Let’s get sticky - the ongoing challenge of keeping mobile users engaged - AppGo2Market
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Let’s get sticky – the ongoing challenge of keeping mobile users engaged

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There is no doubt here – it’s better bringing less users on board but make sure you have above-average retention rates than bringing a huge amount of low quality, disloyal users – and it’s also cheaper in the long run…
User retention is the current hyped topic. And rightfully so. The industry’s DNA has finally evolved to focus on user retention. Read on to get the huge value of user retention and the terminology around it.

My regular expectation setting:

  1. This item provides free training on the basics of user retention. Once done reading, you are welcomed to proceed to additional related guides (on www.appgo2market.com).
  2. Practical questions that may rise during the reading and are answered in other www.appgo2market.com guides are linked wherever relevant. Enjoy your reading!

Achieving a large volume of downloads is expensive. In fact, it’s becoming more and more expensive, as advanced paid promotion techniques keep popping-up, offering innovative ways to capture users’ attention. When you launch a push-for-downloads campaign, you usually enjoy nice growth rates, and if your campaign runs for enough time in many channels, you can even calculate the cost per user. Except it’s not really per user. It’s per download or install. And that’s a Big difference.

According to apptentive only 40% of new app users will return the following month. 6 months later only 10% will stay active, and after a year only 4% will still be using the app!!!

So it’s hard work converting one install to a loyal, engaged user, a user that keeps coming back for more, and generates revenues, so you can see some return on your investment.

Until recently, app developers were bragging about their number of users, really showing off (based on their number of downloads). Got huge bulk of installs? Great! You rule the world. Your battle is over. If someone needs you, you are on the beach in Jamaica.

But the money is not yet in the bank.. The battle, in fact, had only just begun…

Lately, app developers changed their targets to also include engagement levels. It’s now widely understood that downloads are only part of the picture.

App developers know now that their revenues are dependent on their number of loyal, engaged users. Advertisers using mobile apps as advertising channels and analytics solutions know that as well.  Therefore, if you are interested in making money by enabling ads on your mobile app, expect questions re your rate of ACTIVE users, as well as requests for a variety of stats around retention. Moreover, it is expected that you present those numbers voluntarily when pitching your app. If you say nothing around retention – one would think you have something to hide.. suspicious.. so this is really a must…

Therefore, you must be familiar with basic terminology around user retention, understand the logic behind the related measurements and know the required activities you need to initiate in order to support your engagement targets.

Basic Terminology

  • User Retention – A set of actions designed to maintain your relationship with existing users, focused on increasing their engagement (level of usage of your app).  Therefore, it’s also an activity measure. Your app’s retention rate usually means your monthly active users (unique users, meaning you count each user only once) divided by your total number of downloads (or installs) since the app’s first launched. 
  • User Engagement – Describes the interactions of the user with the app. Engagement and retention are both equally used when describing levels of loyalty or activity.  For our purpose they mean the same. 
  • Loyal users – This is self-explanatory really. It refers to users that are loyal to your app (and brand), and use it often. 
  • Active users– Users that are proactively using the app (as opposed to users that have only just installed the app, or just opt in, but don’t really use it) 
  • Returning users – Users that are opening the app not for the first time (usually counted after a month from first installation) 
  • User’s lifetime value – The average $$ that a user would generate over the entire time he is using the app. Engagement levels obviously highly impact this parameter. 
  • Churn rate – Measures the number of users that have churned. Since it’s hard to tell how many users actually uninstalled the app, you can treat inactive users as “churners”. The period of inactivity before a user is tagged as a “churner” is defined by you, the app developer, in comparison with the app’s normal usage trends. 
  • Dormant users/ inactive users – Users that have not logged in for a while (pre-defined by the developer as mentioned above) – You don’t necessarily know if they uninstalled the app, so they are defined as dormant or inactive…

Measuring user retention

While everybody wants to know what’s considered high retention rates, I don’t think that there are well established industry standards and benchmarks. But you can find some references to average user retention rates per category of mobile apps.  Here is one . You can also search the web for more updated info. Note that retention rates can dramatically vary between categories (games, utilities, social, news and so forth).

Potential advertisers or partners will expect you to share your app’s retention stats, but they can’t really compare it to any established scale. They would, though, compare it to your competitors’ stats, or use it to calculate their potential ROI, if working with you.

3RD party analytics have their established set of definitions and measurement methods, and they vary as well. You could use their metrics or define your specific required data to support your metrics (as you want to measure them) when using their solutions (e.g. “loyal user is a user who logs in at least 3 times a month”).

Internal User Retention Measures

Internal reports looking at retention can help you monitor your performance, identify trends and improve your app. They should therefore include:

  • Active users rate – Number of users who logged in and engaged in some sort of in-app activity (usually measured on a monthly basis) divided by the overall install base (e.g. 25% of the base is active every month)

 

  • Returning users rate – Users that came back on the month of the report (didn’t install on the month of the report but before – e.g., 20% of the active users are returning users).

 

  • Engagement levels – You can define what interests you the most (activity peaks, login volume, number of clicks, searches and so forth).

 

You should be able to filter the data by relevant segments (OS, app version, users’ origin or any other relevant parameter that your analytics enables and interests you)

Those are all retention parameters (which reflect on engagement and usage, rather than distribution).

The reports will help you identify important patterns and trends:

  1. Can you identify a positive retention trend, after a few months of collecting data?
  2. Can you identify a gap between operating systems? E.g., Android performs better. If yes, investigate further. There may be some interesting conclusions that can make for some beneficial action items.
  3. How are you performing compared to competitors (assuming you can get your hands on some of their metrics) or similar apps?

External usage reports

Outbound reporting should support you in engaging partners and advertisers. The better your numbers are, the higher the chances that partners would want to collaborate with you, and advertisers would want to advertise on your app (and willing to pay a premium for that).

So, share the numbers that highlight your success, your excellence. For example, “how many quality clicks you can generate” or “the constant growth of your monthly retention rates”. Anything that will convince partners that you are an established app, on its way to success (or already there but keeps moving up), and that getting involved and invested in your app is the best choice they can make.

Assume that the numbers that are sharing in such external meetings will most probably become public knowledge. So make sure you are sharing only stats that you are willing to have out in the open.

Before you do so, try, if possible, to  look at the data that your competitors are sharing. You don’t want to be either embarrassed (by presenting comparably low numbers), or perceived as unreliable with unrealistically high numbers.  

Wrap up

Keeping your diamonds…

So you see, since acquiring users is costly – you MUST make sure you are spending your money on quality users – users that will become loyal and engaged, and use your app, a lot! This should be a major goal in your planned user acquisition campaigns.

Once you have acquired potentially quality users, you should focus on converting them to loyal, engaged users. Plant retention seeds during the design of the app. Retention is one of today’s main app marketing tasks. If you have a marketing team in place, consider dedicating one person for user retention activities. If you are on your own, make sure you dedicate significant time to retention. And don’t forget to constantly track, monitor and improve on the results. With more than million apps out there, the developers that will survive and flourish are those that will minimize acquisition costs and keep their users on board any way they can. Make sure you are one of those developers!

Tsipi Joseph
Tsipi is one of AppGo2Market.com Co-Founders, a mobile expert and a mentor. Over 10 years of experience in the mobile and marketing industry: Director of Marketing at Telmap, Comverse and marketing professional development director at the American Association of National Advertisers.
Tsipi Joseph
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