The Basics of User Retention and Increasing App Engagement

In the fast-paced world that we live in, customer expectations have been on a slow and gradual rise. As these expectations rise, the job of marketers and businesses is to rise with them and create exceptional products. On area where expectations are at an all-time high is the world of mobile apps. According to a recent study, 80% of users abandon an app less than 3 days after downloading it. In other words, while customer expectations are at an all-time high, user retention is at a low.

So, what can be done to combat this drop-off in user engagement and retention? Some have opted for employing a push notification service, while others stick to more traditional approaches like email marketing. But what is the best solution?

Hoping to help you better understand user retention and app engagement, this article will explore the basics of both. Our goal is that after reading this, you will have a better concept of what the issues are, but also how best to solve them. Let’s take a look.

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Importance of user retention

Ever since the Harvard Business Review published its study on retention rates over 15 years ago, customer retention has become a more prominent marketing model. The study claimed that an increase in customer retention rates by 5% could increase profits anywhere from 25%-95%. As the times have shifted, this has only become more true.

When you compare this to the fact that it costs around 6-7 times as much to acquire a new customer as to retain an existing one, you can see why user retention is so important and vital to a business’s success.

Engaging customers in new ways

It is clear from user engagement metrics that unless businesses are able to engage their customers in new and exciting ways, these trends will continue and customers will continue to churn. However, the good thing about this is that the digital world is full of new ways to do just that.

Here are just a few ways in which you can improve mobile user engagement and by proximity, retain additional users.

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Push notifications

One of the most widely used but potentially least understood forms of user engagement is push notifications. Although they have been around since the early days of mobile apps, only recently have they become a viable custom retention technique. Far too many use this engagement tactic incorrectly, so make sure you know what you are doing before launching your campaign.

For instance, try your best to limit push notification use only for when it is necessary. Since users have to have your app installed in order to receive notifications, you have already gotten over one hurdle. But, if done incorrectly, simply reminding them that they have your app installed might lead to more uninstalls than engagement.

Be quick, be helpful, and be timely. Push notifications are a double-edged sword, just make sure you don’t accidentally cut yourself.  

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Incentivize them

Another interesting tactic for reducing churn rate is to incentivize users to stay with the app. Sometimes, all that users need in order to stick around is a reason to come back to the app. Things like gamification, rewards, or loyalty programs can be the difference between a lifelong customer and your app simply being an afterthought.

The nature of your app will dictate the type of incentives that you should roll out. For example, if you are hoping to boost in-app purchases, try time-sensitive discounts. Whereas if you are operating under a freemium model, you can incentivize your users with usage-based rewards for time they spend using your app.

Easier onboarding

Onboarding users onto your app is one of the most important parts of your user retention campaign. Users who do not have a good experience simply getting started with your app are not likely to forget the bad taste in their mouth and will likely jump ship at the first sign of trouble.

With this in mind, it might be worth taking a look at your current onboarding process and see if there are ways in which you can simplify what you can to make it easier on your users. Here are a few examples of ways in which the process can be tweaked to provide maximized results:

  • Make logins and account creation easy. This involves reducing steps, offering multiple registration options, etc.
  • Teach through doing. Walk your users through exactly how to best use your app. Unless you tell them, they likely won’t take the time to figure it out themselves.
  • Don’t overload them. Instead of showing them every feature right away, teach them how to use features as they organically discover them within the app.

One way to know where problem areas where users are dropping off is by tracking mobile app analytics. Make sure you have the systems in place to track, collect, and analyze these important metrics.

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Personalize their mobile experience

In 2017, mobile personalization is a must. Your users are not all the same, and treating them as if they are is one of the reasons why we are having this user retention discussion in the first place. Furthermore, personalization is no longer simply adding the user’s name into branded messaging, but creating a unique user experience for each individual customer.

There are a couple of ways in which you can do this. One is to work with a user engagement platform to personalize user’s app experience wherever possible. Another would be to segment your audience into distinct user profiles so that you can easily divide your audience into groups that you can then build brand messaging around.

No matter the route that you take to get there, unless you are making an effort to personalize your user’s experience, you are falling behind.

Last thing

Although it may seem as if user retention and app engagement are impossible to perfect, find hope in the fact that as users continue to demand better products, we will continue to rise to meet them. This is the way that progress is achieved, through setting higher and higher goals for ourselves.

So, when you are coming up with your customer retention strategy or working hard on improving your apps stats, remember that you are only making the process better for future users. As Bill Gates says, your worst customers can be your best inspiration. Use the tools that you have at your disposal and starting making a different right now. Today.

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