Ten Easy Ways to Improve Your App User Retention Rate

User retention, app abandonment, app engagement – each mobile application developer must have come across these words at a certain point. Simply put, all these terms pertain to what you can do to make your customers use your app. Making a mobile application is just a first step on your road to success. Now you need to make your users love it. And in our context, to love means to continue using it on the regular.

So, what is user retention and why is it so important to your startup success? – User retention is the ability of your product to keep customers using it. Once you start researching user retention, you are sure to come across the alarming statistics by Localytics, a platform providing you with a package of tools to measure your application success. These findings clearly say that one user in every four abandons the application after downloading it. Definitely, this is not what you want to happen to your application, thus you should take certain measures to make users come back again and again.

If we get a bit scientific here, what you need to do is to improve your app user retention rate. User retention rate is the percentage of users who stayed with you over a certain period. The user retention rate is calculated by a simple formula:

Retention Rate = ((CE-CN)/CS)) X 100

where:

  • CE is the number of customers at the end of the period
  • CN is the number of new customers acquired during the period
  • CS is the number of customers at the start of the period 

Say, you would like to calculate your retention rate for the period of three months. At the beginning, you had 200 users, and by the end of the period, you have lost 30 users but acquired 50 which means that at the end of the three-month period you have 220 users. Let’s calculate your retention rate:

((220-50)/200 x 100 = 85

Your retention rate is 85%, that is, 85 percent of the users stay with you. Of course, the higher your retention rate, the better.

But why is the retention rate so important? Why don’t we focus on gaining new customers rather than on keeping the existing ones?

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There is a statistic showing that the costs of acquiring a new customer are about five times as much as the costs of keeping an existing one. The same statistic says that an increase in the user retention rate by just 5% may bring a 25%-95% profit increase. Thus, it will be wise to invest in user retention, as it is going to lead to higher profits.

What can a startup do to increase its app user retention? In this article, we’ll look at some of the mobile app retention strategies and see how they can be implemented.

1. Easy and Straightforward Onboarding

This is, probably, one of the most important points you should consider already at the application development stage. You must have heard the common phrase "you have only one chance to make a first impression" hundreds of times. Well, it is applied to mobile applications, as well. If opening an app for the first time user is immediately overwhelmed with tons of new information, complicated settings or multi-stage registration, there is a good chance that the application will never be opened again.

You may say that onboarding is more about customer acquisition than customer retention, as this is the first time they use the application. True, onboarding is a part of customer acquisition, however, it has a big influence on the retention, too. The better the customer's impression of the onboarding, the higher the chances of their continuing to use the app afterward.

How can you organize the onboarding to make users enjoy it? There are several simple recommendations:

  • Start with the value proposition. Here is it important not to focus on the app features, but to emphasize on how a user can benefit from using the application. Seeing the offered opportunities, users can immediately feel that the application is going to be useful for them. For example, the Slack messenger opens up with clear and concise statements of what it has for the user:

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Image credit: Slack

  • Provide multiple registration options. Users will trust your app better if you offer to sign up with their social media accounts. Usually, it’s much easier than creating a new account from scratch.

Before you proceed with implementing the registration functionality, think whether you need registration at all. The purpose of your application may perfectly do without accounts or profiles. Your users will appreciate it if you omit the unnecessary registration step.

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Image credit: Quora

  • Do not pack the onboarding with too many tips, hints, and tutorials. Rather, place them strategically where they are relevant.

“Solar: Weather” application, for example, suggests finger gestures right from the weather forecast screen explaining how you can manage the display with various gestures:

app-user-retention-rate-onboarding

Image credit: Solar : Weather

2. Encouragement of User Investment

By investment, we do not mean investing in your product. By using your application, customers invest their time, effort, resources, and skills. The more they invest, the harder it is to abandon the application. If, for example, you have an upgraded profile on a social network with a lot of friends and followers, you will be reluctant to stop using it. If you have reached a high level in a game with many artifacts, trophies, and achievements in your inventory, you will want to play on.

For example, Duolingo, a language learning app, monitors your progress day after day counting the so-called "streaks". To get a streak you need to use Duolingo several days in a row. Miss a day, and the streak is lost. It seems like no big deal – there is no penalty for breaking a streak, and your language skills remain. However, Duolingo makes a point of it – it sends daily reminders to take a lesson, it congratulates you on completing a daily practice, it gives you badges for keeping the streak for a week, a month, a year. It even offers an option to "buy" streak repair with real money, should you miss your lesson. And you know what – it works! It motivates you to open your app daily and to earn those points. Needless to say, you are improving your language, too.

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Image credit: Duolingo

3. Push Notifications

Push notifications are messages sent from the application backend to the user interface. They are a great way to remind users of your product. However, you should be careful here, as users are often irritated with getting too many messages they did not ask for.

Thus, one of the things you should consider while implementing push notifications is the option to turn them off. This way, a user feels in control of the app and will not get angry to the point of leaving the application for good.

Avoid sending notifications on everything that is happening in your app. Their frequency and content should be in that perfect balance between letting users forget about you and spamming them with dozens of irrelevant messages. Their main purpose is to make users open the app again.

Samsung Health, a fitness app for Samsung smartphones, sends notifications which are, in fact, statements of your achievements. If you’ve enabled the step counter, the app will congratulate you on reaching the daily target. If you have scheduled a running activity, it will remind you of the running to be completed by the end of the day. The notifications are not intrusive, as the app silently counts your steps in the background while you are going along your busy day – and then, voilà, it tells you that, in fact, you have been exercising, too.

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Image credit: Samsung Health

4. Personalization

We all love how our names sound. So, if your app requires user registration, why not address users by their names? This creates the immediate sensation of a personalized approach.

Referring to customers by names is just the easiest way to personalize their experience with your app. However, you can go further and generate notifications based on users’ behavior patterns and previous actions, thus creating unique experiences.

When you sign in to Booking.com, the platform greets you by your first name asking where you would like to go next. Of course, it also stores your previous bookings and searches to suggest trips which may be interesting for you.

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Image credit: Booking.com

5. Incentives

Another means of encouraging users to return to your app is offering incentives. Depending on the purpose and nature of your application, incentives may be different. For example, in a paid application, you can offer a limited time discount to regular users. In free or freemium applications, your incentive can be anything of value for a user – points, badges, trophies, game currency or bonuses.

Candy Crush Soda, a match-three game, urges you to play daily by offering random bonuses every day. “Miss a day and you’ll have to start over!” – the message is clear.

app-user-retention-rate-incentives

Image credit: Candy Crush Soda Saga 

6. Application Updates

Updating your app has multiple benefits – from patching detected bugs to complete redesigns and new feature implementation. In the context of user retention, it also has a certain value. On one hand, users see that the development team continues working on the app. On the other hand, the users see new features and functions and want to try them.

We have all experienced the famous Facebook updates – some love them, some hate them, but everybody agrees that the Facebook experience is never the same. Rounded pictures, new emoji, redesigned menus – these are just a few things that the Facebook team has rolled out recently.

However, their updates are not only about the bells and whistles – the overall functionality is getting more sophisticated. One of the recent additions was live streaming which has immediately become popular. No wonder, Facebook holds the top rank in the mobile app retention rating.

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Image credit: TechCrunch

7. VIP Customer Monitoring

The Pareto principle is applied to mobile applications, too – 20% of your users generate 80% of your revenue. Thus, you should develop a certain methodology of, on one hand, identifying your top customers and, on the other hand, using targeted retention techniques for them.

Your possibilities are quite broad – from personalized offers or birthday greetings to handwritten cards attached to packages with online orders. In general, you need your VIP customers to feel special, to see that they have been offered something unique.

Baublebar, an accessories and jewelry store, makes limited-time offers to its VIP customers on a regular basis. The store sends emails with special promo codes to be used to make discounted purchases. For the customers, the value is also in knowing that they are among the few people who’ve received the offer, and, naturally, their loyalty to the store increases.

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Image credit: Baublebar

8. Feedback and Surveys

Getting to know what your customers think of the product, in addition to serving its primary purpose of evaluating your product quality, can be a tool for increasing user retention rate, too.

Make sure to offer your first-time customers to provide feedback on your product or service. This creates an additional bond between your brand and the customer. And if you offer a certain award for participating in the survey – for example, some bonus points to use in the application – this will urge the customer to come back to redeem the award.

You can also use the same tactics to bring back the clients who used to be loyal but, for some reason, have taken some time off your app. This is what Lancôme did when they organized a quick survey for customers and offered 100 bonus points for the participation.

Besides, surveys are a great source of user-generated content which customers love for the authentic product experience it provides.

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Image credit: Lancôme 

9. User Community

Creating a user community is another tool with multiple benefits and one of them is user retention improvement. You can build a community in a variety of ways – by setting up a forum, inviting users to suggest FAQ items, arranging thematic meetups, encouraging them to comment in your blog or on your business profile in social media.

How can a community influence user retention? Here, you should be very proactive in monitoring your community activity. Using these findings, you can identify users who are not satisfied with your product or have difficulties using it. They are in danger of dropping out, and to prevent it, you should roll out the heavy guns – your support team who can help users make the most of your app.

MyFitnessPal, a calorie-tracking application, supports a forum right on its website where users share their achievements, discuss their fitness routines, and consult on app usage. Besides, you can make friends with other users directly in the application to follow their progress. Of course, for the app owners, this is a great source of user feedback and a tool to monitor the trends within the community.

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Image credit: MyFitnessPal

10. User Retention Metrics and Analytics

Using the retention techniques is just half the battle. You also need to know whether they work. To get an idea of the effectiveness of your retention campaign, you should monitor the following mobile app retention metrics:

  • The average number of users per day or month gives you the idea of how many regular users you have
  • Session length allows monitoring the time users spend with your app. Depending on the nature of the app, the average time needed for a conversion may vary, but once you find the optimal time in your case, you can track users dropping out too soon
  • Time in the application is the average time your users spend on the app on a daily or monthly basis. This is different from session length, as it shows the total time over a period. This property can help to identify certain trends in user behavior and find deviations
  • A number of acquisitions is the number of new users acquired via a certain channel. This parameter shows the effectiveness of a particular campaign or marketing technique
  • Screen flow tracks the user’s progress through your application. This data can be useful to find the most optimal designs and layouts that would appeal to users
  • Retention rate is the percentage of users who return to your app after downloading it. High retention rate keeping over a certain period is an indicator of strong mobile app user engagement and can mean a revenue increase
  • Lifetime value represents the estimated revenue you can expect from a user during the period of their app use. This element can have several purposes, for example, you can calculate how much you can allocate to acquiring new users.

There are lots of analytical tools on the market, and you can select the one that suits your purposes best. Try, for example, Google Analytics, a comprehensive analytical package to provide you with all kinds of metrics and data of your app performance.

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Image credit: Google

We have tried to share with you our knowledge and experience of user retention techniques and will be happy if they work for you, too. Good mobile apps deserve user appreciation, and these methods can make more users get to know and enjoy your product.

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