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Retention Lift Experiment for New Feature

MediumStatistics & Probability00:00
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Problem

Business Context

StreamHub, a subscription video app, launched a new personalized reminder feature. Product leadership wants to know whether it improves true user retention rather than only creating a short-lived spike in opens or clicks.

Problem Statement

Design and analyze an experiment that tests whether the feature increases 28-day retention. Use 7-day engagement only as a diagnostic metric, not the decision metric.

Given Data

A 6-week randomized controlled experiment was run on newly eligible users.

GroupUsers Assigned7-Day Engaged Users7-Day Engagement Rate28-Day Retained Users28-Day Retention Rate
Control24,80010,91244.0%8,18433.0%
Treatment24,95011,72647.0%8,85735.5%

Additional design inputs:

ParameterValue
Significance level0.05
Power target0.80
Minimum detectable effect on 28-day retention1.5 percentage points
Baseline 28-day retention assumption33.0%

Requirements

  1. Define the primary metric, null hypothesis, and alternative hypothesis.
  2. Explain why 28-day retention should be the primary success metric instead of 7-day engagement.
  3. Test whether the observed 28-day retention lift is statistically significant using a two-proportion z-test.
  4. Compute a 95% confidence interval for the retention lift.
  5. Estimate the required sample size per group for detecting a 1.5 percentage point lift at 80% power.
  6. State whether StreamHub should roll out the feature now, and list at least three experimental design safeguards to ensure the effect is causal.

Assumptions

  • User-level randomization was implemented correctly.
  • Each user appears once and outcomes are independent across users.
  • No major concurrent launches affected retention during the test window.
  • Retention is defined as at least one active session during days 22-28 after assignment.