Growth & Strategy
Personas
SaaS & Startup
Time to ROI
Medium-term (3-6 months)
When I started working with a B2B SaaS client who was drowning in signups but starving for actual engagement, I discovered something that completely changed how I think about user acquisition. Their conversion funnel looked perfect on paper - decent signup rates, solid onboarding metrics, reasonable trial-to-paid conversion. But users were vanishing after their first session like ghosts in a horror movie.
The problem wasn't their product or their messaging. The issue was that they were thinking in terms of linear funnels when they should have been thinking in terms of loop-based engagement models. Instead of hoping users would progress through a series of steps, they needed to create systems where the output of one action became the input for the next.
This realization came from analyzing user behavior data and noticing a critical pattern: the users who stuck around weren't just completing tasks - they were creating value that made them want to come back. The ones who churned were stuck in dead-end experiences with no reason to return.
Here's what you'll learn from my approach to building engagement loops:
Why traditional funnels fail at creating lasting engagement
The specific framework I use to identify and build engagement loops
Real examples of loops that transformed retention rates
How to measure and optimize loop performance
When loops work (and when they don't)
Ready to stop treating your users like they're on a conveyor belt and start building systems that make them genuinely want to stick around? Let's dive into how engagement loops can transform your retention game - whether you're running a SaaS platform or an e-commerce store.
Industry Reality
What everyone thinks engagement means
Most businesses approach user engagement like they're running a factory assembly line. You've seen this playbook everywhere: drive traffic to a landing page, convert visitors to signups, push them through onboarding, hope they activate, then pray they stick around long enough to become paying customers.
The traditional engagement wisdom looks like this:
Acquisition: Get users to discover your product
Activation: Get them to experience your core value
Retention: Keep them coming back through email campaigns and notifications
Revenue: Convert them to paid plans
Referral: Turn them into advocates who bring more users
This linear thinking makes sense on paper. It's clean, measurable, and easy to understand. You can assign teams to each stage, create dashboards for each metric, and optimize each step independently. Most growth teams are organized around this exact framework.
But here's the problem: real user behavior isn't linear. People don't move through your product in neat, predictable stages. They bounce around, take breaks, return months later, and often discover value in ways you never intended. The linear funnel assumes users are on a one-way journey toward becoming customers, but engagement actually works more like a flywheel.
The conventional wisdom fails because it treats engagement as something you do TO users rather than something users create FOR themselves. You're pushing them through a series of hoops instead of giving them reasons to want to jump through those hoops on their own.
That's where loop-based thinking changes everything. Instead of optimizing for progression through stages, you optimize for cycles that create their own momentum.
Consider me as your business complice.
7 years of freelance experience working with SaaS and Ecommerce brands.
The client that opened my eyes to engagement loops was a project management SaaS that was struggling with what I call 'trial tourism' - users would sign up, poke around for a day or two, then disappear forever. Their activation metrics looked decent (60% of users completed the setup process), but their day-7 retention was abysmal at just 12%.
During our initial analysis, I noticed something interesting in their user behavior data. The small percentage of users who did stick around weren't just using the product - they were creating content within it. They were building project templates, organizing team workflows, and essentially investing their time to make the tool more valuable for their specific use case.
But here's the kicker: once they'd invested that time, leaving the platform meant losing all that work. They weren't just using a project management tool anymore - they'd built their own customized system on top of it. The switching cost wasn't just learning a new interface; it was recreating weeks of organizational work.
Meanwhile, the users who churned were the ones who never got past the basic 'add a task, mark it complete' functionality. They were using the product, but they weren't building anything with it. There was no accumulating value, no reason to return, no investment that would be lost if they left.
This pattern reminded me of something I'd seen in e-commerce: customers who create wishlists, build custom collections, or accumulate loyalty points stick around longer than those who just browse and buy. The difference is that engaged users are creating value that makes the platform more useful to them over time.
That's when I realized we needed to stop thinking about user journeys and start thinking about user investment cycles. Instead of guiding people through a series of steps, we needed to create opportunities for them to build something valuable that would naturally pull them back into the product.
Here's my playbook
What I ended up doing and the results.
Once I understood that engagement comes from user investment rather than user consumption, I developed a framework for building what I call 'sticky loops' - cycles where users create value that makes them want to return and create more value.
Here's the exact process I used to transform that project management SaaS:
Step 1: Map Current User Value Creation
I started by identifying all the ways users were currently investing time to customize the platform. This included creating project templates, setting up team workflows, building custom fields, and organizing their workspace. Most importantly, I tracked which of these activities correlated with long-term retention.
Step 2: Reduce Friction in High-Value Activities
Instead of pushing users toward generic 'activation' events, we redesigned onboarding to encourage the specific behaviors that created the most user investment. We made template creation part of the setup process and gamified workspace customization.
Step 3: Create Compound Value
This was the key insight: each action users took should make future actions more valuable. When users created project templates, we suggested related templates. When they organized their workspace, we showed how that organization would speed up future projects. The value of using the product increased with every session.
Step 4: Build Network Effects
We encouraged users to invite team members not just for collaboration, but to see and benefit from the organizational systems they'd built. This turned individual user investment into team investment, making it even harder to leave.
Step 5: Measure Loop Health
Instead of just tracking activation and retention, we started measuring 'investment depth' - how much customization and content creation each user was doing. This became our leading indicator for long-term engagement.
The results were immediate. Day-7 retention jumped from 12% to 34% within two months. But more importantly, trial-to-paid conversion improved by 67% because users who had invested time in building their workspace were much more likely to see the platform as essential rather than nice-to-have.
This same framework worked when I applied it to an e-commerce project. Instead of just optimizing for purchases, we focused on getting customers to create accounts, build wishlists, and set up personalized recommendations. Each of these actions made future shopping sessions more valuable, creating natural reasons to return.
Loop Triggers
Identify what naturally pulls users back to create more value rather than just consume
Compound Value
Design each user action to make future actions more valuable and rewarding
Investment Depth
Measure how much users customize and build rather than just how often they visit
Network Lock-in
Turn individual user investment into team or community investment that's harder to abandon
The transformation was dramatic. Within 90 days of implementing the loop-based approach:
Retention Metrics:
- Day-7 retention increased from 12% to 34%
- Day-30 retention improved from 3% to 18%
- Trial-to-paid conversion jumped 67%
Engagement Quality:
- Average session duration increased by 156%
- Users created 3x more project templates
- Team invitation rates increased 89%
But the most telling metric was what we called 'investment depth' - the amount of customization and content creation each user was doing. Users in the top quartile for investment depth had a 91% trial-to-paid conversion rate compared to 23% for the bottom quartile.
The engagement loops created a compound effect. As users invested more time in building their workspace, they became more engaged, which led to more investment, which created stronger retention. It became a self-reinforcing cycle that traditional linear funnels simply couldn't match.
What surprised me most was how this approach reduced the need for traditional retention tactics. We actually sent fewer emails and push notifications, but engagement increased because users had intrinsic reasons to return rather than external prompts.
What I've learned and the mistakes I've made.
Sharing so you don't make them.
Building effective engagement loops taught me lessons that apply far beyond this single project:
1. Investment beats consumption for retention. Users who create value within your platform stick around longer than users who just consume value. Design for user investment, not just user satisfaction.
2. Friction isn't always bad. Making users work a little to customize their experience actually increases engagement because it creates ownership. The key is ensuring the work feels valuable, not tedious.
3. Network effects amplify engagement loops. When users can share or build upon what others have created, individual investment becomes community investment. This creates much stronger retention.
4. Measure leading indicators, not just lagging ones. Track the behaviors that lead to engagement (like customization and content creation) rather than just the outcomes (like retention and conversion).
5. Onboarding should optimize for investment, not just activation. Instead of pushing users to complete tasks, guide them toward activities that will make the platform more valuable for their specific use case.
6. Loops work best for complex products. Simple products with single use cases benefit less from engagement loops than complex platforms where users can build and customize.
7. Start with your most engaged users. Look at what your power users are already doing and design systems to help more users reach that level of investment.
The biggest mistake I see teams make is trying to force loops into products where they don't naturally fit. Engagement loops work best when there's genuine opportunity for users to create lasting value that benefits them specifically.
How you can adapt this to your Business
My playbook, condensed for your use case.
For your SaaS / Startup
For SaaS platforms looking to implement loop-based engagement:
Focus onboarding around workspace/system customization rather than feature tours
Track user investment depth as a leading indicator for retention
Design features where each action makes future actions more valuable
Encourage team/organizational investment to increase switching costs
For your Ecommerce store
For e-commerce stores implementing engagement loops:
Build account features that accumulate value over time (wishlists, preferences, history)
Create personalization that improves with each interaction
Implement loyalty systems that make future purchases more rewarding
Enable user-generated content (reviews, collections) that benefits the community