Retention Strategies Flashcards

What is 'negative churn' and what does it indicate about a business?

Answer: When expansion revenue from existing customers exceeds revenue lost from churned customers

Negative churn means the business grows revenue from its existing customer base even after accounting for all losses, a sign of strong product-market fit and upsell effectiveness.

A subscription app sends push notifications daily but open rates decline each week. What is the most likely cause?

Answer: Notification fatigue from irrelevant or excessive messaging

Notification fatigue occurs when users receive too many or irrelevant notifications, causing them to ignore or disable them, reducing engagement over time.

What is the relationship between Customer Effort Score (CES) and retention?

Answer: Lower effort scores (easier experiences) correlate with higher retention and loyalty

CES measures how easy it is to use a product or resolve issues; lower effort experiences reduce frustration and friction, directly improving retention.

Which strategy is most effective for retaining high-value B2B customers during contract renewal?

Answer: Conduct a Business Review (QBR) showing ROI achieved and align on next-year goals

Quarterly Business Reviews demonstrate quantified value delivery and build strategic alignment, making renewal a natural outcome rather than a negotiation.

A growth team wants to increase retention by improving 'product stickiness.' Which feature type should they prioritize building?

Answer: Network effect features where the product becomes more valuable as users add data or connections

Features that create network effects or accumulate user-specific data (like history, contacts, or customizations) increase switching costs and make the product harder to abandon.

What is 'reverse trial' onboarding and how does it improve retention?

Answer: Starting all users on the premium tier and downgrading them after a trial period

Reverse trials let users experience full product value upfront, making the downgrade to free tier feel like a loss, which increases conversion and retention through loss aversion.

Which of the following best describes a 'jobs-to-be-done' (JTBD) framework applied to retention?

Answer: Understanding the functional and emotional tasks customers hire a product to accomplish, to ensure ongoing value delivery

JTBD identifies the underlying goals customers want to achieve; retention improves when the product continuously delivers against those core jobs better than alternatives.