Effective Retention Strategies For Mobile Apps

You launched your mobile app, and you are excited about the benefits it can bring to your business. Downloads skyrocket, reviews flood in, and you feel on top of the world. But then things change. Downloads slow down, engagement drops and your once-buzzing app feels deserted. After all, what’s the point of developing a mobile app if no one uses it?

This is where mobile app retention strategies come in. It’s all about keeping those initial users excited and coming back for more. Effective app retention strategies ensure users stay engaged with your app over the long term.

You must be thinking, why is maintaining a healthy app retention rate so important?

A report from Splitmetrics says that with the rising costs of acquiring new users, it has seen a drop. The average cost per acquisition for the entire year 2023 is $2.58, and it has been observed that it was around $3.21 in 2022. Extending the lifetime value of each user is more important than ever.

Take the example from the graph below: on Day 1, 100% of new users are still active, but by Day 7, that number drops to 25%. On average, only about 1/4th of users stay active by the 7-day period. 

This is a big problem because acquiring new users is expensive. 

Business of Apps Research shows that Customer Acquisition Costs (CAC) have increased by 60% over the past five years, now averaging $29 per user.

With high acquisition costs, implementing app retention strategies is crucial for ensuring a healthy return on investment (ROI).

For businesses looking to navigate the complexities of app development, mobile app consulting offers expert guidance and strategic insights. Our mobile app consulting services ensure that your project is aligned with industry best practices and market demands, driving successful outcomes.

In this article, we’ll explore effective app retention strategies and how they can help keep users engaged with your app. But first, let’s discuss what app retention rate means.

Key Takeaways

• App retention refers to the percentage of users who continue to use your mobile app after downloading it. Tracking retention rates helps you understand how well your app keeps users engaged over time, indicating its success in retaining users.
• Retaining users is important for several reasons. It’s more cost-effective than acquiring new users, as existing users are more likely to make repeat purchases or subscribe to premium features. High retention rates also indicate user satisfaction and loyalty, contributing to long-term business growth.
• Implementing effective app retention strategies will bring the success of the mobile app. However, the proper knowledge will be needed about the best practices.

What is the App Retention Rate?

An app retention rate simply tells you how many people keep using your app after they download it. Imagine you open a store, but instead of selling things, you give away cool gadgets. The retention rate for apps tells you how many people keep using that gadget after taking it from your store.

The way to measure what counts as ‘using’ the app depends on what your app does. If it’s a shopping list app, someone who uses it every week to make their grocery list is considered engaged. If it’s a language app, someone who studies for at least 5 minutes each day is considered engaged.

Basically, you decide what kind of activity counts as someone really using your app.

How to Calculate Average App Retention Rate?

Figuring out how many people stick around with your app seems simple, but there’s a little more to it. Here’s the gist:

Basically, you take the number of users using your app at the end of a certain time period (think days, weeks, months) and divide it by the number who started using it during that same period (without counting brand-new signups). Then multiply by 100 to get a percentage.

Retention rate = Number of users at the end of the period × 100 / Number of users at the start of the period

But first, answer these two questions:

What Counts As Using Your App?

This depends on what your app does. User engagement for a shopping list app might be used every week, while for a language app. It might be someone who studies daily for at least 5 minutes. You decide the app retention strategies through the actions taken by someone who is using your app.

How Long A Time Period Will You Look At?

There’s no perfect answer here. Most people track how many users stay after 7 days, 14 days, and 30 days. This helps you see when people tend to drop off.

The tricky is getting the data to do this calculation. Some apps can help you track how people use your app without needing to be a coding wiz.

Why is Calculating the App Retention Rate is Important?

Keeping track of your app retention strategies and comparing them with the competitors is important to understand the value users derive from your product or app. Here are the top reasons why you should calculate user retention rates to track your metrics.

Indicator of Product Value

Imagine you give away a free toy at your store. Lots of people might take one, but that does not mean they like it. If they come back for another top, that shows they enjoy it.

Similarly, downloads don’t mean much. If people keep using your app that’s a sign they find it valuable and solves a problem for them. This means your app is a hit with the kind of people you want to use it.

Financial Sustainability

Keeping users for a long time is essential for a business’s financial health. Users who stick around are more likely to spend money regularly through repeat purchases, subscriptions, or engaging with paid features.

Since getting new users often costs more than keeping current ones, having a high retention rate helps save on those costs and increases revenue, making the business more financially stable.

Customer Lifetime Value (CLV) Enhancement

When users stay with a business for a long time, it increases the total money a business can make from each customer over their entire relationship. An app retention strategy includes customer lifetime value. Boosting is vital for long-term success and growth because it helps businesses use their marketing and operational resources more efficiently.

Insights for Product Development and Improvement

Retained users offer continuous data, feedback, and insights on their behavior. They are valuable for improving and developing products.

Monitoring your retention rate can also show growth trends and help predict future revenue, aiding in high-level planning.

Marketing and Strategy Optimization

Understanding why users stick around helps businesses refine their marketing strategies, target their efforts more effectively, and communicate better with their audience. By focusing on what keeps users engaged, companies can use their marketing budgets more efficiently, achieving better results with less investment.

These approaches will be great for effective app retention strategies, and work as user magnets. It improves and refines marketing tactics based on retention drivers. There are key app retention strategies that enhance long-term success and growth.

Disadvantages of the App Retention Strategies

There are some common challenges you can face while creating your app retention strategies. Here are some of them.

Lack of Granularity

The app user retention rate provides a high-level view of user engagement but misses the specifics behind why users stay or leave. It does not highlight which app features are most valuable or identify pain points causing users to disengage. 

Without this detailed information, it’s hard to pinpoint areas needing improvement. Effective app retention strategies should include deeper analysis to understand the exact reasons behind user behavior, helping to enhance valuable features and address issues that lead to churn.

By digging deeper into user data, businesses can develop more targeted strategies to keep users engaged and loyal.

Time Limitations

Mobile app user retention rates often focus on specific time frames (eg., 30 days, 60 days, 90 days retention) and may not fully capture long-term user behavior or lifetime value. Tracking only the overall average user retention rate for apps can miss current trends.

For example, if you improve the user experience or add features, the retention rate may go up, but if you are not using cohort analysis, you might not see this change.

Effective app retention strategies should include cohort analysis to better understand and respond to changes in user behavior over time. This approach helps capture a cleaner picture of user engagement and retention.

Potential Misinterpretation

High retention rates are usually viewed positively, but they can be misleading without proper context. For instance, a high retention rate in an app with a small user base may not be as significant as a slightly lower retention rate in a mobile app with a much larger user base.

Effective app retention strategies should consider the size of the user base and other contextual factors to provide a more accurate picture of user engagement. This approach ensures that retention rates are interpreted correctly and that the true impact on the business is understood.

Overemphasis on existing Users

Focusing too much on app user retention can lead to neglecting the acquisition of new users and missing broader market opportunities. While keeping existing users is important, a balance is needed to ensure growth app retention strategies also include attracting new users and expanding into new markets. Effective app retention strategies should consider both retention and acquisition to drive overall growth.

Resource Intensive

Improving retention rates often requires a lot of investment in user experience research, product development, and marketing strategies.

Effective app retention strategies demand significant resources, which can be costly and time-consuming. But are essential for long-term success.

Proven Mobile App Retention Strategies

User engagement for your mobile app is important. You need the metrics to determine the success of your app. Just downloading it and forgetting about it is not the solution, people need to interact with your mobile application.

Here are a few tricks to keep people coming back.

Simplify the Onboarding Flow

Onboarding flow of Customer

As you have heard the phrase “First impression is the last impression”. Just like that the first impression includes of your mobile app will be the onboarding process. Make it as easy and intuitive as possible because you only have about 20 seconds to impress users, before they decide to leave.

A simple and intuitive onboarding experience encourages users to explore your app and discover its features. To provide a seamless onboarding experience, follow these best practices.

• Highlight your app’s core features so users know what to expect.
• Avoid overwhelming users with irrelevant questions, only ask what is necessary.
• Keep the sign-up process short and easy, offering options to register via social media accounts like Facebook or Google.
• Skip the obvious explanations, don’t extend the onboarding process unnecessarily by explaining navigation structures or icons that are self-explanatory.

When users open your app for the first time, you want them to think, “This is exactly what I was looking for.” following these steps will help improve the rate of your app’s retention strategies.

Ensure Good Performance

To boost customer retention, you must ensure your app performs well. In today’s fast-paced world, people have little patience for slow or buggy apps. If your app is sluggish or has frequent errors, users will quickly switch to a better alternative. Nothing is more frustrating than an app that doesn’t work properly.

To ensure good app performance, start by reducing crashes, improving gesture recognition, and decreasing loading times. But that’s just the beginning. Regularly monitor overall app performance, and fix any errors or bugs immediately. Addressing these tech issues promptly is key to keeping users engaged and satisfied.

Deliver a Personalised User Experience

Everyone likes to feel valued, and this applies to mobile apps too. Personalizing your content can lead to more loyal users who appreciate a customized approach. Surprisingly, many apps still don’t tailor their content to users, missing out on a key opportunity.

To achieve this, use the data at your disposal, one of your most powerful assets. By understanding your users better, you can offer a more personalized experience.

What kind of data is useful? Information about the user’s location, interests, age, gender, app usage frequency, behavior, and conversion history can help. The more data you have, the more personalized your app can be.

There are two types of personalization:

• Static Personalization: Factors that stay the same, like using the user’s name in notifications.
• Dynamic Personalization: Factors that change over time, like user behavior or purchase history.

A great example of successful personalization is Spotify. They use personal data to create customized playlists, leading to more loyal users and a better experience for music lovers. Effective app retention strategies often include this kind of personalized approach to keep users engaged and satisfied.

Source: Spotify Newsroom

Read More: Decode the cost to develop an app like Spotify

User Feedback

Want to keep your users engaged and interested? Listen to what they have to say by gathering valuable user feedback. You can do this by sending user feedback. You can do this by sending surveys to your target audience, asking about their experiences with your app and whether they’d recommend it to a friend.

Another great source of information is app ratings and reviews on app store pages. Users often share their opinions or give star ratings. Which users usually check before downloading any mobile app. See what reviews users leave on Google Play or the iOS App Store and use them to improve your app.

If users point out issues or suggest improvements, that’s even better! This feedback helps you identify problems and areas for improvement. Effective app retention strategies include regularly gathering and acting on user feedback to keep your app evolving and meeting user needs.

Use In-app Messages

In-app messages are targeted notifications a user receives while interacting with a mobile or desktop app. There are several types.

• AI Chatbot Solution: Pop-up windows with personalized messages offering help and welcoming new or returning users.
• Product tours: Guides that take users step-by-step through key features, mainly in desktop apps.
• Mobile carousels: Full-screen notifications that onboard new users and inform them about app features or promotions.

Many users are willing to be interested in in-app messages. In-app messaging allows you to drive timely, personalized messages based on user data and activity. It’s one of the most powerful app retention strategies, helping to keep users engaged and informed.

Send Push Notifications in the Right Way

Push notifications can effectively grab user attention and keep them returning to your app, but only if used correctly. Intrusive notifications won’t engage users and may lead to uninstalls if they find the messages meaningless and annoying.

To make push notifications effective, follow these guidelines:

• Personalize notification: Generic messages are a turn-off, so make your notifications relevant to each user.
• Find the balance: Avoid overwhelming users with too many notifications.
• Timing is crucial: Send notifications at the right time, considering user behavior and the content of your message.
• Include a Call To Action (CTA).

Learn from Netflix’s approach to push notifications. They don’t spam users with meaningless messages but remind them of shows and movies they want to watch. This strategy can significantly boost user retention. Effective app retention strategies include sending well-timed, personalized push notifications to keep users engaged.

Netflix Push Notification

Read more: Decode Netflix System Design and Backend Architecture

Reward Loyal and Engaged Users

People love rewards. In fact, 69% of them look for reward programs for loyal customers when choosing an online store. Offering rewards, discounts, or referral programs makes users feel like they got a great deal, saving money on products or services they’d buy anyway. It also helps you stand out from competitors.

Canadian businessman Gabe Zichermann created the SAPS model (Status, Access, Power, and Stuff) to show the most effective ways to engage and retain users. Giving away free or discounted items (Stuff) is costly and less effective. Instead, focus on cheaper yet powerful rewards, like indicating high user status.

Here are some reward types for loyal customers:

• Time-limited discount for the next purchase (Stuff)
• Joining a VIP program (Status)
• Access to freebies (Stuff)
• Access to premium content (Access)
• Moderator status to control other users’ activities (Power)
• Immediate access to updates and new features (Access)
• Early access to new products (Access)
• Badges or leaderboards indicating high user status (Status)

Incorporating these rewards into your app retention strategies can significantly boost user engagement and loyalty.

Create a Visually Stunning User Interface

Design matters—a lot. In fact, 94% of factors influencing first impressions are design-related. People often judge your app based on its appearance, so investing time and money in a beautiful, eye-catching UI is crucial. A visually stunning interface can attract, engage, and retain users. If you need inspiration, check out our design board for some great ideas.

App Store Optimization

With millions of apps available, standing out is essential. App Store Optimization (ASO) increases your app’s visibility in search results, making it easier for potential users to find. Better visibility boosts your chances of attracting and retaining users. ASO not only brings more users but also attracts those genuinely interested in your app. 

By optimizing your app’s metadata and descriptions, you can reach a targeted audience that aligns with your app’s value, leading to higher retention rates. Effective app retention strategies include both stunning UI design and smart ASO to keep users engaged.

Add New Features

User needs and preferences change over time. By adding new features that meet these evolving needs, you show that you’re listening to your users and adapting to their requirements. Introducing new features encourages users to explore your app further. Highlight the value of these features through targeted notifications and onboarding experiences to inspire deeper engagement. This sense of discovery keeps users interested and improves retention.

App fatigue is real. Users can become bored if an app feels stagnant. Adding new features keeps your app dynamic and interesting, making users more likely to stay engaged. Effective app retention strategies include regularly introducing new features to keep the experience fresh and exciting.

Use Email Marketing

Email marketing is a powerful tool to connect directly with users. It allows you to send personalized messages based on user preferences and interests, creating a sense of individual attention. This personal touch strengthens user bonds and increases engagement with your brand.

Email marketing also enables you to segment your user base by demographics, behavior, or preferences. By sending highly relevant emails to specific groups, you increase the chances of capturing their attention and retaining their loyalty. Incorporating email marketing into your app retention strategies can help keep users engaged and connected.

Conduct A/B Tests

A/B testing lets you experiment with different app variations to optimize user experience and engagement. By comparing performance data, you can identify what resonates best with users and make informed improvements. This data-driven approach ensures your app evolves to meet user needs, enhancing engagement.

A/B testing also allows for personalized user experiences by creating variations targeting specific user segments. Tailoring your app to different preferences makes users feel it’s designed for them, boosting retention rates. Integrating A/B testing into your app retention strategies helps you continuously refine and improve user satisfaction.

Final Thoughts

Ensuring high app retention rates is essential for sustaining user engagement and maximizing ROI in today’s competitive app market. 

By implementing effective strategies can bring out the ideal mobile app in the market.  Keeping the existing customers can be tough because it requires ongoing effort and changes within your business.

However, the rewards are significant. Customers who stick around tend to spend more over time and bring in more profits. Prioritize developing lasting relationships, providing personalized service, listening to feedback, offering loyalty rewards, staying competitive, and keeping your employees happy to retain customers for the long haul.

If you prioritize user retention, you not only enhance your app’s value proposition but also build a loyal user base that drives sustainable growth.

Bring out the essence of your mobile app through best retention strategies

FAQs