It’s no surprise that apps are losing customers faster than acquiring them. 90% of all newly acquired app users are lost within the first 3 months. And if you break it down even further, 77% of users churn within the first 3 days.*
One-fourth of all apps get used only once before being discarded.*
The bottom line is this – users are abandoning apps every day, and if there’s one area marketers need to focus on now, it’s user retention and its impact on lifetime value.
What is User Retention?
User retention is simply the measure of users who have tried your product, service, or app and have seen enough value to come back to your app again.
Retention measures the percentage of users that return to use your app over N days/weeks/months.
7 Ways to Improve Retention and Loyalty
1. Take Action before Day 3
We’ve already discussed some mind-boggling numbers around user retention above. To improve these numbers, you need to focus on creating an immediate and immersive app experience to prove value right from Day 1.
A great example of this is Truecaller, an app that is used for caller identification and call-blocking on Android phones.
Truecaller recently came up with a new payment interface. To introduce their users to this feature, they displayed an in-app message after upgrading the app.
This ensures immediate activation of a new feature for a user. We’ve often seen that early adopters are generally more excited about new features and are more loyal to your app.
2. Identify Drivers of Retention and Loyalty
It’s critical to understand what keeps users hooked on your app.
Product Level Drivers – This measures loyalty at the product level. For Uber or Lyft, the product level value could be a completed ride. For Netflix, it could be watched video content. For Spotify, it could be playlists built.
Feature Level Drivers – This measures loyalty at the feature level. For example, an Amazon user may find value from adding an item to a price watch, favoriting a particular item, or getting the item delivered faster using Prime.
Create cohorts and microsegments to identify which features and actions draw users back to your app.
3. Employ the Happy Path Approach
Offer simple experiences with fewer steps for new or returning users.
Duolingo does this well. If you continuously engage with the app, the tests or lessons are difficult. But when a user comes back after a long period of inactivity, the tests are relatively simple. This gets the users on the “happy path.”
When to use the happy path approach:
- During the FTUE (First Time User Experience) to boost activation rate and engagement
- When inactive users return to the app after a long absence
4. Use Lifecycle Communication
Employ lifecycle campaigns to automate key touchpoints in the user lifecycle across onboarding, engagement, retention, and win-back stages. These include transactional messages as well.
At CleverTap, we broadly classify users into one of the following lifecycle stages:
|Onboarding||User registered on the app, did not complete the user profile|
|Engagement||User searched for a specific product, did not add to wishlist/cart|
|Retention||User last ordered food 7 days ago|
|Winback||User last booked a ticket 30+/60+ days ago OR uninstalled the app|
For example, Ola Cabs attempts to win users back with intuitive emails as well as push notifications that encourage users to take rides using Ola Credit.
5. Utilize Deep Linking
Deep linking is extremely powerful. Incorrect — or no deep linking at all — can lead to fragmented user experiences.
Deep linking is used to directly funnel users deeper into your app or website using a uniform resource identifier. This allows app developers or marketers to directly push users to a specific page of interest or apply a coupon code directly among other things.
Since apps generally use multiple engagement channels like remarketing ads, emails, and push notifications on mobile and web, it becomes necessary to use the right link. A nudge that doesn’t lead the user to the right screen leaves them frustrated.
Use deep links to take users to the right section of the app such as:
- Cart/product page in case of abandonments
- Auto-input coupon codes at the checkout page
For example, a travel app user searching for flights to Copenhagen on their desktop is later sent a push notification with a low fare alert for a flight to CPH via the app. After the user taps the push notification, they are immediately taken to the listing page rather than the app home page.
6. Personalize, but Also Customize
The most successful apps master personalization by anticipating their users’ needs. For example, Netflix recommends shows based on what was previously watched.
Customization, on the other hand, is when a user is given the power to choose their own user experience. For example, Carousell gives users the option to customize and save their preferences, thereby reducing friction for every subsequent search. With this feature, the next time a user opens the app, they are shown the listing with the filters that they already applied.
7. Give Users Streaks and Goals
Give users small and definite goals to keep them hooked on your app
A great example of this is Cure.fit. In this app, users collect badges depending on the number of sessions completed. These badges are then used to order food through the app. Other examples are Quizup and Snapchat.