The Hierarchy of Engagement, Expanded (Sarah Tavel)

Author: Sarah Tavel (Benchmark) URL: https://medium.com/@sarahtavel/the-hierarchy-of-engagement-expanded-648329d60804 One-line: Tavel’s three-level framework for consumer products — engaged users completing the core action, retention through accruing benefits and mounting losses, and a self-perpetuating loop that makes the product better as more people use it.

Key claims

• Level 1 — engaged users: focus on the cohorts completing the core action, not cohorts in general.
• Level 2 — retention: accruing benefits (the more I use it, the better it gets) and mounting losses (the more I use it, the more I lose by stopping).
• Level 3 — self-perpetuating: a virtuous loop that drives growth; social networks get more valuable with more users, whereas Evernote grows and retains but has no loop that improves it with scale.
• Finding your core action: top-down (what you think matters strategically) meets bottom-up (which actions predict a propensity to return). Kyle also sat in on Tavel’s related webinar. Two of her charts are archived below.

Notable quotes

• Read Sarah Tavel at Benchmark article, “Hierarchy of Engagement, Expanded” - https://medium.com/@sarahtavel/the-hierarchy-of-engagement-expanded-648329d60804 and sat in on related Webinar from Sarah Tavel
  • “Maximize your chances of building a $1B+ business”
  • 
  • Engaged Users
    • Focus on “completing the core action”
  • Retaining Users
    • Accruing benefits
      • “The more I use the product the better it gets.”
    • Mounting losses
      • “The more I use the product, the more I have to lose if I stop using it.”
  • Selp-Perpetuating
    • Creating a virtuous loop that drives growth
      • E.g. social networks become more valuable as more people use them
      • Evernote does well in growing and retaining users, but doesn’t have a feedback loop that makes it better as more users are using it
  • 
  • Metrics to evaluate:
    • Not just looking at cohorts, but specifically the cohorts who are “completing the core action”
  • Is there an exercise to find your core action?
    • The top down analysis of strategically what you think is important
    • The bottom up analysis of what actions drive a propensity to return to the tool

How it connects

• Sarah Tavel
• Benchmark
• Retention
• Network Effects
• Product-Market Fit
• Evernote