Under the Radar

Pillar III: Retention


00:00:00   Welcome to Under the Radar, a show about independent iOS app development. I'm Mark Orment.

00:00:05   And I'm David Smith. Under the Radar is usually not longer than 30 minutes, so let's get started.

00:00:10   So today we are going to wrap up the sort of three pillars of app development series that we've been mixing in and out of the episodes recently.

00:00:18   So the first one of those was talking about acquiring users, so acquisition. The second part was about kind of monetizing users or converting them, or to that kind of like once you have your users,

00:00:29   you know, how do you turn that into a business? And this is the, this episode is we're going to talk about retention, which is essentially the, now that you know, now that you have these users, and you've hopefully found a way to turn that into a sustainable business,

00:00:40   how do you keep that business going? How do you keep someone coming back into your application, which is fundamental to this because as you, if you've been following along in the series, and we'll have links to this in the show notes to previous episodes if you haven't,

00:00:52   but the fundamental challenges that you've faced to get to this point are massive. Like it's very hard to acquire a user in the first place, like that is monumentally difficult.

00:01:06   And then once you have a user, turning them into a user for whom you are able to make a sustainable living from their use of your app is difficult.

00:01:14   And so you have these two very hard things combining together to mean that any amount that you can hold on to that user and have them, you know, be a part of your user base for the long term is massive, because the cost of, you know, acquiring the next user if someone leaves is very large.

00:01:32   And in many ways, a lot of the benefits you get from the models we talked about in the conversion episode, especially like the subscription model, is very much based on this concept of retention that like the reason apps, you know, software subscriptions are such a powerful tool for developers,

00:01:47   and you know, create can create such a sustainable, you know, sort of cash stream into a business is because of retention, because you get this money all the time, and you have this delightful alignment where my incentive is to retain as many users.

00:02:02   And so I need to keep giving you reasons to come back into my applications. And I think there's two main aspects of retention that we're going to talk about today.

00:02:10   And in my mind, I think of retention in two ways, there's the sort of short term retention. So like the hook, right, like you're trying to get someone who just downloaded your app, they just, you know, hit get in the App Store, they open up the app, can you keep them there for any reasonable amount of time, and specifically long enough to really show them what the app is, and to demonstrate your value to them.

00:02:34   But that is a very short lived experience, we're talking minutes, seconds, you know, that initial kind of hook. And if you can't retain them for that, you know, you've lost massively. And then on the other side, so we have the hook at the beginning, and then we want to turn it into the habit, right?

00:02:48   This is the how do we make our application something that is a integral or regular part of someone's life? And how are we what are we choices we're making in our application to keep it there so that it becomes something that hopefully, you know, there are some users of my applications who've been using them for, you know, almost over a decade, I think, is my some of my longest users, like pedometer plus plus recently passed 10 years of development.

00:03:15   And I had someone reach out and they were showing me their steps file, like, you know, how many steps they've had. And they've been with the application for more than 10 years regular, like opening the app, probably at least once or twice a week for 10 years. Like, that's amazing. That's incredible. Like, it blows my mind when I see those things. And it's like, what are the things that we're doing to try and build that kind of a habit where people are using our apps in a constructive way, they're getting value from it, you know, for decades is a truly remarkable kind of thing, if we can achieve it.

00:03:43   I've been very lucky that Overcast really has a core group of customers that have been with it for a long time. Like, I like when when the small developer program came into effect, I wasn't that affected by it. Because most of my subscriptions are multi year subscriptions anyway. So I was already getting 15% on on, I think more than half of my subscribers. And so I like my my average rate I was paying was more like 20% than 30%. You know, it's wonderful to have those long term users.

00:04:12   And they are invaluable. And when you look at, you know, what we try to do to acquire users, this is like the gold standard is what we were trying to get the most is these users who are using the app forever, like who get it, they download it, they sign up or whatever, and they just they just keep coming back to it. That is that is the gold standard. That is the gold result. That's what you want. And it's very, very difficult to get those people and a radically, vanishingly small percentage of your new users will actually be able to get it.

00:04:41   Yeah, but once you get them, it's amazing. I remember looking at my retention graph, essentially, in, you know, for for my subscriptions, and it's one of these wild things where, if you look, you know, the number of people who start a trial who continue on to a trial, relatively small. I think in my case, it starts to sort of like, you know, you 60%, say, of people who start a trial, continue with the trial. And then you have your first actual renewal. And then that drops a lot. So maybe it's like 80% of those people who are actually doing it.

00:05:10   80% of those people who kept it, they'd go from there. But once you get to the place that you're like their fifth or sixth monthly subscription payment, the retention rate starts to increase precipitously and becomes like 98%. That it becomes this like, if you've if they've been a user of your app for, you know, after six months paying, you know, paying you into a subscription, it's so sticky and becomes such a, it becomes reliable in a way that as a small developer becomes

00:05:39   super, you know, it's just it's such a nice feeling that I don't have a huge sense of worry. Because there's this baseline of people that like my like my software, like what I do. And clearly, you know, if they've been using it for months and months and months and continuing to think that it justifies the expense of them paying for it. Like, that's a very positive thing that I can plan on and, you know, build a business around, which is just wonderful.

00:06:01   Yeah, exactly. So in terms of that first short term retention, the, you know, the hook, I'm thinking about onboarding for the most part, but I'm thinking about that. And I think onboarding can take a lot of different forms. But fundamentally, I think what onboarding should be trying to do is you're trying to demonstrate clear value as soon as possible. Like you that you want to shorten the time from the first, you know, from the first time they launched the app, till they have a

00:06:31   valuable interaction that, you know, demonstrates the utility and the worth of the app to the user. You want to get that as short as possible. And this is something that I've struggled with a lot because so often my instinct is to kind of have an onboarding experience that is very, like

00:06:48   complicated, potentially, or showy, or I want to show you all the things of the app, I want to show you, like, it's like I'm trying to make my case by like, bombarding you with all this cool, you know, like, Oh, wow, here's this cool thing you can do. Here's this amazing feature. Have you tried this? Have you done this? And I think what I like, and even when I was preparing for this episode, I was looking at my pedometer++ onboarding, which is much better than it used to be, it used to be terrible. But I was like, Oh, I'm asking too many questions, like I'm asking all these things like asking, what do you want your step goal to be? And it's like, you know, maybe I don't need to do that in the onboarding. Most people, I need to show

00:07:18   you, like, how quickly can I go from you download the app to I'm showing you your step count? Like, I need to get that time as short as I can, because that's the main experience that people want. They want to be able to see their step count in the app that counts your steps. So like, that's what I need to do. And I think that initial thing is like you have to in your application, be able to answer this is like the elevator pitch, like, what is it cool about your app? What is your app do? And then how quickly can you show that to a user? How quickly can you get them? You sort of get them to have the like,

00:07:48   Oh, that's cool. I like that. That makes sense. Like, let me, you know, let me explore more. Because if you have more features, if you have cool things, like we'll talk about this in long term retention, that can be really cool. But the time to show that to a user, the time to educate them is likely not the first 30 seconds after they've downloaded it from the App Store, the time that is the time to just most clearly and concretely give them a sense of if you continue using this app, if you open it a second, a third, a fourth, a fifth time, you're this is the kind of experience you're going to have.

00:08:18   And you can look forward to that experience becoming richer and more impressive and more useful over time.

00:08:23   Yeah, I found that that initial, you know, what we used to call out of the box experience of the app back then, software came in boxes, you know, that very first run experience of an app, the effect on retention of every decision you have on there is massive.

00:08:39   You know, one of the things that I figured out and adjusted not that long ago with Overcast, maybe four or five years ago, is, you know, Overcast has an account system for logging in and keeping your progress synced. And it's actually pretty important for the way people expect things to work.

00:08:54   But I found that if I, on my initial screen, when you first launched the app, I would say, you know, do you have an account? Log in. Otherwise, here, you know, create one. And even just that was such a barrier to people.

00:09:09   They would bounce right off of that at a ridiculous rate because even asking people, do you want to make an account? Then they're like, ugh, I have to make an account to use this app?

00:09:18   And then, an Overcast account, a while ago, switched to anonymous by default, which is literally like when you click, you know, create an account, it doesn't ask you for an email and password. It just generates a random 64-bit integer and says, all right, this is your account number.

00:09:31   That's it. Like, and it just stores it in Keychain. It never asks you for it. And it hopes that you, you know, keep your Keychain maintained for future device installations.

00:09:38   And so there really isn't any of those steps, but people didn't know that. Like, when I would say, you know, create a new account, nobody knew that it was like synced, or that it was just for sync and it was free and it was not going to be a big email password spamming you kind of thing.

00:09:52   And so, at some point in the last few years, I changed the button from create new account. I changed the text to just say, add podcasts.

00:10:00   Sure. And so there's like, you know, you launch Overcast and it says, add podcasts, and then below that, there's a small link that says, log in. And people tap the add podcast button way more than they tapped create new account.

00:10:12   It's not even close. Massive difference, because that's their goal. Their goal at that moment is, I want to start using the app. I want to, like, I downloaded a podcast app. Let's get some podcasts in it. That's their goal.

00:10:22   So anything you can do to have that kind of jump of like, you know, people, look, there's so many apps out there. Your app, chances are, is not special enough to make somebody go through hoops they don't want to go through.

00:10:33   And so if you give them any reason at all to bounce out, they will. So get rid of any roadblock you can possibly get rid of and get them right into the app, right into using it.

00:10:42   Yeah. Yeah. And I think it makes a big difference. Like what you're saying there is, it's sometimes when I've looked at my, like, stats and analytics kind of things around that, and it's just shocking how many users can bounce out of the app on that first screen.

00:10:56   Yeah.

00:10:57   And, like, it is, I mean, in some ways it's like heartbreaking. It's like, they were so close. They were just like one button push away from, like, really understanding the application and really seeing the awesome things, and they never got there. And it's like, but that's on me. That's not really on them.

00:11:12   Like, I need to really optimize that initial 30 seconds of using the app to do everything I can to make it as streamlined as possible. And this is an area that I continue to grow in and struggle because there's a tension I always feel of wanting to, like, demonstrate, part of demonstrating value in the short term sometimes feels like showing them all my cool tricks, all the cool things they can do.

00:11:37   But the reality is, it's like the cool tricks can come later. The initial experience is about that first run. Just do whatever the main thing that your app does. Like, if you had to describe your app in three words, you know, it's like, Podometer++ is a step counter.

00:11:51   You know, Widgetsmith makes custom widgets. Like, I need to get you to be making a custom widget or counting your steps as soon as absolutely possible. And the fact that, like, Podometer++ can track your workout and do offline mapping and can help you plan work workouts and badges and all of these other things that it does, like, that's awesome.

00:12:11   And, you know, that's long term retention. But short term retention is I just need to get you to show you how to count your steps. You know, like we were just saying in Overcast, it's like, the time you can get from downloading the app to the first audio coming out of the app, that is the vital thing to really get that initial short term retention going and, you know, working in the right direction for us.

00:12:31   Exactly. Because, you know, as we're going to talk about, like, many other types of retention involve, like, getting people to come back to your app after they have stopped using it for whatever reason, for, you know, the day, the week, the month, how do you get them to come back?

00:12:45   And, you know, in my case, if I've said this is a podcast app and people come in and they've added podcasts, how do you get them to come back? By giving them notifications that there's new episodes of the podcast they subscribe to.

00:12:56   So the more you can get them to subscribe to those podcasts at the outset, the more chances you'll have to bring them back in later after they've forgotten about your app.

00:13:05   So the next thing I want to sort of talk about is as we start to transition towards the more long term retention, like, and this is the crux of what we were saying at the beginning of, like, having a business that is sustainable and that is, you know, built on the retention you can have in the long term.

00:13:21   Now that you've gotten through that first experience, you've shown them value, you have a reason for them to come back to your app, whether that's, you know, the next in a few hours, in a few days, in a few weeks, whatever makes sense for your application.

00:13:33   There's lots of tools and there's lots of strategies that we can do with that. And this is a little sidebar that is just something that has been rattling around in my brain for a while recently that I feel slightly uncomfortable about as a member of this, like, industry, like the way that iOS app development works now.

00:13:50   And it's, if I was going to summarize it, it's this feeling that sometimes I'm increasingly aware that and slightly uncomfortable about the amount of success in this sort of software development cycle is roughly proportional to the degree to which you can make your product addictive to your users.

00:14:09   And that's an uncomfortable feeling and like I'm choosing that word is specifically that it's there, there's a, you know, there's a certain, and I'm saying addictive, like there's a certain way of hooking someone into using your app, using tools and psychological, you know, sort of phenomenon that create a heightened sense of connection and dependence and habitual ization of your application to your users.

00:14:35   And there's part of that that can be really good and positive. And you know, like, in some ways, like, there's things that I do that are in this vein. So like the two biggest, I would say, like psychological tricks that I'm calling them psychological tricks, I don't know if there's a better word, but like the things that the ways that you can do this maybe is there's one is loss aversion, right?

00:14:54   So this is the way that an observation that people disproportionately feel bad when they lose something they had, then sort of the gaining it in the first place, that there's this asymmetry there. And so this is where you have things that you build things into your app that create that sense of, you know, you want to be a user is sad because they're going to lose something.

00:15:17   And so the number of the simplest version of this is something like a streak, where you know, oh, you how long have you and I use this in pedometers, like how long of a day streak? Have you been keeping meeting your step goal. And that creates the sense of once you have 100 day streak, it's really hard to want to break that streak. So you're going on the 101st day, you're going to go out and walk because you don't want to lose that streak.

00:15:40   Or similarly, you see this with apps that will give you these kind of very time limited things and say, Oh, you know, we're going to give you this boost to whatever it is the some some feature of your application, you'll get extra XP or whatever it is, but you only get it if you were if you use the app for the next 20 minutes, or these kind of time sensitive things, where it's Oh, no, if I don't do this, now, I'm going to lose it.

00:16:03   But what you're doing is, you know, you're kind of tacking into this sense of loss aversion. And then the other one of these things that you have is kind of this random reinforcement. And so with this, I always think about kind of like pull to refresh and agro algorithmic content, where there's this, you know, this classic phenomenon that you think of with like slot machines, where if you every time you, you know, sort of everything you hit go, so you're in your social media app of choice, you pull to refresh, you swipe up whatever it is, and you don't know if the next thing is going to be amazing, or if it's going to be a lot of fun.

00:16:32   Or if it's going to be amazing, or if it's going to be normal, or if it's going to be terrible. And the uncertainty about that, and the fact that it's like, you don't know if it was, you know, if every third time you refresh your social media client, it was amazing. There's a great article, there's some really compelling content, it would be less even less compelling to you in a weird way than if it's just random, and you never know. And sometimes it will be amazing. And sometimes it won't. And that creates this really tricky, addictive in just eating in people. That's why slot machines are so effective is that sense of kind of random reinforcement.

00:17:01   And anyway, I just I don't necessarily have a settled opinion or thing on this, but it's something that I'm increasingly aware of that, like, I don't want to make apps that are sort of addictive in ways that are harmful or not wholesome for my customers. I want to do things that there are sort of things I do to try and bring them back into the app. But hopefully a lot of that is because it is for their benefit and for their, you know, that it enhances their experience, isn't just, you know, it's not just for their experience.

00:17:30   Isn't just something that I'm doing to try and sort of like hack their brain to make me more money, like that perspective. And that approach just doesn't sit well with me seems really problematic. And you know, when I see it around in other apps, and I see apps that are doing these kinds of tricks and tools, like it just it just doesn't sit well for me, it makes me uncomfortable and doesn't make me feel sort of pride to be a part of the modern software development world.

00:17:55   So anyway, just like before we get into some of these long term retention things, it was just like a little sidebar I had that I just wanted to find. It's been rattling in my brain for, you know, for several months. And this seemed the opportune time to mention that.

00:18:07   Yeah, that trend has really bothered me as well. I think it's much more prevalent in the gaming industry than it is for other types of apps, but it's certainly not absent from other apps. And I think it's creeping into more and more of them. You know, I think there's a number of like, you know, cultural and business reasons for this. Culturally speaking, at least in America, there's a very pervasive attitude here of if there's some way you could make more money, why wouldn't you do it? Like, of course you're going to do it.

00:18:36   And there's, I think people don't often weigh the morals behind that. It's difficult when you talk, you know, money is like a drug in people's minds. The effect that, you know, the possibility of making money has on people, it bypasses a lot of those moral checks in a lot of cases for a lot of people.

00:18:52   And so, you know, if there's an opportunity to make more money, it's very hard for people to say no to it. And then business-wise, there's this culture in much of the tech business these days that, you know, everything is a data-driven decision.

00:19:08   And look, the data shows if we do this kind of, you know, kind of messed up thing that, you know, it's a little bit morally questionable, but look, the data shows it converts five times more or whatever. And it's very difficult for businesses to be able to say no to those things as well.

00:19:22   You know, just the way businesses work, if there's something that you have data to show this will make you more money, that's very hard to resist.

00:19:30   Especially, you know, if times get a little tight and growth starts to slow down and the budget starts to get a little bit tight, then you start, you know, taking advantage of whatever you can.

00:19:40   And so, as an indie, you can apply different standards to what you do. That's one of the great things about being an indie.

00:19:48   There are things that everyone else in your, you know, competitors or your business, all the other competitors will do some creepy thing that you think is a little bit gross or wrong and you don't want to do.

00:19:59   They'll all do it because of those factors. Because either they can't afford not to in their minds or they think, "Well, it makes more money, why wouldn't we?" You know, "The data shows," whatever.

00:20:08   But you can decide, "This thing that I think is gross, I'm just not going to do it." And that's it. And you can be fine not doing it.

00:20:16   And that's one of the great luxuries of being an indie. Like, you can make decisions like that, that you might be leaving some money on the table, but you can sleep better at night and you can be more proud of what you're making.

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00:21:51   So like in terms of the long term retention things that you're doing, like turning this into a habit and hopefully in the good way that we were just saying,

00:21:58   like this is trying not to have the habit in a bad way, but like you're a meaningful part of improving someone's day to day life.

00:22:05   They like your app. It's good. Like this is in some ways I find like all the way through this series, right?

00:22:10   The three big pillars of app development. This is the one that I enjoy the most because this is the one that is essentially about making a good app.

00:22:18   Like fundamentally, long term retention, I think is sort of at its best is started from you develop a really awesome app that will consistently deliver an excellent user experience in the long term.

00:22:34   Like that's what I enjoy the like doing marketing work, making screenshots, doing paywalls, working on these kinds of things, like doing onboarding screens.

00:22:42   They're like, it's important. I know it's important, but what I really love is making good apps.

00:22:47   And I feel like long term retention is best done from building something that is just good.

00:22:52   This is where your performance and not having lots of crashes and being accessible and doing all the things that are kind of like the hallmarks of a good app that has is well crafted.

00:23:01   Is this that's the starting place where I think long term retention comes from that you aren't being frustrating to your users.

00:23:08   You are consistently delivering something that is useful and valuable to them.

00:23:12   And that is done in a way that is pleasurable and enjoyable for them.

00:23:17   And doing that is a great place to build a business from because if you're consistently delivering value to them, then on the flip side, like we're talking about in the kind of monetization episode,

00:23:29   you are able to extract some of that usefulness in some way back to yourself, whether that's from a paid subscription, is it terms of they're consistently coming back,

00:23:37   so you're able to show them advertisements, like whatever that is, that connection is so good.

00:23:43   And it starts, I think, fundamentally making an app into a habit is about having a great app that delivers consistent value.

00:23:50   Yeah, exactly. And that's, to me, like as an indie, that is what we are working towards. Like the whole goal of being an indie is that whatever it means to you that like an app is quote a good app, a high quality app,

00:24:04   you can make that as an indie. A lot of times in our day jobs, we aren't allowed to do things that way because it would be too expensive for the business or there's not enough of a business case for it

00:24:15   or they just don't care and don't value that kind of thing or they have different goals they have to meet. You as an indie can make the kind of app you want to make.

00:24:22   And so you can make, you know, whatever a good app means to you, that's what you can do. And hopefully you can find other people who value that as well.

00:24:31   And that, I think, is why we're all here. You know, some of us are here for the paycheck. Honestly, there's easier ways to make money than trying to make an app in the app store and make money.

00:24:40   There's a lot of easier ways to do that, like literally getting any job anywhere ever. But it's hard to make high quality apps anywhere else because, again, all those business pressures kind of get in the way.

00:24:52   So if you have the luxury of going indie, especially if you have the good fortune that you have money coming in from it that allows you to do things the way you want, this is the goal.

00:25:03   Making an app that's so good to whatever that means to you that other people will keep coming back to it and will evangelize it to their friends and other people just because they love it, just because they think it's good too. That's amazing.

00:25:17   Yeah, exactly. And the word that I love here is it's like compelling, right? Like you're developing a compelling experience that in that sense of like it's worth sharing.

00:25:25   People are, you know, word of mouth advertising is the best advertising because it is both free and tremendously effective. And so if you have a compelling experience that is differentiated in some way, that is noteworthy, that if you're just, you know, your app is the same as every other app, it's not compelling.

00:25:41   It's not interesting. You're not going to call, you know, call up a friend or the next time you're hanging out at dinner, you'll be like, Hey, check out this cool app I got.

00:25:46   Like if it's just a boring, does the same as everything else app, like there has to be something compelling and interesting about it and something that can build that habit, that can build this reason for them to keep coming back.

00:25:57   And I think about that too is there's also things that you can do. Like this is my very brief like growth hacking section. So, you know, my psychological trick that I think is a great thing for indie developers to use.

00:26:10   And this is, I think it's the most moral one you can think of. It's like build features that are get better the more you use them. Do things that, like the more the user uses the app, the richer their experience becomes.

00:26:24   And I think that is a great way to build it into a habit. And I think of how in, you know, for pedometer++, this is why I do badges and rewards. So like the more steps you've counted, the more you have achievements and things to reward you within the application.

00:26:40   That like, I think that is a good thing for users. And it's I feel very good about that as a thing that I'm doing that I'm creating this thing that the more you use the app, there's something in there that becomes more compelling to you or I think about how you often have apps that do things like yours interview.

00:26:56   It's like that kind of, you know, this is the classic like Spotify, you're in review, here's what you've listened to kind of feature. Like that's great because the more you use the app, the richer that experience is that you're working towards. And there's something about kind of like those back of the mind features that you want someone to be thinking about, oh, if I'm going to do this thing, I want to do it in this app, because it will in the long term that will somehow benefit me.

00:27:19   I mean, in a weird way, it makes me think of smart speeds to in overcast where I don't, I find it hard to listen to podcasts in other things, because in the back of my mind, I think I'm wasting my time. Because it's not, you know, it's like, I'm, I if I listen to a, if I listen to a podcast and overcast, it'll be 5% shorter, but without me missing any of the sort of ostensible audio quality of the application, because it's just tightening shortness, you know, short short shortening the sciences between words.

00:27:48   In a way that is almost imperceptible, but is meaningful in aggregate. And so like, smart speed is like this little mind virus in the back of my head that's just like, no, you have to listen to podcasts in overcast because otherwise you're wasting your time. And like, that's a kind of feature that's a great way to boost retention, because you can have this thing that's like, no, I need to do this in this particular app, because of this feature is so compelling, because there's something in there that is just worthwhile and that is differentiated in a cool way.

00:28:14   Yeah, and that's honestly, that kind of feature is really fun to build. Like, because if you're, you know, you're an indie, you care about like detail and quality and everything. It's fun building stuff that is so good and so compelling that it keeps people coming back to your app. Like, that's fun. And that feels more, that feels like retention based more on merit than on trickery. And I think that's a place that it's really nice to be as an indie.

00:28:37   Yeah, and I think as you said that and that kind of retention is I suspect also the much more sustainable kind. That is, I mean, this is this is the I don't know if it's true, but in my heart, I hope it's true, that retention based on the quality of your product is going to be more sustainable than a kind of retention that is based on trickery. And that kind of a thing in the long term, if you're, you know, if you're doing if you're doing things that are ultimately for your benefit rather than your users,

00:29:06   my hope would be that in the long term that won't be as sustainable. They won't build you into a more, you know, a place where you're having 98 99% retention on your long term basis because it's coming from a place of people they have genuinely, like honestly positive feelings about your application. They don't feel manipulated. They're not coming back to it because of some kind of feeling that is kind of a bit mixed and icky. It's like no, it is just pure positive is just a great place to be. And hopefully, like that's what we're hoping you know, there's been a lot of people that are like, Oh, I'm going to be a good person.

00:29:35   That's what we're hoping. You know, there's we do this app, we do this whole podcast because we want people to be able to build businesses that that's the end result that you've acquired customers, you've turned them into something that is a sustainable business for you. And then you can keep them with, you know, working with you in terms of making this app sustainable by retaining them as your users for decades, literally.

00:29:54   Thanks for listening, everybody. And we'll talk to you in two weeks. Bye.