Mastering Engagement Playbook
Mastering Engagement Playbook
Volume 2
          MASTERING
          ENGAGEMENT
          How to build engaging products that
          your customers value
I think of user engagement as the fuel powering
products. The best products take that fuel and propel
the product and with it, the company forward.
Special thanks to the team at Optimizely and Braze, as well as our           Amplitude is the world's first product intelligence platform that combines
customers Blue Apron and Postmates, for partnering with us to share their    customer data and growth best practices to help digital teams scale their
engagement use cases. Also thanks to Nir Eyal for sharing his expertise on   business faster.
user engagement and Sarah Tavel for her support.
Contributors                                                                 If you share or write about the contents of this book, we just ask that you
Justin Bauer                                                                 give credit to Amplitude and link back to amplitude.com. Thanks!
Carter Foxgrover
Paul Koullick
Michael Ottavi-Brannon
Tanner McGrath                                                               A note on examples:
Nate Franklin                                                                Although this playbook draws on real-life examples from companies that
Cara Harshman                                                                we work with, we have altered examples to prevent disclosing specific
Austin Hay                                                                   companies and their real data. We've tried to preserve the lessons and
+ the whole Amplitude team                                                   principles behind the examples as much as possible.
Book Design
Meredith Fay
Diana Stoyanova
Jenny Chang
Sabine Althauser                                                             © 2019 Amplitude, Inc.
TABLE OF   01    THE THREE GAMES OF ENGAGEMENT                             06
CONTENTS   1.1
           1.2
                 Why user engagement matters
                 Which engagement game are you playing?
                                                                           07
                                                                           08
           1.3   Defining a north star that drives engagement              09
           1.4   Defining customer value exchange for your game            13
           1.5   Introducing the engagement loop                           17
           1.6   Measuring your engagement game                            22
           1.7   Taking action                                             31
                 Worksheet: Your product team’s north star metric          32
GLOSSARY                                                      111
CHAPTER 01
THE THREE GAMES OF ENGAGEMENT
Most products disappear into obscurity almost as soon as they're out of the press
spotlight. Research shows that the average app loses almost its entire user base in
just three months(1). Even if the latest media buzz or marketing campaign brings in a
wave of new signups, most products miss the mark on delivering actual value to their
new users—and if those users don’t find meaningful value early on, they’re gone before
you have a chance to show them anything more. That’s why having a strategy for user
engagement is so critical.
[1]
      http://andrewchen.co/new-data-shows-why-losing-80-of-your-mobile-users-is-normal-and-that-the-best-apps-do-much-better/
                                                                                                                                Mastering Engagement — 6
                                                 Topics covered in this chapter:                            The retention lifecycle framework
       TERMS TO KNOW                                                                                        After a new user is onboarded (or a churned user
                                                 1.1 - Why user engagement matters                          is resurrected), that user must engage with the
       Retention is a measure of how many        1.2 - Which engagement game are you playing?               product through a number of value-adding inter-
       users return to your product over time    1.3 - Defining a north star that drives                    actions before being activated into a regular cur-
       after some initial event (usually first         engagement                                           rent user. A current user who then becomes more
       use).                                     1.4 - Defining customer value exchange for                 and more engaged with different dimensions of
                                                       your game                                            your product can then become a power user.
       Engagement is a measure of how much       1.5 - Introducing the engagement loop
       or how often users interact with your     1.6 - Measuring your engagement game                       Engagement matters because, ultimately, it
       product.                                  1.7 - Taking action                                        drives revenue. If you consistently deliver value
                                                                                                            to your users and help them discover that value,
       Onboarding is a series of steps within                                                               they’ll stay engaged with the product, keep com-
       your product designed to show new                                                                    ing back, and keep wanting to invest their time
       users how they can use the product to     1.1 I Why user engagement matters                          and money into your product.
       obtain value.
                                                 In the Product Analytics Playbook Volume I, we
       Activation is a point or phase at the     introduced the Retention Lifecycle Framework—a
       end of Onboarding during which a          framework for analyzing retention depending on
       new user obtains enough value from        whether a user of your product is new, current,                              Power
       the product such that they become a       or resurrected. User engagement is what directs                              users
current active user of the product. the flow of users between each of these buckets.
                                                                                                                   Current
                                                                                                                      users
                                                                                                       n                              rea
                                                                                                   atio                                  ct
                                                                                                                                                  iva
                                                                                                tiv                                                   t
                                                                                              ac                                                        ion
                                                                      acquisition
                                                                                     New                                                                      Resurrected
                                                                                                                     churn
                                                                                     users                                                                       users
                                                                                                  ch                                          n
                                                                                                     u rn                                 ur
                                                                                                                                      ch
                                                                                                                          z
                                                                                                                      Z                              ion
                                                                                                                                                   ct
                                                                                                                                           rre
                                                 The retention lifecycle framework                                                     es
                                                                                                                                          u
                                                                                                                   Dormant            r
                                                                                                                      users
    [2]
          https://amplitude.com/blog/2017/10/04/thrive-product-led-era
                                                                                                                                              Mastering Engagement — 8
         TERMS TO KNOW                            1.3 | Defining a north star that
                                                                                                                 PRO TIP
                                                  drives engagement
         A north star metric defines the
         relationship between the customer        A north star metric is the key measure of success           Beware of vanity metrics, especially for
         problems the product team is trying      for the product team in a company. It defines the           your north star. “Daily Active Users” or
         to solve and the revenue the business    relationship between the customer problems                  “Registered Users” are not good core
         aims to generate by doing so.            that the product team is trying to solve and the            KPIs because they say nothing about
                                                  revenue that the business aims to generate by               what engages your customers. When
         A KPI, also known as a Key Performance   doing so.                                                   teams fail to connect engaged customer
         Indicator, is a measurable value that                                                                value directly to their north star metric,
         demonstrates how well an organization    The product north star serves three critical pur-           they risk leading their business down the
         is achieving its current objective.      poses in any company:                                       wrong path.
         An OKR, also known as Objectives         1. It gives your organization clarity and align-
         and Key Results, is a framework for         ment on what the product team is optimiz-
         defining and tracking company, team,        ing for and what can be traded off.              completes a transaction, you win. But let’s say
         or personal objectives.                  2. It communicates the product organization’s       you and your team don’t clearly define the game
                                                     impact and progress to the rest of the           you’re playing. Instead of shipping features that
         A leading indicator is a value or           company, resulting in more support and           get customers to make purchases, you end up
         measurement that can be used to             acceleration of strategic product initiatives.   shipping features that increase the time custom-
         indicate future business outcomes.       3. Most importantly, it holds product teams         ers spend browsing for goods. This might not
         Good north star metrics are leading         accountable to an outcome.                       do your business much good. In fact, it might do
         indicators of success. On the other                                                          harm if you inadvertently decrease the number of
         hand, metrics like ARPU and monthly      Purpose #3 is where aligning your north star        purchases being completed.
         revenue are lagging indicators.          metric with your engagement game becomes
                                                  crucial. If you measure product success on a        Knowing which engagement game you’re playing
                                                  north star that doesn’t represent customers         is the first step towards defining a north star
                                                  using your product in a way that they get value,    metric and set of KPIs that focuses your team’s
                                                  you risk optimizing for the wrong metric and        efforts on shipping features that create value for
                                                  ultimately the wrong outcome.                       customers, and ultimately helps you win.
[3]
      http://papers.www2017.com.au.s3-website-ap-southeast-2.amazonaws.com/companion/p617.pdf
[4]
      https://www.socialmediaexaminer.com/linkedin-endorsements/
                                                                                                            Mastering Engagement — 10
                                 Here are some hypothetical north stars from                     mind: companies playing the same game can
                                 companies playing each of the three engage-                     have radically different north stars because it
                                 ment games. One important thing to keep in                      reflects their unique product strategy.
                                   Attention                       !" #
                                                                                               • Time spent actively engaging with feed
                                 Transaction
                                                                                               • Purchases per prime subscriber
                                                 $
                                                                                               • Purchases per customer visit/session
                                 Productivity
                                                                                               • Avg records created per account
While Facebook and Netflix both play the atten-     Salesforce aims to be the central source of truth
tion game, their business models are radically      for customer records at B2B companies. Their
different. Facebook’s revenue is proportional to    latest strategy revolves around AI for decision
the amount of feed engagement and hence ad          making in sales. This means that their north
revenue generated. Netflix, on the other hand,      star would be less about user adoption and
follows a subscription model with a fixed (but      more about the amount of customer data they
growing) amount of content. Let’s say Netflix       store for their accounts. On the other hand,
read our Mastering Retention playbook and           Adobe Creative Cloud likely focuses on individual
found out that subscribers watching greater         subscribers and driving enough engagement to
than X hours of content per month were more         ensure continued subscription.
likely to be retained the next month. Instead of
focusing on total time spent watching content,      Product teams need to start their strategic plan-
Netflix’s north star should be about getting more   ning by defining the engagement game they are
subscribers to watch that amount of content.        playing. This, along with their business strategy,
                                                    informs their product north star metric. Getting
Players of the transaction game:                    your engagement game and north star metric
Amazon vs. Walmart                                  right is the core of product strategy and organi-
                                                    zation. At the end of this chapter you will find a
Similarly, Amazon Retail and Walmart might have     helpful template that will allow you to have this
very different north stars despite being players    discussion in your own organization.
in the same transaction game. Amazon is likely
optimizing for the number of Amazon Prime           The engagement game defines much more than
subscribers and the value that it generates for     the core KPIs a product should track. The specific
them, especially since the Prime subscription       game you’re playing also dictates fundamental
gives Amazon visibility into customer loyalty and   concepts around the product-customer value
lifetime value. Walmart, on the other hand, is a    exchange that you should be designing into your
cost leader—a company that has competitive          application workflows.
advantage by having the lowest cost of produc-
tion in the industry—and is probably focusing on
increasing the percentage of their customers'
spend over time.
                                                                                                         Mastering Engagement — 12
01    Three Games of Engagement
When your product is playing the attention game,                        Twitter video plays the
you are vying for your users' time. In return, you                      attention game                                       A clear exchange of value had taken place:
offer them entertainment, information, stim-                                                                                 customers were receiving entertainment and
ulation and/or emotional relief. The easier and                         Twitter's video and live-streaming platform is a     information and the business was receiving ad
better you offer this value, the more time cus-                         prime example of a product playing the attention     engagement in exchange. This prompted the
tomers spend using your product. Industries that                        game. Twitter's number of daily video views nearly   social media giant to sign up with companies like
typically play this game today are digital media,                       doubled in the past year and contributed to more     NBCUniversal and Walt Disney to offer more news
social media, gaming and other types of products                        than half of their ad revenue for two consecutive    and entertainment in video format(5).
showing you advertisements.                                             quarters.
[5]
      https://www.bloomberg.com/news/articles/2018-06-04/twitter-dissolves-live-video-team-in-broader-content-shakeup
                                                                                                                                                         Mastering Engagement — 14
                                                                  1.4.2 | Creating customer value in                             retail giants to smaller marketplaces and sub-
                                                                  the transaction game                                           scription services.
                                                                  Products playing the transaction game generate                 Products playing the transaction game offer a
                                                                  value via commercial transactions taking place                 few different types of value to a customer. Some
                                                                  online. Companies you will most often find play-               businesses, like Walmart.com and Amazon, chief-
                                                                  ing this game are e-commerce platforms—from                    ly offer the customer utility. These companies are
                                                                                                                                 extremely focused on price points and shipping.
                                                                                                                                 In fact Eugene Wei, an early product manager at
          EXAMPLE                                                                                                                Amazon, said that customers cared about ship-
                                                                                                                                 ping costs to an irrational extent(6). Customers
         Bonobos plays the                                       shopping experience to help men find their right                who shop with these brands feel assured they are
         transaction game                                        fit, make purchases online, and have their orders               getting the best deals on their purchases without
                                                                 shipped directly to their home. In this value                   ever leaving the comfort of their home.
         Men's clothing brand Bonobos seeks to solve             exchange, customers make a purchase in order
         a pain they believe most men seem to have:              to fulfill a desire for clothes and for the utility of          Transaction-focused companies that take a more
         shopping. They've created a guided, hassle-free         having those clothes delivered.                                 curated approach in their product offer status
                                                                                                                                 and fulfillment to their customers. In this value
                                                                                                                                 exchange, the price of the purchase matters less
                                                                                                                                 than the satisfaction it provides, or the pain it
                                                                                                                                 relieves. For example, a customer may find value in
                                                                                                                                 a luxury brand's e-commerce platform because of
                                                                                                                                 the social status that the product offers them. On
                                                                                                                                 the other hand, something like a weekly meal deliv-
                                                                                                                                 ery kit fulfills a need they have to eat healthy, home-
                                                                                                                                 cooked meals without worrying about groceries.
                                                                                                                          [6]
                                                                                                                                http://www.eugenewei.com/blog/2018/5/21/invisible-asymptotes
Products playing the productivity game are             HubSpot plays the                                    marketing hub, for example, offers everything from
focused on creating an easy and reliable way for       productivity game                                    blogging and landing page creation to marketing
a customer to complete an existing task or work-                                                            automation and SEO. Instead of using several
flow. These products provide value by solving          Boston-based enterprise HubSpot offers a full        different, disparate tools to accomplish the same
a problem customers have, helping customers            suite of marketing and sales software that helps     task, an all-in-one platform allows users to create
increase efficiency, or giving them mastery over a     teams grow and scale their inbound marketing         a single, integrated workflow. By easing the pain of
particular task. B2B software companies are the        strategy. Each paid ‘hub’ of HubSpot offers its      learning and managing different marketing tools
predominant players of the productivity game—          respective user base efficiency and utility in the   and workstreams, HubSpot promises marketers
think products like Evernote or Asana—but can          form of an all-in-one software. HubSpot's paid       mastery of their inbound marketing strategies.
be played by others as well.
                                                                                                                                        Mastering Engagement — 16
                                                   In the next section, we introduce the concept of     them back regularly. Maximizing value in the first
         TERMS TO KNOW                             the engagement loop, which will help you apply       session requires streamlining your product to
                                                   the game framework to your customer growth           create value early. With decreasing consumer
         An engagement loop is an interaction      strategy.                                            attention spans, you can longer afford to have an
         framework describing the actions and                                                           onboarding flow that doesn’t also create value for
         triggers that current engaged users                                                            the customer. The type of value created might be
         cycle through when they use your          1.5 | Introducing the                                different from your product’s main workflow, but
         product regularly.                        engagement loop                                      it’s important to give the user an experience that
                                                                                                        they want more of.
         A customer-value exchange describes       The engagement loop is an interaction frame-
         the potential value that products         work that describes the actions and triggers         How to use the engagement loop
         deliver to customers in exchange for      your customers experience when they use your         Product teams should use the loop to frame their
         the customer’s investment of time and     product regularly.                                   interaction model and lay out a clear hypothesis
         money.                                                                                         of how their customers go through each step of
                                                   What the engagement loop does                        the loop. Comparing this to the reality of what
         An aha moment is the moment or set        This framework helps product teams describe          customers are experiencing helps clarify where
         of actions within your product that       your product’s complete interaction model from       your UX needs to be streamlined and where your
         leads users to first discovering value.   the customer’s perspective. This in turn helps the   product is simply not performing. Keep in mind
                                                   team make better decisions about where in the        that companies which don’t have repeat use
         A trigger is a stimulus that brings       customer experience a particular feature area fits   models (mortgage platforms, for instance) don’t
         users back to a product. This can be      in and whether it is serving the right purpose.      typically need or have loops.
         an external trigger, such as an email
         or push notification, or an internal      Why the engagement loop matters
         behavioral trigger, such as a pre-        In order to grow, every “engaging” product needs
         existing habit.                           an interaction loop that maximizes the value
                                                   created in your user’s first session and brings
         Social proof is the phenomenon
         wherein a large group of people
         conform to each others’ behaviors and
         actions. If users of your product get
         their friends and acquaintances to also
         become users, this can be a point of
         social proof for you.
                      02
                         Aha
                        moment
  01                                      03                    04
                                             Value
    Curiosity                              exchange                Trigger
05
                           Social
                           proof
                                                                                                         Mastering Engagement — 18
                                  1.5.1 | Building in the right engagement           Once you have defined the actions that fuel your
                                  elements                                           engagement loop, product and growth managers
                                                                                     need to design their UI/UX to accomplish the
                                  Below are some questions you can ask to map        following:
                                  your product to this engagement model. This will
                                  help you better understand whether your current    1. Remove any possible barrier to accessing
                                  product workflow has the right engagement ele-        your main value proposition. Streamline
                                  ments built into it:                                  your UI to make the aha moment idiot proof.
                                                                                        No distractions, no wandering, just the
                                  •   What am I doing to drive a curious customer       minimum steps needed for users to realize
                                      to their aha moment?                              that moment of magic. Spotify’s onboarding
                                  •   What is my recurring unit of value exchange?      is a great example of a simple flow that gets
                                  •   What is the customer investing in that I can      users to experience product value as soon
                                      leverage to make each subsequent exchange         as possible. Instead of prompting new users
                                      of value more valuable?                           to enter their credit card information and
                                  •   How am I timing my ask for reviews and            sign up for a Premium trial, it lets them start
                                      referrals from customers?                         listening to their favorite songs right away(7).
      Spotify's onboarding flow
                                                                                          [7]
                                                                                                https://www.pageflows.com/post/onboarding/spotify/
Before
After
[8]
      https://www.appcues.com/blog/slack-user-onboarding-experience
                                                                      Mastering Engagement — 20
      3. Create benefits for customers to increase
         their investment in your product. Offer
         rewards to encourage investment behav-
         ior. Gamification of your product—by
         offering login rewards or a weekly ranking
         against other users, for example—is one
         way of doing this, but even small, random
         indicators of achievement can boost how
         someone feels about using your product.
         For example, Asana encourages productiv-
         ity and collaboration with the “celebration
         creature” that majestically zooms across
         the screen when you complete a task(9).
                                                                                                                      [9]
                                                                                                                            https://asana.com/guide/help/tasks/celebrations
                                                                                                                        Mastering Engagement — 22
      Defining custom events for complex
      user engagement patterns
      Amplitude helps users create their own custom                Custom Event Details
      definitions in real-time using events that have
      already been instrumented. This can be partic-               Project
      ularly useful when trying to measure complex                 AmpliTunes
      engagement patterns that need, “AND” or “OR”
                                                                   Custom Event Name
      conditions to combine different actions together.
                                                                        All US Purchases
Using Event Segmentation in Amplitude, you            Uniques   Event Totals   Active %    Average      Frequency         Properties          Formula
can segment events and the users who perform
them by user or event properties. In the Metrics                                 ..measured as unique user(s)
Module of this chart, you can choose which
metric you want to query by over a selected time
frame or in real-time. In the next couple sections,                                                                         The Measure Module in Amplitude’s
we’ll talk about how to use this module specifical- Event Segmentation chart
                                                                                                                               Mastering Engagement — 24
     Measuring the attention game
                                                            AmpliTunes
     Recall if you’re playing The Attention Game, you       Monthly Total Hours of Content Played
     care about capturing your customers’ time. In
     exchange for entertainment, information, and/or
     self-expression, your users might provide you with           Events                                               ..performed by Any Users
     ad revenue, subscription fees, or referrals. Well-            A     Play Song or Video                            1   United States
     known products that are winning at this game are
                                                                        grouped by Duration                                where Cohort      =   United States
     Netflix, Spotify, and Twitter, for example.
                                                                                                                           and where Select event…
                                                                   B     Select event…
                                                                                                                           and who performed Select event…
     Do it with Amplitude
                                                                                                                       + Select property…
                                                              8,500k
OR
Takeaway
If you’re playing the attention game, you probably             4,500k
have a north star related to measuring how much
of a user’s time you are capturing. This means
                                                                3,500k
you’ll need to make sure you’ve instrumented an
event property related to the duration of some
                                                                        ‘17
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                                                                                                                                             Mastering Engagement — 26
     Measuring the transaction game
                                                                AmpliTunes
     Remember if you’re playing the transaction game,           Monthly Total Purchases of Rock Music
     you care about the number of transactions your
     users make. In exchange for the ability to acquire
                                                                     Events                                                    ..performed by Any Users
     something they need or desire, your users provide
     you with purchases, price signals, and sometimes                 A     Purchase Ticket                                    1   United States
     ad engagement. E-commerce businesses are                              where Genre_Type      =   Rock                          where Select property…
     typically the main players of this game—including
                                                                                                                                   and who performed Select event…
     giants like Amazon, as well as monthly subscription              B     Select event…
     boxes, and on-demand delivery services.                                                                                   + Add Segment
Step 4 Now it’s time to do the analysis. Move to           Monthly, Last 12 Months
the Measure Module at the bottom and choose
to measure by Event Totals. This will show total
number of times the action ‘Purchase Ticket’ with                       14M                        1.06M              5.94%                     17.0%
the ‘Genre_Type’ Rock was performed at each                       Jun ’17 - Jun ‘18                May ‘18            since Apr ‘18            since Jun ‘17
data point. Then, make sure the date picker is set
to Monthly, so you’re seeing monthly totals.
                                                         1,500k
Takeaway
One of the north star metrics that most players
of the transaction game care about is the number         1,200k
of transactions happening over some period of
time, across various user segments. Use Event
Totals when you want a count of how many times a          900k
purchase action was performed in a specific time
frame.
                                                          600k
300k
                                                             0k
                                                                  17
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                                                                                                                                                8
                                                                                                                            ‘18
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17
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All Users
                                                                                                                                          Mastering Engagement — 28
      Measuring the productivity game
                                                                TeamChat
      Players of the productivity game care about users         % Monthly Paying Users Sending a Message
      performing high-value digital tasks. In exchange
      for the ability to complete tasks with efficiency and
                                                                      Events                                                   ..performed by Any Users
      mastery, customers often pay for a subscription or
      license for the software. Players of the productivity            A     Send Message                                      1   Paying customers
      game are often (but not limited to) B2B companies,                                                                           where Paying      =   True
                                                                       B     Select event…
      like Slack, Asana, Salesforce, and others.
                                                                                                                               + Add Segment
      Do it with Amplitude
                                                                                                                               ..grouped by     Select property…
50%
25%
                                                             0%
                                                                   ‘17
                                                                                                                                                               18
                                                                                                                                               8
                                                                                                                              ‘18
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Paying customers
                                                                                                                                         Mastering Engagement — 30
                                                    1.7 | Taking action                                  Before moving on to Chapter 2: New User Activa-
         FURTHER READING                                                                                 tion, take a moment now to reflect on your learn-
                                                    This chapter introduced the Three Games of           ings from Chapter 1 and consider the following:
        If you’d like to dive deeper into some of   Engagement model: the attention game, the
        the topics we covered in this chapter, we   transaction game, and the productivity game.         q    Which of the three engagement games is
        suggest starting with these articles:       Deciding which game your product is playing is            your product is playing?
                                                    critical because it forms the crux of your engage-   q    Describe the customer value exchange
        The Hierarchy of Engagement, expanded       ment strategy. With the right game in place, you          that happens within your product.
        Sarah Tavel, General Partner at             can then:                                            q    How does your product north star relate
        Benchmark, formerly Product at Pinterest                                                              to the game you are playing? How does it
        https://medium.com/@sarahtavel/the-         •   Define a good product north star                      reflect the value you want customers to
        hierarchy-of-engagement-expanded-           •   Determine what value your product offers              get from your product?
        648329d60804                                    to your customers and the value they offer       q    Name some key engagement elements in
                                                        to the business in exchange                           your product that will move a new user
        Don't Let Your North Star                   •   Understand how to build an engagement                 through the engagement loop. -
        Metric Deceive You
                                                        loop that keeps the value exchange going         q    Complete the following worksheet on your
        Brian Balfour, CEO of Reforge; Shaun
                                                                                                              north star metric.
        Clowes, formerly Head of Growth at
        Atlassian; Casey Winters, formerly
        Product at Pinterest
        https://www.reforge.com/blog/north-
        star-metric-growth/
PRODUCT VALUE
                                                                     Example (Amplitude):
                                                                     help customers easily answer questions about what drives user behavior
Example (Amplitude):
Amplitude empowers companies to turn their product vision into
reality by helping them answer questions about user behavior and
power a better customer experience.                                  CUSTOMER VALUE
                                                                     Example (Amplitude):
Which engagement game are you playing?                               Customers purchase Amplitude and add revenue
q   ENTERTAINMENT           q    INFORMATION         q   UTILITY     What is your product team’s north star metric? How does this relate to
                                                                     your product strategy and the customer value you deliver?
q   SELF-EXPRESSION         q    STATUS              q   MASTERY
                                                                     Example (Amplitude): Amplitude’s current north star metric is “weekly
q   FULFILLMENT             q EFFICIENCY                             querying users” -- the number of weekly users who use Amplitude
                                                                     to answer at least one question. This metric is a direct measure of
Example (Amplitude): UTILITY, EFFICIENCY, MASTERY                    the product value Amplitude promises.
                                                                                                                     Mastering Engagement — 32
CHAPTER 02
ACTIVATING NEW USERS
Now you have two mental frameworks in your pocket: The Three Games of
Engagement as a way to think about what value your product offers users and
vice versa and the engagement loop as a way to describe the actions and triggers
an engaged customer experience. In this chapter on new user activation, we’ll
begin to put those models into practice. At the end of this chapter, we also share a
special case study on how Blue Apron uses product analytics and experimentation
to better activate their new users.
                                                                                       Mastering Engagement — 33
                                 Why activation matters                                                           zero. It doesn’t matter if your product is great
                                                                                                                  otherwise; a poor first-time experience could
                                 Whether you’re at a job interview or on a coffee                                 mean you’ve lost them forever.
                                 date, first impressions matter—and the same
                                 goes for your product. Remember when we men-                                     No matter which game you’re playing—attention,
                                 tioned that the average app loses almost their                                   transaction, or productivity—engaging new
                                 entire user base within a month? Turns out that in                               users is all about offering them a small but unfor-
                                 a bracket retention analysis we did of 500 million                               gettable taste of your product’s value early, so
                                 Android and iOS mobile devices, we found that                                    that they come back for the second time, then the
                                 66% of new users abandon apps within the first                                   third, fourth, and more. In Chapter 1, we defined
                                 week of install.                                                                 the moment when a user first derives value from
                                                                                                                  your product as the aha moment. The process of
                                 If you’re great at acquiring new users but unsuc-                                getting new users to the aha moment, and then
                                 cessful at showing them value, you can expect                                    to the point where you get business value back
                                 that new user retention curve to dip straight to                                 from them is called activation.
                                                             0%
                                                                   0    10    20     30       40       50         60      70     80      90
02
                                 Aha
                                moment
   01                                                                                  04
                                                         03
    Curiosity                                               Value
                                                          exchange                        Trigger
05
                                   Social
                                   proof
                                                                                                                            Mastering Engagement — 35
                            Topics covered in this chapter:                                       We calculate real growth in new users by measur-
                                                                                                  ing activation.
                            2.1 - Defining growth in new users
                            2.2 - Breaking down new user activation                               Most of the existing content out there about
                            2.3 - The ladder of engagement                                        activation define a new user as activated when
                            2.4 - Measuring new user activation                                   they have a good user experience and derive val-
                            2.5 - Taking action                                                   ue for the first time. 500 Startups’ founder Dave
                                                                                                  McClure describes activation as “users enjoying
                            Case study: How Blue Apron uses A/B                                   their first visit”[11].
                            testing and product analytics to activate
                            more new customers                                                    Throughout this chapter, you’ll see that we
                                                                                                  define activation more strictly than others.
                                                                                                  Activation isn’t only about bringing users to the
                                                                                                  aha moment. We define activation as the point
                            2.1 | Defining growth in new users                                    at which a user finds value in the product and
                                                                                                  goes on to provide value to the business. This
                            First, we have to talk a little bit about how we’re                   value can take the form of viewing an ad, making
                            defining activation in this playbook and why this                     a purchase, or converting from a free trial to
                            matters for measuring new user growth.                                paid subscription. What matters is that the user
                                                                                                  make a tangible contribution to your business—
                            According to Tanner McGrath, Head of Analytics                        and, thus, contributes to the real growth of the
                            at Amplitude, and formerly PM of Growth Engi-                         business.
                            neering at Postmates, real growth is about driving
                            scalable and repeatable business outcomes. This                       With that, let’s explore the subphases of new user
                            means metrics like total number of app down-                          activation.
                            loads, new account sign-ups, and Daily Active
                            Users are poor measures of new user growth.
                            They’re vanity metrics that fail to measure real
                            usage or engagement in your product and the
                            real ROI of your marketing spend (10).
                                                                                          [10]
                                                                                                 https://amplitude.com/blog/2016/02/25/actionable-pirate-metrics
                                      [11]
                                             https://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-version/2-Customer_Lifecycle_5_Steps_to
You’re probably familiar with a typical growth                                                                   Activation is the point at which a user
                                                                                  Activation
funnel. Let’s look at it through the lens of new                                                                 finds value in the product and also
user activation.                                                                                                 provides value back to the business.
                                                                                  Retention
Marketing teams typically own the awareness                                                                      Onboarding is your product’s first date
stage, getting people to notice and learn about                                                                  with a new user. The process by which
                                                                                   Revenue
your product and brand. Growth teams tend to                                                                     new users get acquainted with your
own the acquisition stage, using both marketing                                                                  product and first discover value.
and engineering efforts to increase the number                                      Referral
of registered users. The product team touches all                                                                An aha moment is the moment or set
phases of the growth funnel, playing a major role                                                                of actions within your product that
in the activation, retention, and revenue phases.                        An example growth funnel based off      leads users to first discovering value.
                                                                            Dave McClure's pirate metrics
We can unpack the activation phase specifically                                                                  Ladder of engagement is the “ongoing
into three critical steps: onboarding, the aha                                                                   learning journey a new user embarks on
moment and the ladder of engagement, and the                                                                     to become an expert.”
first value exchange.
                                                                                                                 First value exchange is the first
                                                                                                                 exchange of value between a new user
Activation
PMs rightly obsess over the journey a user takes              into each subphase of activation in order to see
from registering for a new account, performing a              how each one can make or break the early success
core action, and then coming back to the product              of a product.
for the first time after account creation. Let’s dig
                                                                                                                                Mastering Engagement — 37
      2.2.1 | Activation Stage 1:                            Let’s dive into each one and see how it relates to                 Tumblr uses a large tool-tip next to the new post
      Onboarding                                             your customer engagement game.                                     window to offer advice while you compose your
                                                                                                                                first post. They offer guidance first on styling your
      Whether you're talking about a B2B product play-       Doing-focused onboarding                                           text, and then on managing your blog after your
      ing the productivity game or a B2C app playing         In a doing-focused onboarding flow, your goal is                   first published post.
      the attention game, how you onboard your new           to get users to test-drive the actions that make
      users is mission critical to keeping them around.      your product useful or interesting. Building a                     Doing-centric onboarding need only be as compli-
      Onboarding, the first phase of new user acti-          doing-focused onboarding flow makes sense                          cated as your product. In fact, it should definitely
      vation, is a the process by which new users get        if your product is built around a unique form of                   not be more complicated than your product—the
      acquainted with your product and first discover        behavior or around taking repetitive action—a                      ideal onboarding experience for a mobile game,
      value. In other words, onboarding is your product’s    mobile game is a good example.                                     for example, is the minimum instruction neces-
      first date with a new user. The type of experience                                                                        sary to make sense of the mechanics of the game.
      you provide your new users here will determine         In this onboarding style, you need to quickly and
      whether those users come back for a second time.       effectively demonstrate how to use your product
                                                             not necessarily why to use it. A product like Tum-
      When you think about improving activation, you’d       blr, for example, needs to quickly instruct its new
      be wise to dig into the onboarding process first.      users on how to create a new post.
      This means starting with the sign-up page and
      understanding the first several steps a new user
      needs to take in order to realize value. How can you
      make those steps easier? Faster? More enjoyable?
                                                                                                                                   [12]
                                                                                                                                          https://conversionxl.com/blog/6-user-onboarding-flows/
[13]
       https://www.appcues.com/blog/mobile-onboarding-ecommerce
[14]
       https://conversionxl.com/blog/6-user-onboarding-flows/
                                                                                                                                                Mastering Engagement — 39
      Typeform, for example, walks new users through
      creating their first new form, their core product
      offering. By the time the user is finished, they’ve
      hopefully gotten a good introduction to the the
      product while also creating something beneficial
      for themselves.
      Account-focused onboarding
      Social media applications, common attention
      game players, are prime examples of products that
      follow account-focused onboarding. A core part of
      onboarding in Twitter, LinkedIn, and Pinterest, for
      example, is having new users complete a profile
      and connect with other users. The goal is to make
      sure the new user has their account populated
                                                            Typeform’s onboarding flow walks new users through building their first form[15]
      with interesting content when they first arrive, as
      well as a network of people to interact with.
                                                                                                                                 Twitter’s account-focused
                                                                                                                                 onboarding
                                                                                                         [15]
                                                                                                                https://www.appcues.com/blog/5-things-to-love-about-typeforms-user-onboarding
just enough about the product’s value they see a with your users. Onboarding is about
BEST PRACTICES
                                                                                                                  onboarding flow or sending yet another
                                                                                                                  email. It comes from providing a core
General onboarding best practices                                                                                 value of your product early on in the new
                                                                                                                  user experience.
DO DON'T
  •    Be strategic: think about how to best get to         •   Try to optimize every square inch of your
       the core value of the product at the end of the          onboarding flow to create an increase in a
       onboarding flow.                                         top-level metric like revenue or growth.
  •    Complement in-app onboarding with other              •   Spam and pester your new users with multiple
       things, such as docs, emails, phone calls.               emails immediately after they first start using
                                                                your product.
  •    Use analytics to see what power users are
       doing differently from everyone else.                •   Build a product only for your power users.
  •    Look at your new user retention to gauge how         •   Make a snap judgment based off only a week's
       well you're keeping users around.                        worth of retention data from your app.
  •    Run A/B tests regularly to see how changes           •   A/B test something because you can't decide
       to parts of your onboarding flow affect                  what it should be from a design or product
       conversion.                                              perspective.
  •    Collect enough information about your users          •   Make your users input a ton of data manually
       that you can follow up with them after their             before they can start playing around with your
       first experience.                                        product.
  •    Lay off the mandatory tutorials and let your         •   Toss your users "into the deep end" with
       users get a chance to try your product out.              no assistance right at the beginning of the
                                                                onboarding process.
                                                                                                                                  Mastering Engagement — 41
                            2.2.2 | Activation Stage 2:                                          aha moment—contributed to better activation
                            The aha moment                                                       and growth to 1 billion users. When reflecting
                                                                                                 about this aha moment, Palihapitiya said:
                            Onboarding is the series of actions that drives a
                            curious new user to an aha moment. Experiencing
                            an aha moment is what separates users who find                                       We were able to reframe the
                            value in your product (and will hopefully continue                      entire experience around that one simple
                            to find value) from those who do not.                                premise, a very simple elegant statement of
                                                                                                   what it was to both capture core product
                            There’s a ton of content out there on why the aha                    value, to define what it meant to be able to
                            moment matters and how to determine what it                           onboard into a product that allowed you to
                            is for your product (this article [16] by Apptimize                  communicate, to get into a network, to find
                            and Amplitude is a good place to start). The most                                   density, and then to basically
                            important thing to know is that the aha moment                                             iterate around that.[17]
                            helps companies connect their higher-level
                            goals to actions that users take within their                        The aha moment concept has its merits: it can
                            product. The aha moment lets you think more                          serve as a north star for product teams working
                            upstream of that goal. Instead of just asking,                       on activation and it can be used to unite the entire
                            “How do I increase activation or conversion,” you                    company around a single elegant insight. But
                            can ask yourself, “What early core actions best                      take this with a grain of salt—discovering an aha
                            correlate with long-term success?"                                   moment for your product might be great for kick-
                                                                                                 starting your growth. But a long-lasting engage-
                            This is exactly what Facebook did.                                   ment strategy isn’t built off one magical moment.
                                                                                                 In Section 2.3, we’ll take the aha moment to a
                            Whenever people think about the aha moment,                          level deeper.
                            the infamous story about Facebook’s path to 1
                            billion users always comes to mind. Chamath Pali-                    Before that, let’s cover the third stage of activa-
                            hapitiya, who was Facebook’s VP of User Growth                       tion: getting to the first value exchange between
                            at the time, said the entire Facebook team dou-                      customer and business.
                            bled down on one metric: getting new users to
                            add 7 friends in 10 days. This single action—their
                                                                      [16]
                                                                             https://apptimize.com/blog/2016/02/this-is-how-you-find-your-apps-aha-moment/
                                           [17]
                                                  https://genius.com/Chamath-palihapitiya-how-we-put-facebook-on-the-path-to-1-billion-users-annotated
                                                                                                                                      Mastering Engagement — 43
                            An important thing to keep in mind is that the                has found value in your product, provides your
                            first value exchange doesn’t necessarily have                 business with value. A core objective of your
                            to be the most frequent or most valuable type of              business might then be to nudge these activated
                            exchange that happens within your product. It’s               users towards a higher-value value exchange
                            simply the first instance at which a new user, who            over time and ultimately increase their LTV.
EXAMPLE
                                How Pokemon Go (and other free                           analyze the behaviors of their biggest spenders,
                                games) make money                                        “whales", in order to optimize their experience
                                                                                         (and maximize revenue), while also balancing the
                                Many free-to-play mobile games make money                experience of their free users.
                                through ads, sometimes even offering an ad-
                                free experience for a small price. But what about
                                                                                                                           Pokemon Go’s
                                games that don’t seem to serve their users ads?                                            “ad-free” experience.
We’ve talked about the stages of new user activa-                According to Josh Elman, Partner at Greylock
tion at a high level, but let’s go back for a moment             and former product leader at Twitter and
to our discussion about the aha moment.                          LinkedIn, the ladder of engagement is the
                                                                 “ongoing learning journey a new user embarks
The weakness of the aha moment concept is that                   on to become an expert.”
it treats activation like a straightforward path from
A to B. In Facebook’s case, the aha moment seems                 The ladder of engagement is useful because it
to imply that “friending” leads directly and obvi-               breaks down your product into tasks that your
ously to retention. This type of direct correlation              users either need to do or understand in order to
is simple, elegant, and easy to rally around and,                see value[18]. The first few rungs of your product’s
as such, the aha moment can be a highly useful                   ladder should set the stage for deeper engage-
internal motivator. But as an entire framework for               ment. Here at the bottom of the ladder, you are
product strategy, it is insufficient on its own.                 onboarding new users, showing them the ropes,
                                                                 nudging them to perform critical actions, facilitat-
Retaining customers for the long term requires                   ing learning, and so on.
the product 1) provide continuous value to users
and 2) users develop new habits that include                     As users delve deeper into your product, and
using the product. Users don't just snap into                    ascend the ladder, you need to bring them more
habits because they added a certain number of                    value and deepen their engagement. The higher
friends within a certain number of days. They                    they go, the better they should feel. The topmost
acquire habits over time. They make decisions                    rung of the ladder is usually where you’ll find your
over the course of many moments—not just one                     power users—the people who are highly engaged
“magical” one. And if a product can keep giving                  and have usually achieved the highest degree of
them value across those many moments, then                       sophistication in your product.
users will stick around.
                                                                 In Elman’s original blog post on the ladder of
Rather than a direct path from A to B, it’s more                 engagement, he lays out what it looked like for        A ladder visualization for Twitter’s example
[18]
       https://medium.com/@joshelman/building-your-growth-model-and-ladder-of-engagement-3b3a18f2d1a8
                                                                                                                                                       Mastering Engagement — 45
            PRO TIP                                   On the bottommost rung, a user understands               •   If defining the first rung of the ladder is tough,
                                                      what a tweet is. At the topmost rung, a user                 start at the topmost rung and work down.
          THE TOP OF THE LADDER                       learns to build their following. Twitter considered          What do you want your power users doing and
          The topmost rungs of your ladder of         onboarding and first value exchange as Rungs                 why? How should users arrive at this point?
          engagement might be behaviors or            1–4. They determined that those were the most
          actions that only your most savvy           important steps to getting new users successful-         •   Understand the proportion of users who live
          power users do. And that’s okay! Users      ly onboarded, activated, and retained.                       at each rung of the ladder. If there’s a huge gap
          don’t have to make it to the top of your                                                                 between users who reach the aha moment
          ladder to get value out of your product     Why does all of this matter? Understanding the               and users who make it beyond that point,
          or to be retained (and, in fact, most of    steps involved in a user mastering your product              you might have to “add” a new rung of two
          users probably won’t make it here). Value   helps you think holistically of multiple ways to             between steps and nudge the users to climb.
          exchange can occur at different rungs of    tackle activation and adoption, beyond creating
          the ladder.                                 a single, perfect aha moment. Breaking the pro-          •   Keep in mind that you will have to rethink and
                                                      cess of activation into many ladder rungs gives              iterate on your ladder of engagement as your
                                                      your product strategy specific areas of focus.               product evolves and/or as you uncover new
                                                                                                                   insights about your users’ behavior.
                                                      And from the perspective of the user, the further
                                                      they go up the ladder, the more effort it takes to       For activation PMs, product strategy is all about
                                                      come down. If they're investing more time and            figuring out the bottom rung of their engage-
                                                      energy and realizing more value from the prod-           ment ladder. The bottom part of the ladder is
                                                      uct, then switching to something else becomes            actually one of the most critical and challenging
                                                      more and more costly.                                    aspects of building an engaging product. Here,
                                                                                                               PMs in charge of activation should be asking
                                                      It’s easy to look at an example of an already success-   themselves what action is simple enough to get
                                                      ful product and work backwards to build out their        users to see enough of the product’s that they
                                                      engagement ladder in your mind. But, building your       would want to continue to engage with the prod-
                                                      own engagement ladder isn’t always so straightfor-       uct. In some cases, it might be what’s thought
                                                      ward, so we’ve included some tips below.                 of as the traditional aha moment—the first time
                                                                                                               a user discovers value. In Facebook’s case, this
                                                      General tips on building your ladder                     would be the “new users add friends” action. In
                                                      of engagement:                                           Twitter’s case, the bottom rung is not necessarily
                                                                                                               the aha moment—it’s about educating new users
                                                      •   Before you start, know which engagement              what a Tweet is. Without this as the bottom rung
                                                          game you’re playing and what customer                new users won’t be able to perform any other
                                                          value exchange looks like for your product.          actions within the product.
Remember that products playing the attention                      You’ll notice that there are two types of engage-
game seek to capture their users’ time by offering                ment within Facebook. Users can engage with the
them entertainment, information, stimulation, or                  content that their friends have created by liking,
relief. Facebook is an obvious example of a prod-                 tagging, commenting, etc. Or, users can create        Hypothetical example of Facebook’s ladder of engagement
uct playing the attention game.                                   their own original content by making a status
                                                                  update or uploading an album, etc.
Before the world knew what Facebook was, Mark
Zuckerberg and his team faced a challenge when                    According to a report by Pew Research Center, at
it came to getting new users to engage with the                   the time, engaging with other people’s content
product: they needed to convince people to                        was the most frequent type of engagement
leave the social networks they knew, give their                   on Facebook in 2011. Therefore, these actions
information to a new one, and start using it, even                are closer to the bottom of their engagement
if their friends weren't all there yet.                           ladder—it’s easier to engage with others than
                                                                  create yourself. On the other hand, creating orig-
Let’s look at what a hypothetical ladder of                       inal content was an activity mainly performed by
engagement for Facebook would look like circa                     power users in 2011 so it follows that this action
2011–2012—right around the time it began sky-                     makes up the topmost rung[19].
rocketing to 1 billion users.
[19]
       http://www.pewinternet.org/2012/02/03/why-most-facebook-users-get-more-than-they-give/
                                                                                                                                                    Mastering Engagement — 47
                             2.3.3 | Transaction Game:                                        The bottommost rung of Lyft’s ladder of engage-
                             Lyft’s ladder of engagement                                      ment—completing a ride—might be the simplest
                                                                                              way a new user can engage with the product, but
                             Remember that products playing the transaction                   it’s probably also the most common way users
                             game generate value via commercial transactions                  exchange value with the company. That is, if every
                             taking place online. These products are typically                Lyft user just stayed on this rung and just regu-
                             trying to maximize how much and/or how often                     larly requested a ride, the company would stay in
                             users spend. E-commerce platforms, two-sided                     good shape. Higher rungs may reflect additional
                             marketplaces, ride hailing services like Lyft are                ways that riders can engage with the product, but
                             among some of the types of companies that play                   the core of this transaction game stays near the
                             this type of game.                                               bottom of the ladder.
                             Let’s take a look at what Lyft’s ladder of engage-               As a transactional company, it's unlikely your
                             ment might look like for their riders.                           ladder is going to have as many rungs as that of an
                                                                                              attention- or productivity-driven product. It's in
                                                                                              the nature of the game that you're generally more
                                                                                              interested in customers getting on and off the
                                                                                              ladder at regular intervals rather than getting on
                                                                                              and climbing further up and up at a constant rate.
                                                        engagement could be built to point towards that      At this point, you might be wondering how exactly
                                                        feature, with every rung of the ladder designed to   you should help nudge users between rungs
                                                        accumulate value for the user.                       of your ladder and where this all fits in with the
                                                                                                             engagement loop that your product needs to
                                                        The first rung might be the very basic act of con-   have. Never fear: this is what we’ll be discussing
Notice the topmost rung is use visual search. The       tent creation—writing a note. Rungs 2–4 can then     in Chapter 3.
feature is a powerful one for Evernote since one        familiarize the user with the product and nudge
of their differentiators is the ability to transcribe   them towards adding more multimedia content          We’ve covered a lot of models and frameworks so
uploaded images and handwritten notes, then             to their notebook. As users add more visual con-     far in this chapter—now let’s look at how to put
allow you to search them.                               tent, the chances that they use the visual search    numbers to each phase of activation.
                                                        feature increases. Pretty soon, they’re taking
Let’s say this feature is one of the stickiest          advantage of this and other features that make
features of the product, but it’s something only        switching to another note-taking app costly.
power users do regularly. Evernote’s ladder of          They’re locked into the product.
                                                                                                                                    Mastering Engagement — 49
                            2.4 | Measuring activation                               •   engagement game: attention
                                                                                     •   aha moment: new user plays a song or video
                            In the last section of this chapter, we will cover the   •   first value exchange: new user buys a song
                            analyses you can perform to diagnose and improve             or video
                            new user activation in your product. Remember
                            that we’ve divided up activation into three phases:      Keep these points in mind; we’ll come back to
                            onboarding, aha moment (or ladder of engage-             them in the sections that follow. Now let’s get
                            ment), and the first value exchange.                     into the analyses.
                            •   Conversion between the different steps of            We can break down our onboarding analysis into
                                your onboarding funnel, and especially to the        three questions.
                                aha moment and the first value exchange.
                            •   Retention of newly activated users who               1) WHAT IS THE CONVERSION RATE TO
                                repeatedly perform the value exchange                THE AHA MOMENT?
                                event.
                                                                                     The first stage of activation is getting users to
                            And finally, to measure real growth in these met-        complete onboarding and onto the first rung of
                            rics after product changes have been made, we’ll         the engagement ladder—the aha moment. To
                            look at how new user acquisition cohorts track for       understand how many new users are getting from
                            these metrics over time.                                 the sign-up page to this moment, you first need
                                                                                     to define an onboarding funnel.
                            Since these analyses are best illustrated by an
                            example, let’s go back to the AmpliTunes example         Some digital products have a well-defined
                            product we introduced in Chapter 1.                      sequence that users move through during their
                                                                                     first-time experience. If that’s the case for you,
                            First, we’ll set the scenario using some of the          defining your onboarding funnel is simple: just
                            models and frameworks that we’ve discussed so            track an event for each step, and that’s your funnel.
                            far. AmpliTunes is an iTunes-like music platform
                            that lets users play and buy songs and videos.
                            As an AmpliTunes product manager, you already
                            know the following:
                                                                               Mastering Engagement — 51
      of time a user has to complete all the steps in the
      funnel in order to be considered “converted.” Keep
      in mind that you can set your conversion window               AmpliTunes
      to be anywhere from seconds to days, depending                New User             Play a Song
      on how you expect your product to be used.
OR
                                                                                                                                        Mastering Engagement — 53
      Step 2 For each subsequent step in the path,
      choose the event Top Paths. These are the top
      events (counting by event totals) at the time of
      the query.
      Takeaway
      Interestingly, Pathfinder highlights other common
      paths that new users take that are different from
      the onboarding flow we had defined before.                AmpliTunes Pathfinder report showing the top outgoing paths after the new user lands on the Main Landing Screen
25%
Do it with Amplitude 0%
                                                                          Welcome        User Sign Up      Main Landing       Search Song        Select Song    Play Song or
If you’ve already built your onboarding funnel,                                                                P                  Vd                 Vd            Vd
identifying your biggest drop-offs won’t be
                                                         AmpliTunes onboarding flow showing the step with the most dropped-off users
                                                                                                                                                       Mastering Engagement — 55
      3) WHAT ARE NEW USERS
      DOING INSTEAD OF ONBOARDING?
                                                                        Top User Paths starting with “User Sign Up” between Jul 18 and Aug 17
      Path analysis can be really useful for seeing what
                                                                       Users             User Sign Up          Step 2                Step 3               Step 4   Step 5
      users are doing once they drop out of a funnel,
      like the onboarding flow we looked at earlier. Are
      these users leaving the app for good, or are they                41,562
                                                                       Users
      doing something else instead?
                                                                       100%
                                                                       5
                                                                       Users
      Again, in Amplitude, it’s very simple to get a quick
      sense of what’s happening to your dropped off                    0.012%
      users. Once you’ve identified where your biggest                                   User Sign Up          Welcome               End Session
      drop-off is, you can just click on that region to                                  41,562 (100%)         5 (0.012%)            5 (0.012%)
      inspect it further—you have the option to view
      or download individual users, create a cohort,
      and see the paths these dropped-off users took          After clicking ‘Click To Inspect’ on the dropped-off region of this AmpliTunes onboarding
                                                              funnel analysis, you can then choose to view user paths for this group of users
      without ever leaving your chart.
      Takeaway
      User path analysis can help you begin to diagnose       experience for some users? Or, this could prompt
      problem areas and/or opportunities for optimizing       you to explore ways to bring new users back to the
      your conversion rate. In this example, you could dig    app, through email reminders or push notifications,
      into the individu al users who left the app to see if   for example, so users who do exit AmpliTunes after
      they share any commonalities—perhaps a certain          signing up will more likely complete onboarding
      browser or device type is resulting in a bad            within the conversion window.
Next in our analysis of new user activation, is look-           1    Welcome                                         1   All Users
ing at the conversion rate of users who perform                 2    User Sign Up                                        where Select property…
the first value exchange. Remember that at this                                                                          and who performed Select event…
                                                                3    Main Landing Screen
rung of the ladder of engagement, not only does
the product provide value to the user, the user also            4    Search Song or Video                            + Add Segment
provides value (usually money) to the business.                 5    Select Song or Video
There are two important analyses we can look at
                                                                6    Play Song or Video                              ..grouped by Select property…
with respect to this stage of activation.
                                                                7    Purchase Song or Video
1) WHAT IS YOUR ACTIVATION RATE?                                8    Select event…
Do it with Amplitude
                                                        The setup in Amplitude
                                                                                                                                             Mastering Engagement — 57
      Takeaway
      The funnel analysis shows that the conversion rate
      between a new user first landing on the welcome              AmpliTunes
      page to purchasing a song or video is 24.1%.                 New User             Purchasing a Song or Video
100%
75%
50%
25%
0%
                                                                           Welcome        User Sign Main Landing Search Song Select Song               Play Song  Purchase
                                                                                             Up         Page       or Video   or Video                 or Video Song or Video
All Users
AmpliTunes funnel analysis chart for conversion to the first value exchange
Takeaway
The funnel analysis shows that the conversion rate
between a new user first landing on the welcome
page to purchasing a song or video is 24.1%.
                                                                                                                                                  Mastering Engagement — 59
      3) HOW FAST DO NEW USERS ACTIVATE?
      You can look at the time it took new AmpliTunes               *   Play Song or Video                               ..grouped by Select property…
      users to convert as a distribution of the time it             *   Purchase Song or Video
      took to complete the entire funnel—from the new
                                                                    *   Select event…
      user Welcome page to purchasing a song or video,
      in this case.
      To see this view, you simply have to build out your           Conversion       Conversion/Time   Time to Convert   Frequency       AB Test-Improve   AB Test-Sig
      funnel to the value exchange moment, as we did
      in the previous section. Then choose to analyze                     ..completed within 30 days from their rst day grouped by Select Step/Property
      time to convert.
20%
10%
       0%
                       0m
0m
0m
0m
0m
0m
0m
0m
0m
                                                                                        0m
               m
             10
h1
h1
h1
h1
h1
h1
h1
h1
h1
                                                                                      h1
            0-
-1
-1
-1
-1
-1
-1
-1
-1
-1
                                                                                      -1
                  1h
2h
3h
4h
5h
6h
6h
6h
6h
                                                                                    6h
                                                 All Users
                                                                                                                          Mastering Engagement — 61
            PRO TIP                                2.4.3 | Activated new
                                                   user retention
          For a review on retention curves,        The proportion of activated new users who come
          product usage intervals, and different   back for the first time within a certain time frame
          methods of measuring user retention,     should be a key measure of activation success;
          check out Chapter 2 of the Product       this metric directly reflects not only how many
          Analytics Playbook Volume 1:             new users found value in their early exploration of
          Mastering Retention[20].                 your product, but how many users then decided
                                                   to invest in your product themselves.
Do it with Amplitude
                                                   In the previous section, we said that the first val-            chase Song or Video and the return event also
                                                   ue exchange event for AmpliTunes is purchasing                  to Purchase Song or Video. This setup indicates
                                                   content. New users who complete onboarding,                     that we will count users as retained if they pur-
                                                   play content, and then purchase content will be                 chase content, and then come back and purchase
                                                   considered activated. Here’s how you would build                content another time.
                                                   the retention curve of activated new users:
                                                                                                                   Step 2 Set up the Segmentation module so
                                                   Step 1 Create a new Retention Analysis chart.                   you’re only looking at new users in this report. To
                                                   In the Events module, set the first event to Pur-               do this, choose to analyze Users who performed
                                                                                         [20]
                                                                                                https://amplitude.com/mastering-retention/critical-event-product-usage-interval
TERMS TO KNOW
                                                                                                                                     Mastering Engagement — 63
      Takeaway
      The resulting retention curve shows the proportion
                                                                 AmpliTunes
      of new, activated users within the past 30 days
      who have returned to AmpliTunes and purchased              N-Week Retention of Activated New Users
      content sometime during the week. According
      to the curve, Week 1 retention is around 60%.              Daily, Last 4 Weeks                                                    Retention
      This means, about 60% of new users who made a
      purchase, came back and made another purchase
      during the same week. Once again, this analysis           100%
      gives you a sense of the proportion of new users
      that provide continued value to your business.
                                                                75%
50%
25%
                                                                  0%
                                                                              Week 0              Week 1            Week 2     Week 3   Week 4
Do it with Amplitude
                                                                                                                                                        Mastering Engagement — 65
      Step 2 Create a funnel analysis. In the Events
      module on the left, choose the first step of the
                                                                    Events performed in this order                    .. by Any Users
      funnel as new users landing on the Welcome page
      and the final step is Purchase Song or Video.                  1   Welcome                                          1   New Users May 2018
                                                                     2   Purchase Song or Video                               where       Cohort = New Users May 2018
      Step 3 In the Segmentation module on the right,
                                                                     3   Select event…                                        and where Select property…
      choose to view the acquisition cohorts you define
      in Step 1.                                                                                                              and who performed Select event…
+ Add Segment
..completed within 30 days from their rst day grouped by Select Step/Property
75%
50%
25%
0%
New Users May 2018 New Users June 2018 New Users July 2018
                                                                                                                                          Mastering Engagement — 67
      2) ANALYZING THE CHANGE IN
      ACTIVATED USER RETENTION RATE
                                                                   First event                                .. performed by Users
                                                                   Purchase Song or Video
      Analyzing growth in terms of a change in activated                                                       1   New Users May 2018
      user retention is similar to the retention analysis          ..then the return event                         where    Cohort = New Users May 2018
      that we did in Section 2.4.3, the only difference                 Purchasing Song or Video
                                                                    A                                              and where Select property…
      being the addition of multiple acquisition cohorts.
                                                                    B   Select event…                              and who performed Select event…
Step 2 Create a new Retention Analysis. In the where Cohort = New Users June 2018
      Eventsmodule on the left, set the first event to                                                             and where Select property…
      Purchase Song or Video and the return event also                                                             and who performed Select event…
      to Purchase Song or Video. This setup indicates
      that we will count users as retained if they pur-                                                        3   New Users July 2018
      chase content, and then come back and purchase                                                               where    Cohort = New Users July 2018
      content another time. In other words, this is look-
                                                                                                                   and where Select property…
      ing at retention of activated users.
                                                                                                                   and who performed Select event…
      Step 3 Set up the Segmentation module on the
      right so you’re only looking at new users in this                                                        + Add Segment
      report. To do this, choose to analyze Users who
      performed the [Amplitude] New User event 1
      time, any time during Last 30 days.
                                                                   ..measured by N-Day Retention shown as Retention
      Step 4 Now it’s time to do the analysis. In the
      Measure module, choose to measure N-week
      retention.                                            The setup in Amplitude
75%
50%
25%
                                                            0%
                                                                    Week 0      Week 1      Week 2      Week 3   Week 4   Week 5   Week 6   Week 7       Week 8
New Users May 2018 New Users June 2018 New Users July 2018
                                                                                                                                         Mastering Engagement — 69
      2.5 | Taking action                              See it in action
      engagement and shared examples of how com-       uring out where a significant proportion of new     https://medium.com/@joshelman/
                                                                                                           building-your-growth-model-and-
      panies playing each of the three engagement      users were coming from and redesigning the first
                                                                                                           ladder-of-engagement-3b3a18f2d1a8
      games might build out their ladder. We then      time experience for those users.
      shared several types of analyses that can help
                                                                                                           How AdRoll Drives 97% Customer
      you measure new user activation.                 If you’re wondering what actions you can take       Retention By Helping Customers
                                                       to improve engagement and stickiness of your        Outside the App
      Before wrapping up this chapter, take a moment   product like Blue Apron, that’s coming up next in   Trevor Sookraj, Clearbit
      now to reflect on your learnings. Consider the   Chapter 3.                                          https://blog.clearbit.com/how-adroll-
                                                                                                           drives-97-customer-retention-by-
      following:                                                                                           helping-customers-outside-the-app/
      •   What does onboarding look like for your                                                          5 Habits to Building Better
          product? What percentage of new users                                                            Products Faster
          complete onboarding?                                                                             Hiten Shah, Founder of KISSMetrics
                                                                                                           https://hitenism.com/5-habits-better-
                                                                                                           products/
      •   What does your ladder of engagement
          look like? What is the topmost rung? The               FURTHER READING
                                                                                                           A User’s Manual for Quantifying
          bottommost rung? How many new users
                                                                                                           Qualitative Research
          make it past the bottom rung?
                                                                Three Defining Components of               Airtable
                                                                Authentic Growth                           https://blog.airtable.com/a-users-
      •   What is the first exchange of value that                                                         manual-for-quantifying-qualitative-
                                                                Brian Balfour, Founder & CEO of Reforge
          occurs in your product and how does that                                                         research/
                                                                https://brianbalfour.com/growth-
          relate to yours business model? At what               machine/authentic-growth/
          rungs of your ladder of engagement do you                                                        5 of The Best User Onboarding Examples
                                                                                                           Jackson Noel, Co-Founder/COO of
          also have an exchange of value?                       6 User Onboarding Flow Examples            Appcues
                                                                Shanelle Mullin, ConversionXL              https://www.appcues.com/blog/the-5-
      •   What does retention look like for your                https://conversionxl.com/blog/6-user-      best-user-onboarding-experiences
          activated users?                                      onboarding-flows/
John Cline
                                                                                                                           Mastering Engagement — 71
      The Product Challenge                                     of user pathing and funnel analysis in Amplitude        understanding of the Blue Apron meal experience.
      The primary focus of Blue Apron’s Growth team is to       to investigate the pages consumers were visiting        Using Amplitude, the team learned that its Recipe
      build and consistently refine a digital experience that   before they entered the sign-up flow, he discovered     page was an important component of the digital
      attracts new consumers and deepens engagement             that a significant proportion of people who visited     experience that could help attract new consumers
      with current customers.                                   the Blue Apron Recipes page continued on to begin       to its product. Making the upcoming recipes
                                                                the sign-up process.                                    more prominent on the page has helped improve
      The Solution                                                                                                      conversion by 5.5%.
      The Blue Apron Growth team needed a tool to               “We have a page that lists all of our upcoming
      quickly generate hypotheses about how consumers           recipes. We did not think many people visited this      “We’ve found that Amplitude is very
      were behaving on the digital platform and run             page prior to signing up, but we realized the Recipes   user-friendly. Even someone who is not
      experiments on those hypotheses.                          page actually had a higher percentage of traffic        particularly technical can use Amplitude
                                                                than we expected,” John said.                           to dive into, study, and interpret complex
      Discovering where new customers are coming                                                                        product data. Amplitude helps the Blue
      from using Amplitude                                      In order to take advantage of this insight, the         Apron Growth team own and drive results
                                                                team conducted a full refresh of the Recipes page       for customers.”
      When John Cline, Senior Engineering Manager of            to include sign-up CTAs and display even more                                         WALKER FULLERTON
      Growth/Member Experience, used a combination              recipes for consumers to peruse and gain a better                      Product Manager, Growth, Blue Apron
The Results
                                                                                                               5.5%
•    Using Amplitude, Blue Apron learned that their      “We can now get an early signal from the
     recipe pages were a great way to acquire new        Optimizely Results Dashboard within
     users. Making these more prominent has helped       a few days, which helps empower                       Conversion increase using Amplitude
                                                                                                                                        Mastering Engagement — 73
CHAPTER 03
MAKING USERS STICK
You’ve activated your new users and introduced them to your product’s
engagement ladder. How do you now make sure they continue to see value over
time? In this chapter, we talk more about the engagement loop and the triggers
you can use to engage and re-engage your current users. We also introduce
stickiness as a way to measure your loop. We round out the chapter with a special
case study on how Postmates uses product analytics and timely email campaigns
with Braze to re-engage their customers.
                                                                                    Mastering Engagement — 74
                                                       Why loops matter
      The fastest growing products are                 An important part of the engagement loop is the        To summarize a fantastic article authored by the
      better represented as a system of                journey that new users take from signup to the         team at Reforge[21], thinking about growth as a
      loops, not funnels. Loops are closed             first exchange of value between themselves and         funnel leads to a few major problems:
      systems where the inputs through                 the product. But the journey can’t stop there.
      some process generates more of an                Users have to keep finding the product engaging        •   Strategic silos: Funnels cause us to think
      output that can be reinvested in the             and invest in it for real growth to happen.                about channel distribution, product devel-
      input. There are growth loops that serve                                                                    opment, and monetization separately when
      different value creation including new           But let’s take a step back. Why do we talk about           they should be considered together.
      users, returning users, defensibility, or        engagement and growth as a loop in the first           •   Functional silos: As we mentioned in Chapter
                  efficiency.                          place?                                                     2, often, certain teams “own” certain parts
                  BRIAN BALFOUR
                                                                                                                  of the funnel and the metrics aligned to it.
                  “Growth Loops are the New Funnels”   Historically, when we think about moving users             Problems arise when teams don’t talk to each
                                                       from one stage to the next, we talk about funnels.         other and optimize for only their portion of
                                                       In fact, when we introduced new user activation in         the funnel.
                                                       Sections 2.1 and 2.2, we alluded to the well-known     •   One-directional thinking: Funnels don’t pro-
                                                       AARRR funnel framework from Dave McClure.                  vide a good picture of where outputs can be
                                                                                                                  reinvested back into the product.
                                                       As a model and learning tool, this funnel is a great
                                                       starting point for thinking about product growth       This is why our interaction framework for engage-
     Virtuous loops are the flywheels that             strategy. There’s a wealth of information on how       ment is based on a loop, not a funnel. As we’ll
     convert your users’ engagement into               to set strategy and tactics for each stage, what       see in the next couple sections, the most pow-
     fuel to power your company forward.               metrics to track, and who should be responsible        erful way to grow your user base and re-engage
                                                       for each part of the funnel. In reality, however,      your current users is to create self-perpetuat-
                                                       the product landscape is changing so quickly that      ing loops.
                  SARAH TAVEL
                  “The Hierarchy of Engagement,        growth for most successful products doesn’t
                  expanded”                            actually look like this.
                                                                                                                          [21]
                                                                                                                                 https://www.reforge.com/blog/growth-loops
02 | Aha Moment: The new user finds value in your        Curiosity                                   Value
                                                                                                   exchange              Trigger
product, usually after or during the process of
onboarding in the first few sessions. Usually this
‘aha moment’ is the first rung of your product’s                              05
ladder of engagement. In Chapter 2, we explain
                                                                                  Social
onboarding and the aha moment as the first two                                    proof
phases of new user activation.
                                                                                                                                Mastering Engagement — 76
                                                           Essentially, the engagement loop illustrates two    Depending on what engagement game you’re
                                                           interrelated concepts. The loop as a whole illus-   playing, your engagement loop might look dif-
                                                           trates what needs to happen to drive real growth    ferent. But the most important characteristic
                                                           in new users, as we defined it in Chapter 2. And    of this Loop is that there’s an input that leads to
                                                           the mini feedback loop between value exchange       value being created which results in some output
                                                           and Trigger describes re-engagement of your         that can be fed back into the loop. Thinking about
                                                           current users.                                      your product engagement as a loop—an inter-
                                                                                                               connected system of inputs and outputs—is
                                                                                                               the foundation for building a highly engaging,
          EXAMPLE                                                                                              sticky product.
Attention game:
Instagram’s engagement loop
03 | Value exchange
The new user becomes activated when the first
value exchange occurs: in exchange for entertain-
ment and relevant content, the new user provides
value to the business through ad engagement.
                                                                                                           Mastering Engagement — 78
           EXAMPLE
           Productivity game:
           Dropbox’s engagement loop
           Dropbox is a workspace designed for creative              04 | Triggers: Email campaigns                                  05 | Social proof: Invite collaborators
           collaboration. It brings a user’s files together in one   The new, free user may have to be nudged through                Finally satisfied, a regular user of Dropbox may be
           central location and allows them to sync those            email campaigns or other external triggers to set up            incentivized to invite friends and colleagues, thus
           files across devices. Features like Dropbox Paper,        his devices with the Dropbox app.                               setting the whole loop in motion again.
           document scanner, comments, and version history
           are designed to increase team productivity and            As this new user takes full advantage of Dropbox’s
           decrease busy work.                                       free functionalities, he may convert to a paying user
                                                                     to unlock more features, increase storage space, or
           01 | Curiosity: Receive a Dropbox invitation              collaborate with others. This begins a cycle of value
           An engagement loop for Dropbox might begin with           exchanges.
           a potential user receiving an invitation from a friend
           or a team they need to collaborate with.
           03 | Value exchange
           Since Dropbox follows a freemium model, this new
           user may need to see value several more times and
           climb more rungs of the ladder before he’s activated
           to a paying customer. It’s important to make these
           free features sticky and show value as frequently
           as possible so that conversion happens.
                                                                                                                             [22]
                                                                                                                                    http://www.growhack.com/2012/12/discovering-your-aha-moment/
Transaction game:
Postmates’ engagement loop
Some transaction players monetize entirely on           pays a fee. Through repeated value exchanges,       or push notifications with special deals on a
habit-formation     rather   than   infrequent   pur-   some customers might climb the ladder of            weekly cadence to trigger a new user to place
chases. Ride hailing apps, meal subscription kits,      engagement and sign up for a Postmates Unlim-       another order, thus continuing the cycle of value
and on-demand delivery services, for example,           ited subscription.                                  exchange
are products that serve to fulfill a users’ regular
needs—e.g., getting from point A to point B,            04 | Triggers: Special delivery deals               05 | Social proof: Invite friends
ordering food, buying groceries. Since these trans-     Postmates users probably don’t come back on         After repeated use, the new user may be incentiv-
actional apps depend on frequent purchases, It          a daily basis—the natural cadence of ordering       ized through free delivery credits to reach out to her
makes sense for them to think about their product       groceries online is more likely to be weekly than   network and invite their family and friends to use
in terms stickiness and engagement loops.               daily. Postmates may send promotional emails        Postmates. The whole loop begins again.
03 | Value exchange
The new user becomes activated when the first
value exchange occurs: in exchange for the conve-
nience of on-demand delivery, etc., the customer
                                                                                                                                          Mastering Engagement — 80
                                                  3.2 | An intro to stickiness                                   As Facebook began to tout the DAU/MAU metric,
          TERMS TO KNOW
                                                                                                                 more and more consumer apps also began mea-
                                                  If you’re in the world of product development,                 suring it as a core KPI.
          Stickiness is the frequency with        you’ve probably heard the phrase “sticky prod-
          which a user engages with your          uct”. And you probably know that in this context,              Certainly, building a product around which users
          product. Specifically, it measures      “sticky” doesn’t refer to the uncomfortable phys-              can develop a habit is important to businesses
          the number of days out of a given       ical sensation on your hands. In a product setting,            in every vertical, regardless of the engagement
          time period that a user was active or   “stickiness” has evolved to be synonymous                      game they’re playing. But measuring stickiness
          completed a specific action.            with engaging or addicting. And the prevailing                 as # of days used per month (DAU/MAU) does
                                                  assumption is that stickiness in products is the               not work for every product. As we’ll see in the
                                                  goal—that anyone building products is designing                next section, the stickiness metric is only useful
                                                  them so that the customers stick around.                       if it’s defined in a way that makes sense for your
                                                                                                                 business.
                                                  Well we’re here to deconstruct stickiness as a
                                                  metric and a concept and correct the assumption
                                                  that all products should strive to achieve maxi-               3.2.2 | Stickiness depends on your
                                                  mum stickiness.                                                product usage interval
                                                                                       [23]
                                                                                              https://andrewchen.co/dau-mau-is-an-important-metric-but-heres-where-it-fails/
The first step to measure what healthy stickiness                     Is stickiness the right                         Your product usage interval(24) is the
looks like for your product—and how it compares                       metric for you?                                 frequency (daily, weekly, monthly, etc.)
to other similar products—you need to under-                                                                          with which you expect people to use
stand how customers naturally use your product.                       Sometimes stickiness isn’t the right measure    your product.
You need to calculate your product usage interval.                    of user engagement or delivery of product
                                                                      value. Make sure you know what customer
Your own intuition about your product will help                       pain you’re solving and the business model in
you figure out your product’s usage interval, but if                  place before setting your KPIs.
you’re unsure, we share a framework for how you
can better calculate it with data in Section 3.5.                     Here are 2 examples where tracking
                                                                      stickiness isn’t useful:
[24]
       https://amplitude.com/blog/2016/10/11/product-usage-interval
                                                                                                                                          Mastering Engagement — 82
                                                                3.2.3 | Understanding stickiness                   your users. Some of your users might be slightly
           TERMS TO KNOW
                                                                through your power users                           engaged, while others are power users, but there’s
                                                                                                                   no way to tell these groups apart from a single
           The power user curve or non-                         The DAU/MAU ratio is a useful measure of engage-   number.
           cumulative stickiness depicts the                    ment if your monetization depends on users see-
           proportion of users who were active                  ing value on regular basis with tight engagement   Instead of moving your DAU/MAU number through
           in your product for exactly X number                 loops.                                             haphazard growth hacks, identifying your power
           of days.                                                                                                users and exploring their behavior is a great place to
                                                                A major shortcoming of the DAU/MAU ratio,          start thinking through a stickiness strategy. Luckily,
                                                                however, is that it masks the variability among    the power user curve can help you do just that.
                                                                                                           Mastering Engagement — 84
                                                                 3.3.1 | External triggers                               as well as re-engagement in a number of different
                                                                                                                         ways. Here are a few examples of triggers and the
                                                                 External triggers are things like push notifications,   purpose they serve.
                                                                 emails, ads, and referral incentives that contain a
                                                                 specific call-to-action. A good external trigger        You’ll notice that there are a number of different
                                                                 tells a user what they should do next–this is the       kinds of external triggers you can employ in your
                                                                 stuff that marketing campaigns are made of.             product. In the Section 3.4 we’ll go a little bit into
                                                                                                                         how you can set up a strategy for using the right
                                                                 Used in the right way and in the right place,           external triggers to improve your product’s stick-
                                                                 external triggers can drive new user acquisition        iness and drive that cycle of value exchange.
                                                                          Mastering Engagement — 86
                          3.3.2 | Internal triggers                                       and they become a regular, committed user.
                                                                                          Eventually, the product might become so hab-
                          Internal triggers happen in the mind without                    it-forming that users won’t need external triggers
                          external prompting. According to Eyal, an internal              to keep them coming back.
                          trigger occurs “when a product becomes tightly
                          coupled with a thought, an emotion, or a pre-ex-                Products that successfully develop internal trig-
                          isting routine” [25].                                           gers are ones that create value for the user con-
                                                                                          tinuously; with every value exchange, it becomes
                          The stickiness of attention-grabbing social media               more stressful for users to leave because of that
                          products like Facebook, Twitter, Instagram now                  loss of value they would experience. Compa-
                          run almost entirely on internal triggers.                       ny-wide B2B software like G Suite and Jira are
                                                                                          great examples of this. When an entire company
                          Users don’t need prompting to open up these                     invests time and resources into learning the soft-
                          apps–we’re cued by our emotions or thoughts,                    ware, it becomes incredibly difficult to leave the
                          to the point that using these apps feels like a part            product, even if there seems to be a better alter-
                          of our natural routine. Our brains have come to                 native. The product has successfully achieved
                          crave the feeling of fulfillment and reward that                stickiness.
                          accompany using these products.
                          Some examples of how products use internal                      3.4 | Set your product
                          triggers are:                                                   stickiness strategy
                          •   Browsing Facebook when you feel lonely                      As we’ve seen in the previous section, there are
                          •   Checking Twitter first thing in the morning                 different types of triggers you can build at differ-
                              after waking up                                             ent points in your product’s engagement loop.
                          •   Checking your email when you feel anxious                   Perhaps even more importantly, there are ways
                          •   Posting on Instagram when you want to                       to build your product as a whole for better value
                              capture memories                                            delivery and, ultimately, better engagement and/
                          •   Playing Spotify while working                               or stickiness.
                          Products start out with external triggers to ini-               How do you know where to invest your time and
                          tially attract and educate the user. Over time, as              money so that you get the most return on your
                          users invest more time and energy engaging with                 investment while also continuing to delight your
                          the product, it becomes a part of their lifestyle               users?
                                                                                 [25]
                                                                                        https://www.nirandfar.com/2012/04/billion-dollar-mind-trick.html
[26]
       https://medium.com/@sarahtavel/how-to-create-a-sticky-product-like-facebook-and-evernote-2b47627fce3a
                                                                                                                          Mastering Engagement — 88
                                                    What devices do your users use? Are you seeing      In Section 3.5, we will outline how to find your
          TERMS TO KNOW
                                                    higher engagement on mobile versus web? On          user personas and analyze their stickiness in
                                                    iOS or Android? These differences can give you      more detail.
          A product’s critical event is an action   a clue as to what kinds of external triggers to
          that users take in your product that      test first—mobile push notifications and versus     What habits can you tap into? Think about where
          aligns closely with the value you         something else, for example.                        your product fits into your user’s life. Can you
          want your product to deliver. When                                                            leverage routines or internal triggers they may
          measuring engagement metrics like         Who are your users? This is the broadest but also   already have to nudge them into re-engaging
          retention and stickiness, it is more      the most important question you can ask before      with your product? For example, if you’re a meal
          valuable to look at the users who         and during product development. Who exactly         delivery service, sending a timely push notifica-
          perform this critical event as your       are your users? What do they care about? What       tion about a new restaurant might bring a user to
          pool of “active users,” as opposed to     pain are you solving for them? How well do you      open up your app during lunchtime. We will see an
          users who do any arbitrary action.        know your users today? You can begin to uncov-      example of this in our case study with Postmates
                                                    er user personas through interviews, surveys,       and Braze at the end of this chapter.
          The critical event is also usually        and other qualitative means. You can also use a
          closely tied to the value exchange in     clustering algorithm on your existing user base
          your product.                             to identify behavioral personas—groups of users     3.5 | Measuring stickiness
                                                    who use your product and get value from it in       in Amplitude
                                                    distinctly different ways. For example, Instagram
                                                    users might fall into two behavioral personas:      Here in the last section of this chapter, we will
                                                    “content creators” who upload photos and use        cover the analyses you can perform to under-
                                                    hashtags, and “content viewers” who spend most      stand your product’s stickiness.
                                                    of their time viewing others’ photos and Stories
                                                    and “liking” content.                               As you do these analyses, keep in mind that stick-
                                                                                                        iness, retention, and conversion are different
                                                    Once you’ve identified personas in your prod-       dimensions of understanding user engagement.
                                                    uct, you can analyze which personas retain          Stickiness should not be examined in a vacuum;
                                                    better and use the product more frequently.         it’s part of a broader tapestry of metrics you should
                                                    From there, you can begin to think about which      measure and monitor. Otherwise, it becomes
                                                    external triggers you can use to engage each        too tempting to try to “game” stickiness with a
                                                    persona or whether it might be worthwhile to try    ton of push notifications or clickbait emails. Also,
                                                    to nudge users of one persona to behave more        remember that healthy stickiness depends on how
                                                    like another.                                       often your product realistically should be used:
                                                                                                        e.g. a tax product that is used once per year vs. a
                                                                                                        meditation app that might be used daily or weekly.
                                                                                                              + Add Segment
3.5.1 | Finding your product’s
usage interval
                                                                                                             ..grouped by Select property…
How often do people naturally engage with
product? It’s important to know this so that you
can benchmark and analyze your stickiness and
retention metrics appropriately. Keep in mind
that not all products are daily-use.                                                 Retention View      Usage Interval View
                                                                                                                                     Mastering Engagement — 90
      Takeaway
      The usage interval curve shows that roughly 50% of
      users play content with a median frequency of 1 day;
                                                                   AmpliTunes
      about 70% with a median frequency of 4 days. The
      usage interval of AmpliTunes is most likely around           AmpliTunes Usage Interval
      1-4 days.
                                                                   Daily, Last 30 Days                                                                              Usage Interval
      For an in-depth look at calculating the product
      usage interval, see Chapter 2 of our first product
      analytics playbook, Mastering Retention.
                                                                 100%
75%
50%
25%
                                                                   0%
                                                                                                                      s          s          s         s         s         s         s
                                                                               ay
                                                                                 s
                                                                                        ay
                                                                                          s
                                                                                                 ay
                                                                                                   s
                                                                                                          ay
                                                                                                            s
                                                                                                                   day        day        day       day       day       day       day
                                                                            0d       3d       6d       9d       12         15         18        21        24        27        30
All Users
You should think about measuring stickiness in                                               and who performed Select event…
terms of:
• general usage stickiness: How many days                                                2   Favorite Song or Video >=10
    out of a week or month did users do anything                                             who performed Favorite Song or Video   >=   10 times
    in your product?
                                                                                               anytime during Last 30 days
• critical event stickiness: How many days
    out of a week or month did users do an action                                            and where Select property…
    that gets to the core value of your product?                                             and who performed Select event…
The first type of stickiness looks at the metric in                                      3   Post Community Content
terms of any kind of activity while the second type
                                                                                             who performed Post Community Content >=       5   times
of stickiness looks at a specific, important action
that you’d want highly engaged users performing                                                anytime during Last 30 days
in your product.                                                                             and where Select property…
                                                                                                                               Mastering Engagement — 92
           PRO TIP
      Step 1 In Amplitude, create a new stickiness          STEP 3 Calculate weekly cumulative stickiness.                          For example, over 75% of content creators
      chart and choose to view the stickiness of the        This will show the the proportion of users who                          played a song or video for four or more days per
      critical event (Play Song or Video).                  did the critical event—Play Song or Video—on                            week, compared to only about 60% of content
                                                            ‘n’ or more days per week.                                              favoriters. If playing content is critical to driving
      STEP 2 In addition to looking at all of your users,                                                                           the value exchange cycle in your product, then a
      segment your users by those who favorited a           Takeaway                                                                potential next step would be to think about what
      song or video multiple times and those who            Comparing our two personas, we see that a                               triggers you can use to get more users to post
      posted community content multiple times within        greater proportion of content creators play a song                      community content.
      the last month.                                       or video on any given number of days per week.
                                                                                                                      [27]
                                                                                                                             https://amplitude.zendesk.com/hc/en-us/articles/235648588-Personas
                                                                                                                   Mastering Engagement — 94
       Takeaway
       Note that there’s a slight “smile” to this curve
       because of the uptick at around 20 days. This means           AmpliTunes
       there is a small, but highly engaged proportion of
       users who are coming back everyday for roughly 20             Power User Curve
       days to play content in AmpliTunes. The next step
       would be to figure out what these power users are             Monthly, Last 3 Months                                                                                     Stickiness
       doing differently from other users, so you can drive
       more users to act like them.
                                                                   100%
75%
50%
25%
                                                                    0%
                                                                                                                           s          s          s         s         s         s          s
                                                                                 ay
                                                                                   s
                                                                                           ay
                                                                                             s
                                                                                                     ay
                                                                                                       s
                                                                                                               ay
                                                                                                                 s
                                                                                                                        day        day        day       day       day       day        day
                                                                             0 d       3 d       6 d       9 d       12         15         18        21        24        27         30
All Users
One way to develop stickiness strategy is to         Once you’ve created a power user curve in
hypothesize what your power users do differ-         Amplitude, you can build a cohort of users
ently than other users. You can do this through      straight from the stickiness chart. Use Ampli-
qualitative research and path analysis of specific   tude’s Cohort Comparison tool quickly see what
user groups. (We mentioned these analyses in         the differences are between your “Power Users”
Chapter 2 in the context of new user onboarding      cohort and your “Active Users” cohort.
and activation; they can also be applied here.)
                                                                                                      Mastering Engagement — 96
      Takeaway
      Cohort Comparison shows you the proportion of
      users in each cohort who perform certain actions
                                                                 AmpliTunes
      in your product. It’s a good way to easily spot
      differences between cohorts and begin to develop           Power User Curve
      hypotheses about their behavior. In this example,
      you can see that 4x as many power users added              Monthly, Last 3 Months
      friends or posted community content than other
      active users. You might then begin digging into
      whether it’s worth revamping AmpliTunes’ social
                                                               100%
      features–making them more visible might make
      more users behave like power users.                                                                                                   21 Days
                                                                                                                                              All Users: 4.40%
                                                                75%
Create Cohort
                                                                 0%
                                                                                                                        s           s          s
                                                                             ay
                                                                               s
                                                                                      ay
                                                                                        s
                                                                                                 ay
                                                                                                   s
                                                                                                           ay
                                                                                                             s
                                                                                                                    d ay        d ay       d ay
                                                                          0d       3d         6d       9 d       12          15         18
All Users
                                        Adoption                    Engagement
                                   % of users did event       Avg event count per user
! Search Results
Showing 29 events
                                                                                                                  Mastering Engagement — 98
          FURTHER READING                             3.6 | Take Action
                                                                                                                 Andrew
                                                                                                                 Touchstone
We’ve introduced a new model and frameworks for building engaging products.
In this final chapter of Mastering Engagement, we introduce the tools you
need in order to do so.
In 2005, “online” was a new acquisition channel, now it’s the product
                                                                                                                    [28]
                                                                                                                           https://amplitude.com/blog/2017/05/18/analytics-stack
[29]
       https://www.sec.gov/Archives/edgar/data/1018724/000119312518121161/d456916dex991.htm
                                         BEST PRACTICES
                                         Setting Up Your Engagement Stack
DO DON'T
                                           •    Choose tools that do one or a couple of things      •   Go for solutions that promise to do a hundred
                                                really really well.                                     things mediocrely.
                                           •    Choose tools that allow you to move data in         •   Choose tools that are closed off and can’t work
                                                and out easily, thus enabling interoperation            in an ecosystem with other tools.
                                                with other engagement software.                     •   Choose tools that require endless configuration
                                           •    Choose tools that democratize data for                  and hacking to get work done.
                                                all teams.                                          •   Jump to using the coolest new technology
                                           •    Consider choosing tools that are known to be            without proper vetting–you don’t want to risk
                                                reliable and built by experienced teams                 an integral layer of your engagement stack
                                                                                                        suddenly going out of business.
                                           •    Think through the order of implementation for
                                                your stack.                                         •   Drink a seller’s Kool-Aid and jump to
                                                                                                        implementing the most interesting tool.
                                           •    Have a serious conversation about business
                                                objectives and priorities.
                                                        Product Analytics
                                                        If you’re reading this playbook, then you probably
                                                        already have some idea of the value of product ana-
                                                        lytics. Building an engagement stack requires that
                                                        you have not just data, but the means to get the
                                                        insights that help you build an engaging product.
                                         Another key value proposition of a product                      Attribution tools that can also do deep linking are
                                         analytics platform like Amplitude is unifying dif-              useful for actually leveraging that data to point
                                         ferent data streams into a single source of truth.              users to specific content on the web or in a mobile
                                         Not only do businesses care about bringing user                 app [31].
                                         data into their systems, but also sending data
                                         out to marketing vendors.                                       An attribution layer lets you immediately assess
                                                                                                         how a user arrived in your product, where they
                                         When we asked Austin Hay about why analytics                    came from, and all of the other information that
                                         should be a core part of anyone’s engagement                    can help you distinguish them, even when the
                                         stack, he said, “It’s a two-fold thing. It’s [the abil-         path into your product is a complex, multi-chan-
                                         ity to understand] one, what marketing-based                    nel journey.
                                         behaviors and actions can we take off this fun-
                                         nel, and two, what qualities about the product
                                                                                           [30]
                                                                                                  https://amplitude.com/blog/introducing-the-amplitude-growth-engine
                                                                                                                            [31]
                                                                                                                                   https://branch.io/what-is-deep-linking/
Our recommended A/B Testing tools:                     Many of the “external triggers” that we mentioned
• Apptimize                                            in Chapter 3 as tactics for re-engagement can be
• Optimizely                                           delivered through marketing automation tools.
• Taplytics
                                                       Our recommended Marketing Automation tools:
Marketing Automation                                   • Braze
In the previous chapters, we talked about how          • Leanplum
to measure and build for in-product engage-            • Urban Airship
ment. A good engagement stack also includes a
marketing layer to engage users outside of the
product.
                                         •   Start by performing a sprint-like runthrough         It is best to start documenting early and make
                                             of all the tools in your stack.                      sure there’s a process in place to keep your docs
                                         •   Allow people to play around with the more            updated. Some tips:
                                             intuitive tools to spark curiosity.                  • Keep nomenclature consistent by creating a
                                         •   Set parameters and goals around usage of                  spec sheet for all the data points you want to
                                             the tools for the first few weeks.                        capture at the very beginning.
                                                                                                  • Include in your spec sheet: what tools you’re
                                         Reyneke describes one example workflow, "For                  using; how and why they were implemented;
                                         Braze and Amplitude, we would recommend                       which tools are sending data where.
                                         every week sitting in Amplitude, looking for             • Assign someone to maintain the spec sheet.
                                         insights, and setting a KPI that you want to             • Update the spec sheet every time a change is
                                         try to move the needle on for the week. Then,                 made to the stack.
      A                                                    value you want your product to deliver. When          you accomplish deeper segmentation on your
      Activation is a point or phase at the end of         measuring engagement metrics like retention           events and the users who perform them.
      Onboarding during which a new user obtains           and stickiness, it is more valuable to look at the
      enough value from the product such that they         users who perform this critical event as your         external trigger: Specific sensory stimuli that
      become a current active user of the product.         pool of “active users,” as opposed to users who       companies/products use to nudge users into
                                                           do any arbitrary action. The critical event is also   taking action.
      An acquisition cohort is a group users who start-    usually closely tied to the value exchange in your
      ed using your product (in other words, were new)     product.                                              F
      during the same time period.                                                                               First value exchange is the first exchange of
                                                           A customer-value exchange describes the               value between a new user and the business.
      An aha moment is the moment or set of actions        potential value that products deliver to custom-
      within your product that leads users to first dis-   ers in exchange for the customer’s investment of      I
      covering value.                                      time and money.                                       internal trigger: Feelings and emotions that
                                                                                                                 manifest in the mind and cue users to take action
      attention game: In the three games of engage-        E                                                     on their own.
      ment framework, products playing the attention       Engagement is a measure of how much or how
      game try to maximize the amount of time users        often users interact with your product or with a      instrumentation: The process of recording
      spend in-product. Industries that typically play     feature.                                              events and attributes as they happen in your
      this game today are media, gaming and any com-                                                             product.
      pany displaying advertisements to you.               An engagement loop is an interaction framework
                                                           describing the actions and triggers that current      K
      B                                                    engaged users cycle through when they use your        A KPI, also known as a Key Performance Indicator,
      bracket retention: A flexible version of N-day       product regularly.                                    is a measurable value that demonstrates how well
      retention where you can look at the proportion                                                             an organization is achieving its current objective.
      of users who return during custom time frames        event: In event-based analytics, an event is an
      that you define.                                     action performed by the user or taken by the          L
                                                           product.                                              The ladder of engagement is the ongoing
      C                                                                                                          learning journey a new user embarks on to
      A product’s critical event is an action that users   Event Segmentation (Amplitude chart): In              become an expert.
      take in your product that aligns closely with the    Amplitude, the Event Segmentation chart lets
111 — Glossary
A leading indicator is a value or measurement           product analytics: The application of data and       retention curve: A line graph depicting user
that can be used to indicate future business            analytics to detect patterns of usage and identify   retention over time. It shows the percentage of
outcomes. Good north star metrics are leading           opportunities for product improvement in order       users who return to the product during a speci-
indicators of success. On the other hand, metrics       to improve business outcomes and solve cus-          fied time period after acquisition.
like ARPU and monthly revenue are lagging indi-         tomer pain points.
cators.                                                                                                      retention lifecycle framework: a framework
                                                        Your product usage interval is the frequency         for analyzing retention depending on whether
N                                                       (daily, weekly, monthly, etc.) with which you        a user of your product is new, current, or resur-
N-day retention: Retention method that mea-             expect people to use your product.                   rected.
sures the proportion of users who are active in your
product on a specific Nth day after an initial event.   productivity game: In the three games of             S
                                                        engagement framework, products playing the           Social proof is the phenomenon wherein a large
A north star metric defines the relationship            productivity game create an easy and reliable        group of people conform to each others’ behav-
between the customer problems the product               way to complete an existing task or workflow         iors and actions. If users of your product get their
team is trying to solve and the revenue the busi-       for the user. This game is predominant in busi-      friends and acquaintances to also become users,
ness aims to generate by doing so.                      ness-to-business software.                           this can be a point of social proof for you.
O                                                       properties: User properties and event prop-          Stickiness is a measure of the frequency with which
An OKR, also known as Objectives and Key                erties can give you a deeper analysis into           people use your product; specifically, a measure of
Results, is a framework for defining and tracking       how users are engaging with your app. User           the number of days out of a week or a month that a
company, team, or personal objectives.                  properties are attached to users and reflect         user was active, or did a specific action.
                                                        the current state of the user at the time of the
Onboarding is a series of steps within your prod-       event while event properties are attached to         Stickiness (Amplitude chart): In Amplitude, the
uct designed to show new users how they can             events and reflect the state of the event that       Stickiness chart lets users plot cumulative stick-
use the product to obtain value.                        was triggered.                                       iness, non-cumulative stickiness, and stickiness
                                                                                                             over time.
P                                                       R
The power user curve or non-cumulative stick-           Retention is a measure of how many users return      T
iness depicts the proportion of users who were          to your product over time after some initial event   three games of engagement: A framework
active in your product for exactly X number of days.    (usually first use).                                 for thinking about your product’s engagement
113 — Glossary
THANK YOU FOR READING
MASTERING ENGAGEMENT!
We hope this installment of the Product Analytics Playbook series gave you a good foundation
for building products that engage and deliver value to your users. We wrote this to help you
measure and improve product engagement through best practices, frameworks, and models
that we believe in and use ourselves here at Amplitude.
How are you using this content to build better products in your own team or organization?
We’d love to hear from you with questions, comments, epiphanies, or just a ‘hello’.
Email us at playbook@amplitude.com.
Also by Amplitude
This book distills the industry’s best proven methods   Really excited to see this book come out from the
into a clear, practical framework on which companies    folks at Amplitude. They’ve developed a repeatable
at any stage can take immediate action–it’s a must      framework for analyzing retention that can be
read for product and growth teams.                      adapted to any web or mobile product. Highly
                                                        recommend for product and growth teams working
JULIE ZHOU – Director of Product at Adroll,             on retention and engagement.
formerly Lead PM of Growth at Yik Yak
                                                        NIR EYAL – The Wall Street Journal best-selling
                                                        author of Hooked: How to Build Habit-Forming Products
Read this Playbook online:                              Find more great content from Amplitude at
amplitude.com/mastering-engagement                      amplitude.com/content-library