to eight months to build a new behavior into your life — not 21 days.”
Good habits take time
So, if you’re putting in any new communication or engagement system into your business, give it time to bed in. Or more to the point, give people time to use it regularly, and become hooked.
Habits are formed by regular repetition, preferably on a daily basis. So, ensure your new initiative gives sufficient incentive for employees to sign in and participate every day. And if it takes over six months for the habit to form, so be it; once it’s part of their working lives, engaging with your system will become a habit that’s very hard to break.