The SaaS Retention Guide
Why We Keep Things
Great products become routines.
Retention is how you influence…
How do I know adoption is the problem?
A user who tries your product—then leaves forever—is just a temporary win.
True retention means users have made your product a part of their daily routine.
Why Most Products Leak Users
Many companies celebrate sign-ups and first-time users, pouring resources into acquisition. Then their users slip away silently.
They're focused on getting users in, not keeping them around. Even worse, they're focused on making users happy rather than successful. Research shows there's actually no correlation between customer satisfaction and customer retention.
What matters is results.
The Psychology of Staying
We're creatures of routine, all of us. Not just in obvious ways—like checking email first thing—but in the subtle rhythms of daily life.
Our brains are wired to stick with what works and abandon what doesn't. It's an efficiency mechanism that's evolved over millennia.
This is the same psychological mechanism that drives your product's retention.
Core Retention Principles
The three fundamental laws of customer retention, discovered through extensive research by Greg Daines, explain how retention really works:
FIRST LAW: Customers Stay to Get Results
It's not about satisfaction - it's about success. Research shows virtually no correlation between customer happiness and retention. What matters is whether customers are achieving measurable results that matter to them.
SECOND LAW: Customers Get Results Because They Change Their Behavior
Technology alone doesn't produce results. If customers get your product but don't change anything about how they work, they won't see benefits. Success comes from changing behaviors and processes in ways that leverage your product.
THIRD LAW: Customers Change Because They Know Why and How to Change
Two things must be true for customers to change their behavior:
They need clear motivation (the "why")
They need clear direction (the "how")
Without both pieces, change doesn't happen and results don't follow.
This means the key to retention isn’t building more features or providing better support. —It's helping customers:
Define clear, measurable results they want to achieve ✓
Understand exactly what behaviors will get them there ✓
See why these changes matter to their success ✓
Retention Techniques You Can Steal
Quick Wins
Give users a meaningful success in their first session. Not a tutorial completion—an actual result they care about.
Example: Canva lets you create a beautiful design in minutes, even if you've never designed before.
Success Path / Progress Bar
Map out the exact steps between sign-up and success. Then remove everything else from the first-time experience.
Example: Calendly focuses solely on creating your first scheduling link before introducing other features.
Awesome Default
Make the default experience so good that customization feels optional, not required.
Example: Notion's templates are so good that many users never create their own formats.
Trigger a Return
Create a reason to come back tomorrow. Plant the seed in today's session.
Example: Duolingo's streak system makes tomorrow's session feel pre-committed.
Community Lock-In
Make the product more valuable with every person who joins their instance.
Example: Slack becomes more valuable as your whole team adopts it.
Measuring Retention
Here's something counterintuitive: customers who've had negative experiences (like submitting support tickets) often stay longer than those who haven't.
This isn't because problems make them stay - it's because engaged customers who are committed to getting results will naturally encounter and work through challenges.
It’s the survivorship bias of software sales.
To focus on retention, start measuring:
Daily Active Users (DAU)
Are people coming back regularly?
Monthly Active Users (MAU)
How many stick around longer term?
Cohort Retention
How do different user groups retain?
Feature Adoption
Which capabilities drive retention?
Time to Value
How quickly do users get their first win?
The Real Reasons for Churn
Understanding retention starts with understanding why customers actually churn.
Here are the core drivers:
Poor Fit From the Start
Some customers simply can't succeed with your product. But before blaming sales or marketing, ask: "Have we clearly defined what makes a customer capable of success?"
As Daines notes, "If a customer is capable of winning - if they are in the right business, and can get at least some results - then they are a fit."
No Clear Results Strategy
Success requires more than just using the product—it requires knowing what success looks like. Customers need:
Clear expected results
Ways to measure those results
A plan to achieve them
Missing the Total Solution
Customers need everything required to succeed, not just your core product. Often we sell them what they ask for instead of what they need to achieve their goals.
Lack of Behavior Change
"Technology doesn't produce results. Behavior change produces results, and technology makes it possible and scalable."
The most critical period is onboarding, but behavior change matters at every stage. Training someone to use features isn't enough—they need to change how they work.
Invisible Results
Here's a surprising truth: measuring results matters even more than achieving them. Customers who measure their progress—even when results are modest—retain at dramatically higher rates than those who don't.
Stagnant Progress
Daines calls this "Customer Velocity." Even successful customers will eventually churn if they can't see a path to better results. This isn't about competitors—it's about continuing to expand what's possible.
The Path to Retention
The key to retention isn't making customers happy—it's making them successful. And success requires:
A clear vision of desired results
The complete toolkit to achieve those results
Support for genuine behavior change
Visible progress and momentum
Focus on these fundamentals, and retention follows naturally.