Ever wondered why you spend so much time browsing through social media apps? What makes them special?
User retention has always been a key metric for apps in the marketplace. Good apps have the ability to keep bringing users back to the app.
Recent studies show that the amount of time people spend on their smartphones is increasing. This means app developers and designers have become increasingly adept at raising the standard of user retention.
First, it’s important to understand the definition of user retention.
At its heart, user retention refers to the rate at which people keep coming back to an app. If someone comes back to an app three months after the previous session, the user retention rate is low. If someone opens an app every half an hour, the user retention is high.
There are many standard definitions people use in the mobile app industry regarding user retention. However, the crux of the metric lies in continually bringing people back to any given app.
A lot of development and design factors play a role in enhancing user retention, as does the actual content of the app itself. Like baking a cake, building an app involves the culmination of many different elements. Without the wrong mix of ingredients, an app can go south and crash a crucial metric like user retention.
In this piece, we will bring light to the importance of user retention as an app performance metric. We will also discuss the factors that affect user retention and how each can be optimized.
In this blog
- Why is User Retention an Important Metric in the Mobile App World?
- How to Optimize the User Retention Rate of a Mobile App?
Why is User Retention an Important Metric in the Mobile App World?
There are many reasons why most apps in the market try to optimize user retention. After all, who wants to build an app that nobody ever opens?
For example, a person with an ecommerce app has a direct incentive to optimize user retention as this can directly contribute to sales.
The following points will cover why user retention optimization should be a priority.
CAC – CAC stands for customer acquisition cost and is the first key reason why user retention for a mobile app is important. Today, companies have to spend a ridiculous amount of money to find new customers. It is up to 25% more expensive to make a new customer than retain an existing one.
A simple way to raise efficiency here is making the most of existing customers. This brings the discussion to user retention. A healthy retention rate ensures that a company doesn’t need to go out of its way to find new customers. High CAC makes the need for user retention much more apparent.
- Customer Loyalty – In the digital world, inculcating real customer loyalty is a tall order. True customer loyalty is hard to develop for online companies and mobile apps partly because there is no direct metric pointing to the same.User retention is a metric that comes close to representing some form of customer loyalty. If a user continually visits an app, it is safe to say that the app inspires some kind of loyalty.
- App Store Ranking – App stores such as Google Play Store and Apple App Store both account for user retention rates while ranking apps. Their algorithms are designed to increase the visibility of apps that have a higher user retention rate.Taking steps to enhance user retention can directly help apps enhance presence on app stores and get more downloads.
- Increase in Referrals – Loyal users are not just important because they continually visit an app. They also play a vital role in referring new customers and inadvertently becoming ambassadors for the app. Since user retention is a metric that closely indicates customer loyalty, it is wise to invest time optimizing it.
- Higher Returns – Keeping one right customer is often better than trying to acquire ten wrong ones. This is an old business principle but it has never been more important.Companies today chase a higher number of customers as night chases day. This obsession is partly driven from a maniacal modern obsession with numbers. A study a few years back showed that a 5% increase in user retention can lead to an increase in profits between 25% to 95%.
User retention is not just important because it takes a lot of investment to build an app. Even if you use an online app creator for Android and iOS to create an app, you need to work on its user retention. An app is not just a financial investment. It represents your brand and its standing in the digital world.
How to Optimize the User Retention Rate of a Mobile App?
The previous section gives a detailed analysis of the importance of user retention. In the mobile app market, user retention can become a major factor. This is because users are much more likely to first remove an app they don’t often use. Thus, apps with bad retention rates are often first on the chopping block.
The discussion circles back again to finding ways to optimize user retention rates of mobile apps. There is no magic wand that can perform this task. A range of different factors come into the picture and play a defining role. In the following sections, we list the factors that affect user retention and how each can be best optimized.
What is personalization? It is a term thrown around often these days. App developers are often told to develop apps that offer users personalized experiences.
Personalization, in the context of mobile apps, refers to offering optimal experiences specifically designed for each user.
When you open your Facebook feed, you are likely to find posts and content that is suited to your interests. This is because Facebook personalizes your feed and tries to show content you specifically find engaging and relevant. The same thing happens on other major platforms like YouTube, Twitter, and even Netflix.
You can boost your user retention rate by similarly personalizing your app according to the interests of the users.
Personalization generally works in two ways – static and dynamic.
Static personalization refers to personalizing elements on a mobile app that never change. For example, adding a welcome message with the name of the app user on the launch screen is static personalization.
Dynamic personalization refers to personalizing elements that keep changing. For example, let’s say you have an ecommerce app created with a WooCommerce app builder. You can keep personalizing product recommendations based on the purchase history of app users.
Personalization helps optimize user retention rates because users feel welcome. You don’t need to drum up complex AI-powered algorithms to personalize your app. Even a little effort towards welcoming users and offering them something relevant can go a long way.
User experience and retention rates are inextricably linked. There is no rocket science here.
The challenge is actually optimizing user experience.
In app development, the scope of user experience is often limitless. There are simply too many factors that can legitimately impact user experience. Thus, it often becomes necessary to boil things down to a few important factors.
The simplest way to ensure smooth user experience is making sure that the app testing stage goes smoothly.
App testing is important because it is the stage where developers can actually check whether an app meets certain user experience standards.
There are two ways commonly used to test an app – using an app emulator or a real mobile device.
To completely optimize user experience, it is important to use both these methods. Average retention rates of most apps are generally low because they never go through proper testing. Developers must invite everyone involved in the development process and other stakeholders to thoroughly test the app. This brings to light various important bugs, broken links and other issues.
Some of the things to check during app testing include-
- Ease of navigation within the app
- Fast loading time
- Ability to operate at low internet speeds (if app requires internet connection)
- Design consistency across different mobile devices
- Smooth user onboarding
- Presence of bugs and broken links
These factors are in no way the sum total of a mobile app’s user experience. However, optimizing them does ensure that an app can move towards achieving a viable user retention rate.
When gamers discover a new game, they often keep playing it until they’re finally bored of it. This period of time can be anywhere between a week to even a few months. Games have the ability to stimulate people because they challenge them to perform at an optimal level while keeping things fun and interesting.
Gamification refers to making users perform normal tasks within the context of a game. For instance, many apps award users badges and ribbons if they perform certain activities. These activities can include anything from inviting a friend to use the app, signing up for the app, or buying a product.
Gamification works and there is science to back it up. Dopamine and games are closely linked. If your mobile app can sufficiently challenge users and make them feel rewarded on meeting the challenge, your user retention rate will skyrocket.
Gamifying an app is not an easy task. For example, gamifying an ecommerce app built with a WooCommerce app builder is difficult because there is no easy way to make buying stuff seem like a game.
You need to create an environment within the app where users value the rewards you give them. Even awarding something as simple as scratch cards after making a purchase can work, but the hook must be convincing.
Have you ever specially opened an app on your phone after seeing its ad on social media or a promotional email in your inbox?
You can find many definitions of marketing online. Here’s what it really boils down to – attention.
Your app is amongst billions of other apps in the market. Even if someone downloads your app, it still has to compete with other major apps on the same device for attention.
Making users download an app is not the end of your marketing journey. You need to keep reaching out to potential users and ensure they come back to your app regularly.
Let’s take the example of something simple – push notifications. If you can send a notification to your users at any time of the day, you can trigger them to come to your app. This is also a form of marketing, only you are now using your user’s device to market the app. The number of people that actually come to your app depends on the format of the notification.
It is important to choose marketing platforms that actually bring people to your app. Do not try to optimize your presence across every marketing channel. That will always lead to a lot of wasted days and weeks on platforms that never really bring anyone to your app. Good marketing can continue bringing users back and growing your retention rate.
The final factor we will cover in this piece is app performance. There are again many things you can list under app performance. However, we will only talk about one aspect of app performance in this section – the main function of your app.
Let’s say you used an online app creator for Android and iOS to build a new app for your blog. What is the primary function of your app?
Enabling users to read your blog posts.
Your first and primary app performance objective must be to optimize this part of your app. Make sure people can access and read any blog you post. A lot of this boils down to making things easier for a user.
The same is true if you have an ecommerce app. The main objective should be to simplify the process of purchasing products. Simplifying the primary function of your app is always a good place to start optimizing app performance.
User retention is a KPI that very accurately tracks the contribution of an app in helping grow a company’s brand value. Your app will not command a credible position in the mobile app world if users don’t visit it regularly.
This piece covers the importance of user retention as a factor. In addition, it also discusses how it can be optimized.