A Guide to Improving Your Mobile App Retention Rate

Having a strategy to acquire mobile app users is just the beginning. You can utilize various methods such as app store optimization, influencer marketing, and paid ads, but what happens after you've gained many new users? Keeping users engaged and active is the key to maintaining profitability and sustaining app growth. It is where an effective app retention strategy comes into play. The mobile app retention rate is an essential metric for the success of a mobile app. It measures the percentage of users who continue to use an app after downloading it.

Retaining users is crucial, but it's not always easy. With so many competing apps available, it is essential to have a strong retention strategy to keep users engaged and active. In this blog post, we'll explore some effective strategies for improving mobile app retention rate, which can help you build a loyal user base and drive long-term success for your app.

What is the Mobile App Retention Rate?

A mobile app retention rate is the percentage of your users who remain actively engaged with your app over a specific time. Retention rates are typically measured on Day 1, Day 7, and Day 30.

Source: Statista

According to Statista, in the third quarter of 2022, the retention rates of different app categories varied significantly after 30 days of installation. News apps stood out with a retention rate of over 11%, while education apps had a low retention rate of just 2%. Entertainment apps had a slightly higher retention rate of 3%, while shopping apps showed a retention rate of around 5%.

Why is user retention important?

You can transform your company's development path if you make retention your primary objective for growth. Increasing user retention and reducing churn is the key to forming a base of loyal, interested users and ensuring long-term growth. A company that retains customers grows its profits faster than one that does not.

Returning customers have a higher lifetime value (LTV), increasing profitability. When analyzing your mobile app retention rate, pay attention to mobile app retention metrics such as daily active users (DAU), weekly active users (WAU), and monthly active users (MAU). That is why app retention rates are so important; losing a customer at any point along the buyer's journey is bad for business.

How to Calculate the Mobile App Retention Rate

To calculate the mobile app retention rate, you must identify the number of users who continue to use the app after a particular time (usually a week, a month, or three months) and the total number of users who downloaded the app during that same period.

The formula for the mobile app retention rate is:

Retention rate = (number of users who continue to use the app after a certain period) / (total number of users who downloaded the app during that period) x 100

For example, let's say you want to calculate the one-month retention rate of your app. In the first month after launching the app, you had 10,000 downloads. After one month, 6,000 users were still using the app.

Using the formula above, the one-month retention rate would be:

((6,000 / 10,000) x 100) = 60%

It means that 60% of the users who downloaded the app continued to use it after one month.

What constitutes an excellent mobile app retention rate? You've done well if you keep a quarter of your users on Day 1. However, the average app retention rate will vary depending on the app category and should be calculated through testing over time.

Businesses need mobile app retention metrics to understand their app's performance and identify improvement areas. By tracking these mobile app retention metrics, organizations can recognize trends and patterns in user behavior, make data-driven decisions, and enhance the overall user experience of their app.

Benefits of Achieving the Appropriate Mobile App Retention Rate

App retention determines how long users stay engaged with your app after installing it. Retention is critical to your app's longevity, sustainable development, profitability, LTV, and long-term success. A high mobile app retention rate demonstrates your application's level of customer loyalty. Returning users generally indicate that you provide positive, beneficial, and rewarding experiences.

Good retention drives revenue and increases the profitability and longevity of your app, ensuring a consistent source of income and opportunities for future growth and expansion. Furthermore, retention marketing is less expensive and requires fewer resources than user acquisition. Finally, effective retention can help with user acquisition because satisfied customers can recommend their services to others. In other words, rewarding your users with beneficial app experiences increases the likelihood of referrals.

Mobile App Retention Metrics for Measuring User Engagement

You must monitor user engagement throughout their journey with your app if you want to avoid low retention. It implies that it's essential to remain aware of other crucial metrics.

• Churn rate: You want to keep your churn rate as low as possible while pushing for the highest mobile app retention rate possible. The churn rate describes the percentage of users who leave within a specified time. Maintaining a low churn rate encourages users to stick around for a longer time, which increases overall revenue for the product and company.
• Daily and monthly active users: DAU counts the number of individual users who interact with the app daily, whereas MAU counts the number of unique visits each month. These key metrics show whether the app provides users with the expected and desired value and how frequently they use it. Typically, app interactions or sign-ins are used to measure this.
• Average session time and frequency: The average session time refers to how long a user typically stays in an app from when it’s launched. Based on this idea, satisfaction increases with the length of time spent. It's also helpful to track how frequently people use your app. Frequent sessions indicate a significant investment in your app.
• Upgrade rate: It is the percentage of your app's users who have upgraded to a newer version. It requires two figures to calculate: the number of users who upgraded during a specific time and the total number of users. Divide the first figure by the second. For example, if 10 users chose to upgrade in January and there were 100 users by January 31, the upgrade rate for January was 10%.
• Crashed sessions: The number of crashed sessions over a predetermined time frame is another measure worth tracking. A user may rapidly leave or uninstall an app with just one crash during a crucial time. So, it is essential to determine the precise situation that causes a crash and fix it immediately.

Increase Mobile App Retention Rate: Best Practices to Consider

To keep your loyal customers, you should implement some best practices to increase the mobile app retention rate.

• Offer a seamless onboarding experience

Customizing and personalizing your users' onboarding is the first step toward increasing retention. It is the process of demonstrating your app's features to customers. As a result, onboarding should be quick, accurate, and smooth. Users should be able to navigate through the app without any difficulty. Ensure that your app's onboarding process is easy to understand and provides all the necessary information for the user to get started. 

An image or animation may be the most effective way to capture a user's attention or demonstrate how to use your app. Consider using engaging visuals to make your users' onboarding as simple as possible. Ending your onboarding with a call to action can help you increase retention. For example, ask them to join a mailing list or enable push notifications. After demonstrating the value of your app throughout onboarding, this is an excellent opportunity to incorporate users into your retention strategy.

• Personalize the experience

When it comes to retaining your users, personalization is essential. It strengthens the relationship between the user and the app. When customers use your app, they value a highly personalized experience. 

Personalization can include:

• Using the user's name to address them.
• Making useful suggestions.
• Providing necessary offers.
• Recognizing user preferences.

By 2026, it is estimated that the global revenue of customer experience personalization and optimization software will exceed 11 billion U.S. dollars. You can expand your UX through one-on-one interactions and provide a real-time, personalized experience. In-app messaging and live chat are the best routes for delivering support, fixing issues, and helping consumers complete transactions.

• Track data in the initial stages

To ensure the success of your mobile app, you must track and analyze user data from the beginning. By monitoring user behavior, engagement, and interaction with the app, you can identify areas for improvement and optimize the user experience.

Begin tracking user data as soon as they download the app and analyze their interactions to determine why some users may discontinue use after the first day. For example, problems with the onboarding process or excessive pop-ups may discourage users from using the app. Examining user sessions is an effective method of gaining valuable insights into how users use the app. By monitoring user behavior and engagement, you can better understand what features or functions users find most useful and optimize the app accordingly.

• Test your app in beta mode

Increase your app's chances of launching with a high retention rate by beta testing it with an invite-only audience. This strategy can help you identify significant issues or bugs that could decrease user retention. By inviting users to provide feedback during the beta test, you can optimize the user experience and improve the app's overall quality before its official launch. In addition, beta testing can build brand loyalty by giving early access to enthusiastic users, even before the app is available in the app store. By following this process, you can ensure that your app is in the best possible shape when it's released.

• Perform a soft launch

Before launching your app, you can conduct a soft launch to test and optimize its performance through A/B testing. A soft launch involves releasing your app in a smaller region to identify areas for improvement before expanding to a larger audience. This approach is similar to beta testing and can help you achieve high retention rates when you launch on a larger scale. It's important to gather user feedback during the soft launch and make any necessary improvements to enhance the overall user experience.

• Push notifications

By sending push notifications directly to a user's device, you can increase the chances of keeping them engaged with your app. These notifications will appear on their lock screen and include anything from new offers and features to progress updates. Providing users with valuable information and incentives through push messages is an effective strategy for improving retention rates and encouraging continued usage of your app.

To ensure user satisfaction, it's crucial to utilize notifications wisely and avoid overwhelming them with excessive alerts. Bombarding users with messages can cause frustration and result in disabling them altogether. Instead, optimize the timing and frequency of notifications to engage users strategically.

• In-App messages

In addition to push notifications, in-app messages provide a powerful way to connect with your users and boost retention rates. However, it's essential to use both strategically and avoid sending duplicate messages. To avoid disturbing users and to provide a positive user experience, ensure in-app messages are relevant and personalized to your target audience. Segmenting your audience is an effective way to deliver messages that resonate with users and foster more robust engagement.

• Email marketing 

Email marketing has become a popular retention strategy for numerous businesses. By utilizing emails, companies can communicate with their users effectively and draw their attention toward their apps. For example, one can create an email list and inform users about discounts, offers, or the latest updates. Moreover, ecommerce applications can send reminders to users about their abandoned carts, which often motivates them to complete the purchase.

More consumers prefer communication from businesses through email over other mediums. Therefore, creating an email strategy that provides valuable information to your recipients to entice them to open and follow through with your intended call-to-action is crucial. In addition, using email marketing as part of your promotional tactics helps you improve your mobile app retention rate.

• Gamification

It is the process of adding game-like features to a non-game app. These features enhance the interaction and make it more enjoyable and engaging. Apps frequently include points users can accumulate by performing a specific action and then redeem for rewards. Users are more inclined to stick around if they gain something from using your app. Elements such as rewards, badges, progress displays, and digital products encourage users to continue using the app. It demonstrates that they're completing or fulfilling their objectives and improves the user's experience with your app. Including a social share button is an excellent way to encourage these users to share their achievements with their peers. Others will be captivated and will download your app.

Conclusion

Improving your mobile app retention rate is crucial to the success of your app. By focusing on user engagement, personalization, and customer feedback, you can create a more enjoyable and meaningful user experience. It's essential to regularly analyze your data, identify areas for improvement, and implement changes that will enhance the user experience. Eventually, retention is about providing a customer experience that meets the requirements of your intended audience. You can create a loyal user base and ensure the long-term success of your mobile application with the right strategy and mindset.