Jamie Quint - Retention Is King
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Transcript of Jamie Quint - Retention Is King
![Page 1: Jamie Quint - Retention Is King](https://reader030.fdocuments.net/reader030/viewer/2022021419/586f9f5b1a28abcc238b63cd/html5/thumbnails/1.jpg)
Jamie Quint CEO, Co-Founder
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Retention vs Virality
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What is Virality - K Factor
i = number of invites sent by each customer c = conversion rate of those invites
k = i*c
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Virality
Cumulative
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Retention
Cumulative
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Equal Retention & Virality
50% - First Week
90% - Second Week
95% - Third Week
98% - 4+ Weeks
k = 0.5 - First Week
k = 0.90 - Second Week
k = 0.95 - Third Week
k = 0.98 - 4+ Weeks
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Equal Retention & Virality
88k Total Users 44k Retention
44k Virality
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Higher Virality
50% - First Week
90% - Second Week
95% - Third Week
98% - 4+ Weeks
k = 0.6 - First Week k = 0.90 - Second Week
k = 0.95 - Third Week
k = 0.98 - 4+ Weeks
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Higher Virality
110k Total Users 53k Retention
57k Virality
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Higher Retention
60% - First Week 90% - Second Week
95% - Third Week
98% - 4+ Weeks
k = 0.5 - First Week
k = 0.90 - Second Week
k = 0.95 - Third Week
k = 0.98 - 4+ Weeks
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Higher Retention
125k Total Users 65k Retention
60k Virality
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High Retention > Low CAC
Scenario Total Users
Base Case 88,000
Higher Virality 110,000
Higher Retention 125,000
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When does virality win?
k > 1?
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Not so fast…
k > 1?
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High Virality + Low Retention
k = 1.4
Low Retention
Hypergrowth??
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Hypergrowth with a nasty hangover
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Retention is King Only focus on virality when retention is high and stable!
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Applications in Paid Acquisition
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Sample Subscription Business
Monthly Subscription $20
Monthly Retention 80%
Customer Lifetime Value $100.00
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Assuming a CAC of $100
Monthly Subscription $20
Monthly Retention 80%
Customer Acquisition Cost $100.00
Customer Lifetime Value $100.00
Return on Ad Spend (ROAS) 100%
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20% Lower CAC and 10% Lower Retention
Monthly Subscription $20
Monthly Retention 72%
Customer Acquisition Cost $80
Customer Lifetime Value $71.45
Return on Ad Spend (ROAS) 89%
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20% Higher CAC and 10% Higher Retention
Monthly Subscription $20
Monthly Retention 88%
Customer Acquisition Cost $120
Customer Lifetime Value $166.67
Return on Ad Spend (ROAS) 139%
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High Retention > Low CAC
Scenario ROAS
Base Case 100%
20% Lower CAC 10% Lower Retention 89%
20% Higher CAC 10% Higher Retention 139%
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Retention is King Focus on Long Term ROAS not vanity metrics like CPA!