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Retention Rate

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What is retention rate?

Retention rate is the percentage of users who are still engaged with an app after a certain period after download and installation. This is calculated by measuring the number of users that return to the app after their first open within a given time period.

Why is retention rate important?

Studies show that, on average, it costs $2 to acquire a mobile app user. This may not sound like a lot on the surface, but if marketers want to acquire as many users as possible for the maximum amount of conversions, then it is in their interest to ensure that these users are not only onboarded, but engaged, and converting.

There is nothing worse for marketers than to see their acquisition budget and onboarding efforts wasted as users abandon an app. Unfortunately, this a common challenge for mobile marketers. In fact, 80 percent of mobile app users never return after the first open. Ensuring high retention rates gives marketers the best ROI and helps ensure mobile app growth.

How can marketers increase retention rate?

Using the Leanplum mobile engagement platform, customers have seen 9.6x more conversions, 7x higher user retention, and a 17 percent increase in revenue. A number of factors are key here, including using cross-channel marketing campaigns to engage customers at every point in the customer lifecycle, as well as data acquisition, customer segmentation, and personalization.

Increasing customer retention through app engagement

The best way that marketers can increase their retention rates – which can be as low as 10 percent in the first month – is to prevent “churn.” A strong mobile engagement strategy, informed by user analytics, is the best way to achieve this. For example, marketers, from the point of app download, should encourage users to opt-in to push notifications. This messaging channel will alert users to the latest promotions and app updates, as well as encourage them to re-engage with the app at regular intervals.

Marketers can also automate notifications to alert users when they are most likely to engage, based on behavioral data collected by a mobile engagement platform. For example, if a group of users prefer to open emails on a weekend, ideally, messages should be automated to go out then.

How should marketers engage and retain users?

Deciding which message to send is another challenge for mobile marketers looking to engage and retain their users.

No matter the content — app updates, new feature announcements, onboarding and tutorial tips, promotional offers, etc. — the key is sending personalized, well-timed messages, based on user analytics and behaviors. Together or separately, these will incentivize users to engage and (if needed) reconnect with an app. Ideally, marketers should use this content as part of a cross-channel marketing campaign, leveraging channels such as email, push, web push, and in-app, to reach users wherever they are.

Learn more by downloading Leanplum’s Mobile Marketing Trends report Retention: Revealed.