When you provide a solid user experience, you keep people coming back to your product. This is an essential part of building a stable business. Not only is retaining current users substantially cheaper than acquiring new ones, but it also provides predictable recurring revenue and looks attractive to investors.

The best way to keep customer acquisition costs down is to retain the customer base you have by any means— acquiring new customers costs 5-25x more than keeping them. Also, the biggest risk window is the customer’s first 90 days of using your product. New users need to see proof that your product is worth their money. Fight churn early by investing in the onboarding experience.

Some types of products experience more churn than others. For example, the average annual churn rate for a DevOps tool is 19.8%, but for a productivity tool, it’s 40.7%. Because some degree of churn is inevitable, be sure to consider what is normal for your industry.

Churn quietly destroys revenue. If users drop off before generating value, you’re paying for acquisition without ever getting a return on your investment. Investing in UX early on in the lifecycle can help prevent this drop off. This results in a more efficient business: lower acquisition pressure, higher margins, and more predictable recurring revenue.

Patrick McKenzie created a bingo card generator for teachers to use as a learning aid in their classrooms. The tool was supposed to be quick and easy to use, allowing teachers to create these cards in seconds.

He set up funnel analytics to track users’ progress:

As you can see, there were significant drop-offs at the Customize and Schedule Print stages. Patrick thought many users were unaware of how little time the process should take and abandoned it after assuming it would be overly complex.

He added a visible progress indicator dividing the process into 3 steps: Create Word Lists, Style Cards, and Print. He also changed the styling flow so that users could move forward without changing the default settings, hiding customization options on an advanced settings page.

Setting expectations. The progress indicator enhanced the onboarding experience by helping new users realize that card creation was intended to be quick.

The bingo card creator is a free tool, but it’s easy to visualize a similar impact on a paid one. Imagine you have an analytics tool with a 33% annual churn rate, which is close to average per Focus Digital’s research. You invest in the onboarding experience and reduce the churn rate by 8% just like the bingo card generator.

If the median LTV of a customer is $29,400 (using the same research), you will have earned $117,600 more by retaining those customers.

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