Lesson 5

Focus on App Retention

The more we talk about defining the critical event for your app — the one that drives growth and helps you meet your revenue and loyalty goals — the more you’ll see the term “app retention” appear. How well you retain users will make the difference between success and failure — between a revenue graph that climbs higher and higher after download and one that drops off.

Simply put, if you can’t retain users and get them to perform your critical event regularly, your app will fail. And as we covered before, because it’s far cheaper and more effective to retain users than draw in new ones, even a relatively small bump in your app retention can make a huge difference.

That also means that app retention doesn’t exist in isolation. Improving retention rates may require you to go back to the beginning — Strategize — and reassess and adjust your app’s core value, initial onboarding, and user experience (UX) flow.

With that in mind, let’s get into the specifics.

The N-Day Retention Model

You’ll hear people in the app industry refer to “N-day retention,” a measurement that tracks the proportion of users who actively use your app on a specific day (N) after their first use. For example, Day-14 retention will tell you the number of users who come back 14 days after their first use. This is an important way to view retention since the number of users returning to your app can, and will, vary widely depending on how recently they installed the app.

If you just launched an app and you’re seeing your retention numbers topple, don’t panic. It’s completely normal. In fact, the average app’s retention drops considerably after initial install for a host of reasons that we’ll get into more specifically in the next lesson, where we will also cover strategies for increasing your retention rate.

For now, just know that only the most popular apps retain a high percentage of active users, and even those lose approximately 50%. In fact, as we previously mentioned, the average user retention rate is closer to 2% at Day 90.

Hopefully you’ll launch that rare app that retains 50% of its users, but be prepared for something much closer to the average. However, if your retention rate is heading toward zero quickly, you likely have a problem that goes deeper than any retention effort can fix.

A zero retention rate, or close to it, means that users just aren’t finding value in your app and you’ll be best served by circling back and concentrating on core mobile app strategy and development, not engagement.

As always, another way to get up to speed on average retention rates for apps in your industry is to examine the competition. You’ll find that even top-ranking apps in your vertical do not have 90% retention at Day 10. Setting a realistic benchmark can help your team improve retention rates moving forward.

Retention and Churned Users

Another metric you’ll look at when thinking about retention is churn rate. The flipside of retention, this is the percentage of users who install and then quickly delete your app and don’t return again. This is another important indicator of the success of your app, and the group of users who are lapsed, or churned, can become a segment of users you’ll want to target. After all, if they showed enough interest to download your app once, they’re more likely to become a core user than someone brand new.

Since you’re already segmenting users for engagement purposes, you will also want to create a segment that tracks resurrected users. These are the users who still have your app installed on their phone but haven’t engaged with it for a set number of days. For example, the passage of 120 days or 180 days is typical for labeling a user as churned, or lapsed. This group is a particularly valuable one to target since re-engaging a lapsed user is far easier than bringing back one who has deleted your app entirely.

Blue Apron sends an email to lapsed users highlighting some of the most popular new recipes that they’ve missed out on. And since Blue Apron already knows individual users’ preferences, it can tailor those recipes to each user’s personalized tastes.

This is all part of the retention lifecycle, and there are more strategies for re-engaging lapsed users, including direct outreach methods such as an email campaign that we mentioned above and push notifications. We’ll cover those in detail in the next lesson.

Long story short, increasing retention while reducing churn is a direct line to creating a valuable user base.

Keep Learning

Next up, we take a look at some of the best practices for improving engagement within your app.

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