Building State In-Product To Drive Retention
I was using Figma the other day and noticed that the product has become much more technical compared to its early days. When I first tried my hand at product design, it only took about a week to learn the basics of Figma and create screens. However, now I don't think anyone could master it within that timeframe.
Figma was acquired by Adobe for a significant amount of money($20 Billion). This news was both groundbreaking and, for some, heartbreaking because it meant the end of Figma as a free product. Adobe is known for placing a premium on its software. However, what intrigued me more about Adobe was itsΩ approach to developing specialized tools for experts. I knew Figma was about to become bloated which sounds frustrating for new users but is a solid retention strategy.
Being an expert on any product means you are a power user. Being a power user implies that you engage in numerous activities on the product, to the point where you may know the platform better than its own product manager. Adobe excels at creating products that cater to these experts. This means that Adobe products are designed to be technical, allowing experts to build to their heart's content.
This unique strategy of building expertise is also at the core of their retention strategy, in my opinion. By being the best platform for getting a job done, people are more likely to invest time in learning your product, pay for it, and use it as their primary tool.
This strategy addresses the breadth and depth problem that product teams try to figure out when it comes to product adoption. As a primary tool, users in an industry will commit to that tool, and because they have invested so much time in it, they will use it more frequently than others. This is known as building a state in a product.
Another important concept which I find thrilling is when users build reputation in your product, it’s not just about gamification-driven badges, I am talking about designers placing their essence of being a designer on being able to carry our photo manipulation on Lightroom. I am talking about how Photoshop designers will never validate Canva as a legitimate design tool.
Apart from Adobe, other companies have leveraged State Building and Reputation Building as a core of their retention strategy:
Webflow: Website creation is an activity that involves building a website from scratch. While it may seem easy to achieve customer retention in this field, my experience with building website-creation tools has shown that users tend to churn after creating their first website. However, Webflow, a leading website-creation tool, has managed to overcome this challenge by offering a product with built-in complexity based on the CSS box model. Webflow primarily targets freelancers who have a strong motivation to build multiple websites due to financial incentives. In addition to website creation, Webflow provides other useful features such as the ability to build reusable components and integrations to extend the functionality of the product.
PiggyVest: The WAEC result is a major motivator for why people would choose to stay on Piggyvest. Its competitiveness and appeal to outsiders make it enticing. The main purpose of Piggyvest is to encourage saving, and the team has done an excellent job with automated services. However, what interests me is the expansion of features into investments and the recognition of power savers outside of the product. Piggyvest has successfully combined reputation-building and social graphs to retain its users and attract new ones.
Chrome: One way people build state in Chrome is through extensions and features such as password auto-save. It's unfortunate that Chromium was made open source (Apple would never do that). However, whenever I consider switching to a different browser due to Chrome's performance issues, I feel stuck because I don't know how to transfer everything I have built and stored in Chrome. Fortunately or unfortunately for Chrome, many browsers like Brave can transfer data from Chrome.
Building State in your product is the key to acquiring power users, it’s also the key to recurring revenue. The most crucial part of it is ensuring your product actually solves a problem. The next thing is to employ the following tactics:
Non-Transferrable Reputation - Game design plays a crucial role in this aspect. Badges, scores, and ratings are all reputation tactics that product teams use to acknowledge the efforts power users invest in your product.
Social Graphs - Finding a way to help people build relationships within products is a great way to enhance engagement and drive customer retention.
Non-Transferrable Data - Avoid the mistake of Chrome by ensuring that your platform is the exclusive location for user data and artefacts. While it may seem like you are imposing restrictions, it actually increases the likelihood of retaining users.
Helping your users build state starts from understanding the problem deeply and that problem has to be complex enough that users commit to learning your solution.
The next thing is leveraging game design to set experts apart and rewarding experts for their creativity on your platform. A great example of this is how Webflow places the Partner Badge on Webflow Experts, Another example is how Google certifies and publicly rewards Flutter experts.
If you run a SaaS creation tool and you are looking for how to approach state building and reputation management in your product/service, reach out to me.
Stuff I’m Eating:
Accelerate: The Science of Lean Software and DevOps: Building and Scaling High Performing Technology Organizations By Nicole Forsgren PhD, Jez Humble, Gene Kim.
The Ultimate Guide to JTBD By Bob Moesta
Retaining Users By Julian Shapiro
The B-Side Of African Tech By Stephen Deng
Introducing The Product Engagement Score By Ben Croft