Retention rates are a crucial app metric, and AppsFlyer’s Joen van Driel has advice for app marketers on how to influence and improve them.
The age old saying that goes ‘There are plenty of fish in the sea’ takes on a whole new meaning in today’s app economy. With 2.89 million apps in Google Play and 1.96 million apps in the App Store, users have been spoiled for choice, making lack of engagement and churn the biggest pain points for app marketers.
- Every one in two apps is uninstalled within the first month of download, with “not in use” being the primary reason (39.9%).
- 90% of users who engage with an app – even once a week – tend to stick around.
This most likely means that if you fail to meet users’ increasingly high expectations, you’ll end up witnessing most of them churning, therefore low retention rates or high uninstall rates.
Retain users to sustain growth
In today’s obscenely competitive mobile-first business landscape, retention rates have become a crucial app metric, empowering marketers with the data they need to effectively monetise their apps with ads or in-app purchasing opportunities. It is a key parameter to drive revenue and forecast revenue growth and customer lifetime value (LTV).
Unfortunately, after an already disruptive 2021, measuring app retention has become a daunting task for app marketers. Adding to the conundrum is Apple’s SKAdNetwork, which does not de facto allow marketers to measure retention for non-organic (or organic) users. While retention may be more difficult to measure on iOS devices, benchmark data continues to be a valuable resource based on data from consenting iOS users, Android usage and overall retention rates.
Addressing the elephant in the room
AppsFlyer’s app retention benchmarks data found that in APAC, Android retention rates decreased year-on-year in 2022 from 2021, with day one seeing a 3% decrease, day 14 down 9% and day 30 down 9%. Moving in the opposite direction was iOS but only slightly to reach 3% on day 30 (the APAC region data includes Malaysia, Pakistan, Taiwan, Australia, China, Singapore, Thailand, Bangladesh, India, Japan, the Philippines, Vietnam and Indonesia).
This implies that in an overly saturated app market, users are willing to experiment with new apps but the decline in retention rates makes it evident that user loyalty is hard won, especially on Android devices. The reality is that relying on user-level data to create app marketing strategies is quickly becoming a thing of the past in iOS. Instead, app marketers will need to innovate, be more savvy and take advantage of new measurement methodologies to optimise user acquisition campaigns to pinpoint channels that drive user loyalty.
Let’s bring all this together
Now that we’ve understood why retention is important and some of the common pitfalls, how do we actually influence it and improve it?
It’s a tricky topic but a major area of focus for app marketers. Everything can improve or influence retention, including external factors such as competition, marketing and user acquisition campaigns and innovations that are going on in the product.
Existing user engagement means how well you are able to keep users engaged over the long term, perhaps through releasing new content or gamifying your app, or providing other mechanisms to help them keep finding value after time.
Reactivation involves ushering lapsed users or those who have churned back into the app with special offers or new information, which rekindles their desire to use the app and to come back again. Owned media activities like push notifications, email and SMS also comprise crucial elements of a comprehensive app marketing strategy. Retention is all the more likely to increase based on how creatively marketers can elevate these engagement drivers, albeit slowly, since it’s a lagging indicator.
The final dimension is the new user activation which tends to witness the fastest results and it’s usually where there’s the most upside, making it a go to avenue for app marketers. Therefore, the ideal retention strategy must work cross-functionally to align the marketing message to enhance first-time user experience, which in turn will improve your activation rate.
Take into consideration what we refer to as adaptive onboarding, which is to provide a slightly customised or personalised onboarding experience based on the acquisition channel, or the acquisition campaign, that funnels the user.
Attribution to the rescue
By leveraging insights from attribution data, marketers can identify which campaign a user came in with and the creative they clicked on. This is to provide a tailored onboarding experience that resonates with their user behaviour and journey, which is the ultimate in achieving that alignment.
As we step into the next era of mobile disruption, we need to understand that improving retention is tough. Although it also takes a lot of work, it’s totally worth it to deliver the best user journey for your app users, which eventually will help you sustain your business growth. The key ingredient of the retention recipe is to work cross-functionally to achieve the best outcomes.