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Mobile App Retention: The Cold Truth Behind Customer Loyalty

Mobile App Retention: The Cold Truth Behind Customer Loyalty

by Mihovil Grguric

In this post, we will examine why loyal customers bring more to the table and define the key metrics by which you can track your mobile app retention

What is Mobile App Retention Rate?

In a nutshell, the mobile app retention rate is the rate at which you retain customers over a certain period of time inside a mobile application. In the mobile marketing industry, we use the percentage of app users who make a return within the first three months as a benchmark. Most commonly, we use the first 28 days as a primary metric for retention rates. 

You can take as many days as you’d like for your Customer Retention Rate (in short, CRR). The most commonly taken metrics for mobile apps are day 1, day 7, and day 30 retention.

The day 1 retention rate shows us how many users reopened the app the day after the installation took place. The one-month retention rate indicates the number of users that found their way back into the app 30 days after installation.  Since the nature of the app plays a big role, it is essential to make research in your industry and app categories.

Let’s take a look at retention rates for different types of apps.

According to Statista, comics, news, and shopping apps have the best day 1 retention. Mobile gaming is close behind, differentiating from genre to genre.

Wondering which apps have the best day 30 retention? Apparently, finance and news apps, with about 13% retention rates. The value behind this piece of data serves to show the subjective nature of retention rates. Your app follows a different set of rules than your neighbor’s app. It is, therefore, crucial to take everything into account. For this reason, take a moment to consider churn rates

 

what is mobile app retention rate

Churn Rate What?

Churn rate right! Cambridge Dictionary teaches us that to churn is to make milk out of butter.

Wait, what does this have to with mobile apps?

Churn is an everyday term that you probably hear a lot, especially if you move around the mobile industry circles. Cambridge also offers other explanations of the word, but the one we are looking for is not a verb. Churn, as a noun, vocally represents the situation in which customers stop consuming your product, whatever it may be. In the on-the-palm-world of apps, churn describes an event where the users leave your app, or even worse – uninstalls your app. The three dreaded words no app-owner ever wants to hear.

We distinguish two types of churn, the soft and the hard churn. A soft churn counts when a user hasn’t opened the app in a given time frame but hasn’t uninstalled it yet. On the other hand, a hard churn is an event when a user deletes the app from their smartphone. All in all, it all boils down to the same – users ending their engagement in your app.

App customer retention rates and churn rates are linked. The higher your customer retention rate is the lower your churn rate, and vice versa.

Studies have shown that as time goes by, mobile app retention rates keep dropping significantly. That is why you will often hear the advice to keep your app or the contents of your app fresh as much as possible. The human brain is wired in a way to get a dopamine hit from novelties. We love new things (especially if they are shiny).

 

You can make butter. Or you can make loyal customers. You choose.

CRR and Churn in Mobile Games

Customer retention and churn rates are an especially important metric in mobile gaming. So much so that a mobile game with less than a 35% CRR on Day-1 will get abandoned by its creators. Many mobile game studios build their games with these two key metrics in mind. Acquiring users is much less work than user retention. This is the savage and brutal nature of an oversaturated market. While it might sound insane to spend so many hard-working hours to ditch an app, consider the long-term effects. As humans, we tend to become victims of certain cognitive biases often.

Sunk-cost fallacy is a cognitive bias that makes individuals commit more time, energy, and money on a sinking project with the hopes of revitalizing it. A simple example would be all those times when we order food from our favorite restaurants and we over-eat just to get back our money’s worth. We tend to feel obligated to sink more in our investments. We chase the reward at the end of the rainbow. In business, there is not much room for error, especially financial errors.

Calculating your mobile app retention rates and your churn rate will help you make the hardest decisions in your app’s life. Do you abandon it to pursue another goal or do you keep on investing until it finally pays off? Those are the questions that you can answer with CRR and Churn Rate only.

 

Don’t let headstrong thinking get into way of reason. Sunk-cost fallacy is a real danger.

Many strategies work on improving mobile user retention rates. Not all will be helpful for your app, but they will net you a deeper insight into the issues your app might be facing. To make it simpler, we will list some of the most commonly used strategies for increasing your app retention rates that will work regardless of the type of your app. You should first start with these tips and consider category-specific actions afterward.

1. Work on Your Design

A perfect design doesn’t exist. Even the best app designs will have room for improvement. It falls upon you to find out where that might be for your mobile app. If you set up your app for AB testing, you can see black-on-white what the data says (coincidentally, at first it will sound like what does the fox say). A great design makes things intuitive and appealing.

2. Consider Push Notifications

Push notifications have been a matter of great debate. Keep them or ditch them?

The answers you will find on other internet places are often too absolute (and as we know, only a Sith deals in absolutes). There is no one answer for all the apps. Push notifications can help boost your retention rate through the roof, but it can also be an elevator to hell if you annoy your userbase.

How can you avoid this? Well, you should pay special attention to their relevancy, frequency, and content. If you apply best practices for implementing push notifications, there is no reason to worry about their effects.

3. Let Data Guide You

The data is beautiful. It will not lie nor deceive you if you put in the honest hours to set up your analytics properly. You can trivialize many decisions by simply introducing your app to analytics of your choice. If you keep track of all your key metrics, you will soon discover gold veins in your app. Strike hard and strike through once you make sure the numbers align properly.

If you have trouble deciding which of the mobile analytics platform would best suit your needs, consult our guide on mobile app analytics platforms.

4. Reward Loyalty

Who doesn’t like rewards? Your new, hot analytics platform will help you track your mobile app user behavior. You don’t want to give a reward too early or too late. You are rewarding your users for spending time and money in your app. Since you can now measure the impact of your appreciation gifts, test different methods of rewarding. See how they feel and ask for feedback.

5. Keep it Fresh

Probably the main reason why users leave apps is that they get bored. This happens if your app is repetitive and doesn’t have enough diverse content to keep them enthusiastic.

To keep your users motivated to engage with your app as often, you need to make sure to have fresh in-app content. Update your content and give them something new and they will keep coming back.

6. Keep it Functional

We keep our food fresh and our apps both fresh and functional. No one likes to play with a broken toy. The frustration that follows after engaging with a barely functional app is often the number one leading factor in why users never return. Regular updates and maintenance will take care of this issue before it becomes too big to handle.

7. Integrate Social Interaction

Connect or compete, it doesn’t matter, we people love both. This is the advantage you’ve been looking for. While it is true that some apps are profitable without a single social element, for the most part, this isn’t true. We, people, love competing and connecting. We are social animals. That is why social media like Facebook and TikTok are so big right now.

However, not only social apps like these should include social features. For example, mobile games can implement an array of social features. Some of the most common ways to do that are including social media connections, competitive features, in-game chats, cooperative modes, etc.

8. Create a Great Onboarding Experience

It is incredibly important for your app to make a good first impression. When users start their first session in your app, they want simplicity and logic.

Moreover, if you require them to register, make it as quick as possible. You can do that by including social login options (Facebook, e-mail).

Finally, don’t overwhelm them with all the features the app has. Focus on the most important ones and let them explore the app themselves. You can even provide them a short tutorial and teach them how to use your app/game.

9. Personalize as Much as Possible

No one likes to feel like just one more number.

Your app users want to feel special and recognized. What can you do within your app to achieve this?

First of all, don’t send out generic in-app messages and push notifications. The least you can do to personalize them is to segment users into groups. For example, you can segment them by age, gender, interests, location, purchase history, app activity, etc.

Another thing you can do for them is to allow them to customize their in-app accounts. Allow them to change profile pictures, give themselves a name, etc.

All of this should help you create a special connection with your app users and build long-term relationships.

Parting Words

As you see, user acquisition is only one part of a mobile marketing funnel. There are many ways you can acquire new users but once you lose them, returning them will become a Mission Impossible task. Retaining users in your app costs much less than the acquisition of new users. An increase of 5% in your mobile app user retention rates translates as a 25 to 95% increase in profits. Retain loyal customers.

As always, if you have any questions or points you would like to debate, leave us a comment below and we’ll answer it to the best of our abilities.

Udonis

About Udonis

Udonis is an independent full-service mobile marketing agency that acquired more than 300,000,000 users for mobile games since 2018.

Visit udonis.co

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