THE ULTIMATE GUIDE

TO MOBILE APP
USER RETENTION
 Contents

How to Define User Retention...................................................................................................... 2

Different sides of the same coin - User Retention and Churn.................................................... 2

Why is User Retention important?............................................................................................... 3

Churn.............................................................................................................................................. 4

Retaining Users Through Your Engagement Strategy.................................................................. 5

Turn more new users into Model-Users...................................................................................... 5

Onboarding Engagement.............................................................................................................. 8

Motivating new users.................................................................................................................... 9

Capture Wavering Users Early..................................................................................................... 9

No Permission for Notifications - no problem............................................................................ 10

Relevance, Relevance, RELEVANCE............................................................................................. 10

Proximity Targeting....................................................................................................................... 11

Personalization isn’t the silver bullet............................................................................................ 11

Learn, Refine, Measure................................................................................................................. 12

The Ultimate Guide to Mobile App User Retention
Whether you have an engagement strategy that you want to make more of, you’re unsure of the
benefits of focusing on user retention or perhaps just looking for a more definitive approach to
retaining mobile app users long term, this guide is for you. We will cover the reasons why making
user retention a primary focus will be a more viable approach to marketing your app and how
you will be able to implement this strategy going forward.

Whatever the reason, the goal is the same. To deliver more success with your app by focusing
more effort into your user retention strategy.

How to Define User Retention

There isn’t really a solid definition of what Mobile App Retention is. So, for the purposes of this
guide we’ll take the most common definition. Someone who returns to the app at least once in
30 days.

RETENTION RATE

# Users at End of Period - # of Users Acquired During Period

x100
# Users at the Start of the Period

The reason there’s no standard definition of timespan is it really depends on the nature of the
app and user cadence. For some apps the expected use will be multiple times a month for highly
engaged users, a train commuter app for example. For others once a year may be what’s expected
- such as a snow ski tracking app used on your annual ski holiday. So, to really understand user
retention you need to first define what the expected behaviour will be from your ideal super-
user. Then benchmark your users against this expected cadance to create what we call your
‘Model-User’.

Sounds complicated maybe, but definitely worth defining up front, if you really want to own
mobile app retention.

Different sides of the same coin - User Retention and Churn

To really understand user retention you also need to understand Churn. Churn is defined as:

CHURN RATE

# Users at Beginning of the period - # Users at the End of the Period

= Churn
# Users at the Beginning of the Period

If you focus on why customers churn and leave your app then you can better understand what
you can do about driving up user retention. We’ll explore more of that in a moment.
Why is Retention Important?
Customer churn is one of the biggest challenges facing any app. The cost and effort to acquire new
users is quickly undone if a new customer doesn’t fully engage with your app, becomes a zombie
user or uninstalls all together. The simple math of Customer Acquisition Costs and Customer Life
Time Value means if the cost of you acquiring a new user is higher than the average lifetime value
of your app user, plus some operating costs, then the app will never be commercially viable.
Sure, you can work all ends of the equation to get things to work, like reduce acquisition costs, or
grow the revenue you get from your users, but the easiest way is to focus on User Retention. The
more customers you hold on to, for longer, the more viable your app is.

CUSTOMER ACQUISITION COST

Cost of Sales + Cost of Marketing

= CAC
New Customers Acquired

44% of businesses still say their focus lies with acquisition while only 18% prioritize retention. We
think that’s a scandalous figure and these customers are most likely missing a trick or two. So,
we’d question is an acquisition-based strategy the best method of achieving the desired results
for apps?

COSTUMER LIFE TIME VALUE

(Average Purchase Value - Average Purchase Frequency) x Average Customer Lifespan

Sure, the “right” answer is to do both really, really well. For this reason many larger apps have
dedicated teams focused on Acquisition and Retention. There is an argument to say that this
is a decent approach, but can also be highly adversarial internally. Unless there is a very clear
understanding of the “Model-User” and acquisition is closely measured on acquiring said Model-
Users, retention will be an impossible task. Stuffing the app download stats with high numbers
of low value users, many of whom never fully onboard or engage with the app will mean the
Retention task is close to impossible.
Churn
As mentioned previously, this process is the reason apps have such a low retention rate. Users
download an app, don’t immediately find it useful, get bored or are done with it after one use,
this leads to uninstalls. Churn equates to a loss of 71% of new downloads in just a 90 day period.

Those marketing an app should ask themselves if spending the majority of resources on
obtaining new users is bringing a life-time value to your app that is greater than the spend.

“CHURN EQUATES TO A LOSS OF 71% OF NEW DOWNLOADS IN JUST A 90 DAY PERIOD.”

The bottom line is, you can spend your budget on obtaining masses of users but without also
increasing your efforts to retain users, only 29% will still have your app installed 3 days later.

Gartner report that 80% of profits will come from just 20% of your existing customer base. This
20% that have kept your app are the ones that are furthering your business. Keeping just 5% more
of acquired downloads can see up to a 95% increase in profits.

This gives us 4 critical approaches to becoming more profitable:

Reducing the percentage of users that churn/ retaining more users in the first instance

Creating an engagement strategy to encourage repeat users that are of more value to
your app

Understanding who your Model-Users are, their characteristics and user patterns. Then
have engagement strategies to turn more Casual-users into high value Model-Users

Analyzing where you have attracted most of your Model-Users in the past, understanding
what messages prompted them to become users in the first place and then doubling
down on those media sources, will ensure quality in user acquisition.

“KEEPING JUST 5% MORE OF ACQUIRED DOWNLOADS CAN SEE UP TO A

95% INCREASE IN PROFITS.”

So, retention is vital to the sustainability of your app and in a competitive market can help you
create customer loyalty. When marketing an app it’s vital to have a well thought out retention
strategy, using all available tools at your disposal to see a positive change in the retention rate of
the app.
Retaining Users Through Your Engagement Strategy
Smart, informed, relevant, personalised user engagement is how you turn Casual-Users into
Model-Users and hold onto them for longer.

Mobile App Marketers have a wide range of tools and technologies to help them. But the tool
is only as good as the person using it. So, having a clear strategy on what you want to achieve
and then deploying the best tools to achieve this is important. We’ll explore some of this in the
following section.

Turn more new users into Model-Users

Catching new users early is the key. But actually it starts before they even download the app
in the first place. The way you define your app in the app store, the promotional strategies and
messages you put out to attract new users will all have a huge influence on the expectations that
users have when they first open your app. Set vague expectations or over-state the benefits of
your app, and you may attract users, but if the first time login for the user does not immediately
reinforce the value the user was expecting you can bet they won’t hang around.

ACQUIRE BETTER USERS

Use App Store Optimization tools to make sure your store listing is up to date, compares well
against your competition and most importantly ranks well for the key search terms that you’d
expect your Model-Users to employ when searching for your app.

ASO RANKING FACTORS

Summarized for Apple App Store & Google Play Store
4.3

App Name
4.3

App Subtitle App Description 3.8

Keyword Field Backlinks

2.5

In-App Purchases
3.9
Rating & Reviews

Update Frequency 4.9

Download Statistics

Engagement & Usage Metrics 1.5

4.2
DEEP LINKS & DEFERRED DEEP LINKS
Use Deep Links and Deferred Deep Links in your
promotional activity to draw new users into your app
AND re-engage those who already have the app. They
work by knowing whether the app is already installed
on the device and if it’s not, will redirect the user to the
app store to download your app. They then take the
user directly to the relevant section of the app. Make
the links unique to each promotion so you can then
track where the download came from. Good Deferred
Deep Link products will let you see exactly where
your downloads have come from so you can see not just which sources are delivering the most
volume, but more importantly which sources are delivering the higher number of Model-Users.
That way it’s clear where you need to double down on marketing spend.

So the key point here is no amount of smart engagement strategies will convert a poor download
into a Model-User. Like a good meal, quality ingredients and a good chef is what counts. When
you get the right users into your app, then the real work starts to ensure they onboard fully, see
the value of your app early and become regular users.

Let’s assume you have that bit right and your acquisition team is bringing in the right profile of
user. The “First-Touch” onboarding experience will make or break the relationship you have with
your new user. Make it smooth and slick and more fresh users will fully onboard the app. The
more users that fully onboard, and grant you permission to send them messages, the greater the
chance you have to show them the value your app as to offer, keep them motivated, keep them
coming back and with intelligent, informed, timely, contact with them turn them into the Model-
Users you need to make your app a success.
Onboarding Engagement
As we said catching new users early is essential. Here are a few things we’ve learned work well.

KNOW THE PROBLEM

The adage goes, you can’t fix a problem you can’t
clearly see. So to maximize the number of new
users that fully onboard your app you need to see
the bleed-points in your onboarding flow. Make
sure you use App Analytics that lets you clearly
see your onboarding funnel and maps all the
onboarding steps. Measure, of course, the number
that start the flow and the number that successfully
complete each step in the onboarding flow. Also
the duration, how long does it take, start to finish
and how long does each step take.

AUTOMATED MESSAGING
Clearly seeing how users are onboarding will let you see
areas you can improve (both shorten the time it takes
to complete and common areas where users abandon
the onboard flow). Also using these analytics events as
triggers for automated push notifications means you
can trigger messages to the onboarder to encourage
them to complete the full set up.
Motivating New Users
The first few days and weeks after a new user downloads your app is the “Golden Time”. The
time when users are motivated to use your app and explore all it can do for them. Fail to capture
their attention and they’ll quickly churn. Motivate them, show them all the good your app can do
and you’ll turn more new users into Model-Users.

Build a sequence of New User messages using both Push Notifications (to alert the user that you
have something to tell them) and In-App Messages throughout the first few days and weeks.
Use an analytics service that clearly shows you your historic retention data. Do users typically
top using your app after 5 days, 3 weeks or whatever. Use this insight to time your retention
messaging to draw them back into your app. Tell them things that are important to them, and give
them tips and tricks on how to best use your app, so they quickly see your value.

Use the rich media capabilities of In App messages to show them how to use your app properly
with short video clips for example.

Capture Wavering Users Early

Another important way to boost retention is to
understand changes in usage patterns and then
proactively communicate with users when it looks
like they may be losing interest.

Set up automated notifications that trigger when

someone hasn’t used your app for a while. The
duration of when to trigger these will, of course,
depend on the cadence of your app users.
A couple of days for some apps or a couple of weeks
for others may be right. Whichever time-trigger
is appropriate, set up a series of messages (push
notifications and In App messages) to be sent to users
that don’t access your app.

Again make them motivational, remind them of

the value your app delivers and encourage them
back. Sometimes incentives work well here.
A discount, a temporary free use of a premium service
or whatever you think will best draw your user into
deeper use of your app.
No Permission for Notifications - no problem

Don’t give up on users that don’t give you permission to send

them notifications. It doesn’t necessarily mean they are less
engaged, it just means they prefer not to be interrupted by
notifications. In-App messages, especially where you are
using the badge feature (for iOS) and an inbox in your app,
where this alerts the user that a new message is waiting can
be an effective way to catch users attention and bring them
back to your app. But of course relevance is everything.
Send users messages on topics that they aren’t interested in
is one of the best ways to encourage them to churn. This is
an area we will explore further in the next section.

Relevance, Relevance, RELEVANCE

This is so important it’s worth saying three times.
A huge turn-off for users is to feel like they are
getting spammed by apps desperate to keep
reminding users that their app is still on their
phone.

Make sure you are using a messaging platform

that lets you target messages specifically at the
topics that you know your users are interested
in. Using analytics events to track what a user is
interested in and then send them a personalized
curated message based on this, shows that you
really understand what your users want from
you. An example, if someone looks at a section
of your app or content type frequently, then they
are clearly interested in that topic. Either suggest
to them (with a push notification or in-app
message) that they subscribe to a feed that will tell them when similar new content is available,
or simply subscribe them to that topic feed (some message providers call these Channels or
Topics). This works great if you have regularly updated content on your app, or for e-commerce
style apps where you can see if someone is interested in a product, but doesnt buy. Then in the
future send them a message when the item is on sale.
Proximity Targeting
Great if your app is there to compliment your
physical stores, but also useful if you don’t, but
your competitors do. Used carefully this can
be a great way to drive footfall to your existing
highstreet stores, or catch your users as they
are tempted to visit one of your competitors.

Taking the example above, where you know

one of your users is interested in one of your
products, but has not yet purchased. And
this item is on sale. Then you can trigger a notification telling your user not to buy from your
competitor but instead take advantage of your “Flash-Sale”.

It only works if your app is on the mobile devices. It works by tracking the location of your user.
They have to give you permission to track their location, so there has to be a good reason for you
to ask them to do this. You would then build geofences around your stores, or your competitor
stores and as the user enters this geofence, your Messaging platform would then trigger an
automated message to be sent to that device.

Immediacy and Relevance, all in one.

Personalization isn’t the silver bullet

Some think that engaging with your user is about personalization. We don’t. We have no evidence
that simply starting the message by “Hey Jon, we thought you’d like ….” has any impact on either
Retention or conversion. But as we have already said a number of times, personalization of the
message, in terms of the relevance of the content of the message DOES. It’s important to go much,
much deeper with personalization than the thin veneer of name dropping in your messages.
Learn, Refine, Measure
Even the best thought out retention strategies are not set and forget. It’s essential to first establish
a baseline to measure improvements from, then continually test and refine the changes you
make, in your app and to your messaging, to drive improvement.

Important here is to use an analytics tool that

lets you easily measure the most important
KPI’s of your app. Analytics that measures
your onboarding flow, conversion rate and
time duration (each step and start to finish).
Analytics that let you easily adjust these views
as you change the flow in your app, without
the expense or delay in getting a developer
to implement for you. Be able to easily see
Engagement and Retention stats in your app.
So you know when in the day people use your app, how long they spend in the app, how many
sessions a day/week your Model Users access your app, so you can grow this behaviour on your
soon to be Model Users.

Continually testing and refining both the flow of your app as well as your messaging strategy to
drive positive changes in behavior will inevitably lead to higher user retention.

KEEP EVERYTHING WORKING SMOOTHLY

The last bit, and very very often the part that even some of the most successful apps miss is
carefully tracking the User Experience. All too often this is a view that is carefully guarded by the
technical teams and rarely shared with the Customer Retention Teams. But it can have a huge
bearing on the successful retention of users, even those high value loyal users.

Knowing if the app is performing well, pages are loading quickly (or loading content at all), the
app isn’t crashing and impacting many users is essential to understand the user experience. The
most beautifully designed app will fail if it can’t deliver its functionality efficiently.
Our research shows that there is a 90% probability of a new user deleting the app from their
phone if they experience a slow user experience, content failing to load properly or a fatal crash
in the first 3 sessions from their first download.

Whereas 36% of regular users will consider deleting the app if they start to experience decay in
the user experience. (response times and stability of the app).

Being on top of the technical performance of the app is just as important as knowing what your
users are doing in your app. So to really BOSS at User Retention you need to use a platform that
gives you visibility of both the User Experience of the App alongside the User Behavior. Because
the two are very often interlinked.

“...THERE IS A 90% PROBABILITY OF A NEW USER DELETING THE APP FROM

THEIR PHONE IF THEY EXPERIENCE A SLOW USER EXPERIENCE.”

Knowing that your Churn rate has increased amongst Android users after a specific date and
then being able to map this to a recent new release of your app, where bugs may have crept in
means you can be on the front foot. You can then communicate with users who could have been
similarly affected, telling them there is an update coming, means you catch the problem early and
hold onto users, who otherwise would have been frustrated and deleted your app.

Conclusion
Combining all of these methods into one marketing engagement strategy for your app doesn’t only
increase your likelihood of retaining your hard won audience but also should be the forethought
of all apps in terms of how to move forward as a business and increase revenue.

App marketing after acquisition should involve engaging the user throughout the journey.
Demonstrate value to the user through onboarding and offers, re encourage them with push
notifications and in-app messaging that allows you to continue to engage with users and build
long term relationships. Back end tools such as crash reporting and analytics will ensure the
smooth running of your app and minimize the chance of a negative experience for the user.

Once your app focus moves towards retention you can always remind users exactly why they
have your app downloaded, but if you’re getting your retention strategy right with these methods
then they will be able to tell you themselves.
 More Information
[email protected] | w w w.kumulos.com