Thoughts on Growth — Mar 30, 2018

Thoughts on Growth is Reforge's weekly newsletter of must-known updates and perspectives in growth. By subscribing, you'll join a few thousand PMs, marketers, UX folks, engineers and analysts at today's top tech companies. Check out today's edition below.

1. Do you need to worry about GDPR?

User trust has always been important, but it's about to be vital.



With the EU's General Data Protection Regulation just a handful of weeks away (it goes into force on May 25), companies now need to get explicit consent from their European users — or otherwise prove that they have “legitimate business interests” (subject to interpretation) — before they collect and use personal information in their products and marketing.

The penalty is “up to €20 million, or 4% of the worldwide annual revenue of the prior financial year, whichever is higher.”

1. Who needs to worry about it?

Any company that is collecting data and/or personal information on users who are EU citizens — regardless of where your company is located, and even if you're not explicitly targeting EU users in your acquisition marketing.

GDPR applies to you if:

  • Your company uses behavior tracking, experiment testing, or CRM tools to monitor EU user activity and / or store those users' details
  • Your company uses lead gen forms to collect contact information in order to run email campaigns with European users
    • Example: You have a lead form with an offer to download a whitepaper, and also automatically opts the user in to your email marketing list.
    • After GDPR: You'll need to include an option for users to give explicit consent (by taking a physical action like ticking a box) in order to send them those marketing emails.
  • Your company runs referral programs where users are providing other people's personal information
    • Example: Your “refer your friends” program asks users to enter their friends' email addresses, and then adds those friends to your email marketing list.
    • After GDPR: You can still send a notification-style email to the referred user, but you can't automatically add them to your email list, or store and use their personal info for other purposes (like Lookalike audiences).

2. Whose day to day jobs will be most affected?

  • Email marketers
  • Marketing automation folks
  • People on your PR, legal, and IT teams

3. What you need to do instead

  • You need to get explicit consent via a physical action (and keep a record of it). No shady pre-checked checkboxes or hidden language.
  • You can't gather an email or other personal data for one purpose, and then later use it for another purpose.
  • If someone has opted out (via an unsubscribe or otherwise) of your emails, you can't keep using that email for any purpose — whether it's a “resurrection” initiative later on, or retargeting, or any type of data sharing.
  • To continue operating products and campaigns that are personalized for your user, you need to work to earn their trust up front (now harder than ever against the backdrop of constant data breaches and abuses).


We pinged a couple of folks in our network to get a broad spectrum of perspectives on this hefty issue.

ED BURROWS, Growth @ Phiture, former Growth Marketing @ SoundCloud:

One of the most important factors here would be how GDPR affects viral loops.

When an app relies on on a referral system where a system-generated invite is triggered by a user wanting to invite peers, this could be quite problematic.

That's because some form of personal data will be required to send the invite (either an email or a phone number), and the referred user will not have given their consent for their data to be used in this way.

Given that these referral loops are such a core part of many growth strategies it would be one of the most pertinent issues to highlight.

And a note on who needs to worry — keep in mind that just because a site/app is accessible globally does not mean that it would have to comply. There are going to be nuances here such as having a mobile app available in a country specific store etc.

A caveat to the above is that if you track EU users, even if you have not specifically targeted them, then you must also comply.

Until case law establishes a clear boundary it's hard to know precisely how the courts would rule in terms of an EU person being targeted by a company in the US or elsewhere, which is why it is imperative that every company should make a decision on this with their own legal counsel.

ANDREW MICHAEL, Experience Team Lead @ Hotjar:

By allowing people to access, rectify & delete their own data, companies will now be a lot more accountable for their growth initiatives with this new layer of transparency, leaving no room for any unethical practices.

With the right to be forgotten, most if not all resurrection strategies become obsolete, forcing companies to double down on activation and retention strategies. Ultimately, this will lead to better end-user experiences and happier, more trusting consumers.

MIKE DUBOE, Head of Growth @ Stitch Fix:

Our focus has always been on improving the client experience by using data (both passively & actively provided) to better understand & personalize our offering to clients over time.

Better understanding clients' preferences allows us to actually build trust with them (as that ultimately results in a more personalized 'fix'), and we measure their trust through retention / keep rate and qualitative feedback, among other things.

Independent of GDPR, all growth teams should hold a high bar in (honestly) answering the question: "what's best for the user?" Once that answer is clear, communicating clearly and transparently with the end user becomes a key focus -- building a pattern of doing so over time will build trust.

For Stitch Fix, it's a core tenet of our business that the service improves over time as we better understand our client preferences. Clients provide us their style profile information both upfront and through usage over time, with a clear understanding on their part of how this dynamic works.


2. In-app messages get 8X the direct response rate of push notifications

So which should you prioritize?



There’s been a lot of attention paid to push, which is understandable. Getting people back into the app at all is most growth people’s biggest worry.

But, the data suggest that only around 40% of an app's users actually opt in to push — we know its reach is limited.

In-app messages reach a lower percentage of users, since they're only visible to people who are in the app, but yield 8x higher response rates according to a benchmark study from Urban Airship.

When's the right time for in-app messages versus push notifications?


ANDY CARVELL, Partner @ Phiture, and former Growth @ SoundCloud:

The comparison between IAMs and PNs is unfair. IAMs do kick ass though; very high engagement, but also highly intrusive since they override the UX and interrupt the natural usage of the app.

When do you work on or prioritize IAMs vs PNs?

The choice of channel (IAM vs Push) depends a lot on the target segment of users and the behavior you're hoping to influence or drive with the interaction.
  • PNs are great for bringing people back into the app (i.e. increase frequency of usage) and I've seen these work well for all funnel stages: helping new users to build a habit, keeping existing users engaged / driving higher engagement, bringing back churned users / re-engaging those at-risk-of-churn), but they will never reach the entire user-base because not all users allow the app to send them.
  • In-app messages, by contrast, do not require opt-in and reach the entire active userbase.
In my view, IAMs are seriously under-rated and often poorly understood.

The positives of IAMs:

IAMs offer the prospect of implementing segmented and native-looking new flows or interactions within the app that are properly instrumented and measurable (often not the case with natively-built dialogs) and allow lightning-fast iteration (no need to release a new version of the app to test new copy, segmentation or trigger points). That should be a dream-come-true for any growth practitioner.

Engagement is crazy high with IAMs and some of the best use cases are:
  • in-app surveys (e.g. Net Promoter Score collection)
  • prototyping new onboarding flows (which might then be built natively if the impact is proven)
  • conversion upsell
  • asking users to share something to social networks.
IAMs facilitate testing not just the messaging, but also the targeting and triggering points, all of which influence the impact potential of the message.

The less positives:

IAMs are no good for re-activation — unless combined with a push or email to pull users back into the app first — because the user has to be already in the app, but you can trigger them when users take specific actions within the app to catch them at the right point in their user journey, or at a high-psych moment.

Due to their ability to override the natural UX of the app, IAMs should be used with caution and designed well so that the experience is not jarring to the user. The IAM should feel as native as possible.

One of the biggest risks with IAMs is that they are usually blocking interstitials or modals that really interrupt the user.

This is why they are so effective, because it's akin to standing in front of someone and blocking their path, while holding up a sign. You have to be careful doing that and test carefully to ensure users are being positively influenced rather than annoyed!

At Phiture we built out our own customizable IAM templates that cover a lot of common in-app use cases: surveys that fire results straight back to analytics for real-time segmentation on responses, push opt-in priming, conversion upsell, etc. that can be visually customized to the exact design and brand requirements of the client, without needing the underlying code to rebuilt or extensively re-tested. 

How should they work together to drive engagement and value? What does that hand-off look like between the PN and the IAM and vice versa?

Combining out-of-app and in-app channels is a great way to bring users back into the app and then continue the conversation and campaign journey.

A classic example would be sending a short push notification (short texts convert higher) e.g. "20% off Levi Jeans today," then taking users who clicked on the push to an in-app 'landing page' that provides more details of the offer, perhaps a photo of the jeans and a CTA that deep-links them over to the product buy page.


3. Want to improve retention? Think about usage frequency.

The on-demand shipping service Shyp recently announced it was shutting down.


Shyp started out selling to consumers (“bottoms up”) and made a pivot from consumer to SMBs 1.5 yrs ago, then a pivot to larger corporate customers more recently.

Despite creating what many customers called a true “magic moment” via their surprisingly functional, high-touch service, the company eventually had to close its doors.

How's this related to growth? In contrast to a lot of other armchair commentators, we believe the silent killer was retention.




As an (infrequent) user of Shyp, I loved the product (and wish the founders and team the best). One core challenge for Shyp was that they started with an interesting value prop, and a great “magic moment,” but low frequency use case.

The problem with targeting the consumer market is that regular consumers don't ship that often, so Shyp was more likely to fall into the “Forgettable Zone” (something we call out in detail in the Retention Series).

You see fast initial growth, but then you end up having to "reacquire" all the users. That's not necessarily because people don't like the service and are churning, but is simply due to the low usage frequency.

A reacquire motion is not bad by itself, but it only works with high ARPU businesses like insurance. It didn't combine well with Shyp's low ARPU.

Finally, low usage frequency also kills viral loops and anything else that require consistent touch points.

To their credit, Shyp did figure this out and started the shift to higher frequency business customers, but at that point, and given how much they'd already invested in their initial consumer segment, it was too late to make such a deep pivot.



Thoughts on Growth is Reforge's weekly newsletter of must-known updates and perspectives in growth. By subscribing, you'll join a few thousand PMs, marketers, UX folks, engineers and analysts at today's top tech companies. Check out today's edition below.