One of the major problems that app marketers face is retaining users. Only 10%-12% of users remain active after 7 days and only 4%-5% of users after 30 days.
User retention strategies range from customized and personalized onboarding to push notifications. It’s important to analyze the needs of your users and implement strategies accordingly.
There are several reasons why you want to implement user retention strategies from the start – retention is important! Retention leads to viral user acquisition, improves user monetization and gives you an edge over your competition – just to name a few.
Not to mention that the major pillar for growth of mobile apps is retaining users. Once you nail down user acquistion, your CPI, LTV and In-app purchases improve.
App Growth Network leverages these 4 key user retention processes to scale mobile apps.
1. Identify correct retention metrics
As each product is different, the user behaviour is unique for each objective and category. For instance, the objective for a gaming app would be the user opening the app on a daily basis, while for a fashion wear and e-commerce site it would be the user visiting frequently and making purchases.
Overall, since the user behaviour is unique to each different category and objective, so is the importance to look at retention metrics differently.
There can be the following different types of retention:
- N-day retention – Users are active on a particular day after installing the app. It is the same as classic retention.
- Un-bounded retention – Users are active on a particular day or after that day. Sometimes also referred as rolling retention.
- Bracket retention – users are active within a particular time period.
2. Build and analyze your retention curve
The next step will be to build your retention curve. Retention curves typically look like the figure below:
Retention curve serves as reference to track your increases or decreases in retention. Here is the target that should be achieved.
- Curve flattening: After some time, the curve should start to flatten. If it does not flatten it implies the acquired users are not returning to the app. In the figure above, App1 doesn’t flatten while App 2 starts to flatten just after a few days. So, for App1, product preposition should be rethought before continuing User Acquisition.
- Shifting the curve up: The next step involves shifting the curve up i.e. only a small number of users not returning in the days after downloading the app. There are various ways to accomplish this:
- Evaluate the user acquisition sources and focus more on sources that have higher retention rates.
- Improve the on-boarding process.
- Assist new users to follow the path that your retained users have taken so that you are able to retain more new users.
The following sections explain this process in more detail.
3. Target at each stage of user life cycle
Once you know your retention curve, you can divide your users based on customer journey so that you can target them at each stage of their user life cycle. This helps to identify what users are doing to reach the next stage and replicate the same for new user.
Users can be divided into:
- New Users: Recently acquired and active on the app
- Current users: Active on the app and have been returning for some time
- Resurrected users: Quit using the app then became active users again
- Churned Users: Previously active on the app, but are no longer active
Before we get into dividing the users on this basis, you should identify which is the most valuable, and the time it takes for 80% of different users to repeat their cycle. This time period is referred to as product usage interval.
Now that you know your product usage interval, here is how you can divide the users.
After dividing users, target users at each level. Look for behavioural patterns and build user personas. For example, the following are persona’s for active users for YouTube.
- Heavy content creator
- Low Content creator
- Content Consumers
Investigate each persona to understand what triggers them to move onto the next stage of user life.
New user analysis is critical to move the retention curve up and even 2-3% improvement in new retention results in incremental growth.
New users go through these stages:
- Value discovery
- Habit formation
4. Look for patterns & segment users
- Look for patterns by building:
- User behaviour cohorts to analyze retention based on actions in app. For instance, new user behaviour cohorts can be based on Location
- Source of acquisition
- Device type
For a current user it can be based on the frequency of performing a critical event.
- For e-commerce – order value
- For food delivery – how many times a user places an order in a month
Similarly, product behaviour cohorts can be created to help users achieve behaviour that increase retention.
- Critical path funnel for identifying drop off points. Make a critical path funnel by identifying the sequence of steps the user takes to complete your critical event.
For an e-commerce company a critical funnel should involve the following event:
Check in funnel points where users are dropping and then analyze reasons for drop & improve that step in order to increase your conversions.
- User flows to know what path users are following the most. Apart from that, user flows help to answer the following
- Comparing path of retained and churned users
- What path a user takes to complete an important event like sign up or to make a purchase
- What churned users are doing in the funnel
- Experiment, Measure & improve
Retention is a continuous process of experimenting and measuring KPI’s against previous performance.
TRUST THE NETWORK
Article written by Gopika Gupta
Gopika is a Growth Marketing and Analytics specialist at App Growth Network.