Why App Retention is #1 for Growth

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“Retention is a deal-breaker.”

Is this a bold statement? More importantly…is this true?

The above is a direct quote from our CEO, Fouad Saeidi, during an interview for Retention Masterclass, “Hooked: how to build mobile habits for better user retentionconducted by John Koetsier and Peggy Anne Salz.

Here we’ll share more highlights from this app mobile tips-packed interview and why the app retention statement above could, in fact, be very true!

    What you’ll learn in this article

  1. Retention (habit formation) is the only way to grow an app
  2. All successful apps are “sticky”
  3. 40% increase in app retention is possible
  4. How Duolingo gets users hooked
  5. Knowing when you’re “hitting” (or missing) your goals

Retention (habit formation) is the only way to grow an app

App growth is no longer about getting as many downloads as possible. There are a few reasons for this. One, it’s very costly. User Acquisition costs are getting higher all the time. UA is also an investment in time and energy. It’s a waste of valuable resources to get users and increase downloads if they’re just going to churn before even completing a full event in the app.

More developers are realizing that the focus needs to shift to engaging users and increasing the stickiness factor in order to be successful. To do this, an app needs to build habit formation with the user. Below is an example of the Hook model for an app that includes 4 key components: a Trigger (internal and external), an Action, a Reward, and an Investment.

All successful apps are “sticky”

The stickiness of a product is how memorable it is, how much it resonates, how often a person goes back to it – how much it “sticks.”

At AGN, we’ve seen people that rank really well in the app store but without sticky products, they can’t monetize it. Why is this?

Apps need to nail down retention Day 1 in order to build habit formation and stickiness; then once people are hooked, psychologically, they get to purchase events and eventually commit to a purchase. If they’re not hooked and reaching that purchase stage, keeping an app in business is an uphill battle.

Think about some of the most successful and lucrative apps out there – like Candy Crush, Reflectly, Duo Lingo – these are products that people love and tell others about. They are apps that people use on a regular basis and keep coming back. 

But each category is unique and requires its own approach to optimal retention. Average Retention Day 1 and 30 look very different for a dating app than they do for a shopping app.

40% increase in app retention is possible

When looking at how to improve retention, you need to look at the full taxonomy. Looking at the quantitative data is a big part of it but so does the qualitative – conducting a UX audit, analyzing the onboarding flow, examining the psychological pricing and so on. Basically it’s connecting the dots and mapping out how to fix it next with the product team.

 

 

For one of AGN’s gaming app clients, Gobsmax. They saw amazing Retention Day 7 and 30 but most users weren’t getting to that level. Their problem was their Day 1 retention. 

To fix this problem, AGN gave these suggestions:

  1. Cut down the number of taps to reach the first action of the game
  2. Teach the user new game mechanics at the right time (not all upfront)
  3. Uninterrupted gameplay, especially at the beginning
  4. Introduce achievements
  5. Provide feedback loop
  6. Vary daily rewards
  7. Gamifying the game even more through mini-games (game within a game)

The end result was a 40% increase in retention day1!

To get these results, it takes open-mindedness. People must be willing to acknowledge that a major overhaul may be necessary, are willing to make changes to the product or to trust and work with data and analytics. It’s doable!

How Duolingo gets users hooked

For those who don’t know, Fouad made a commitment to learning Spanish. And he is hooked on Duolingo.  How did the Duolingo app accomplish this – what are they doing right when it comes to app user retention?

Duolingo sends him 4 push notifications per day. For many, that may sound annoying. But for Fouad, who is considered a “power user,” this is exactly the motivation he needs to keep him going.  A notification that reads ‘“You’re missing your daily streak” gives him that competitive push to open the app and complete another step. Obviously this approach works because he’s completed a full 100-day streak – that’s 100 days without missing a single day!

To be effective and not spammy, push notifications are sent based on segmenting users. There are some people that are active users and have already paid a subscription and you want to keep them on the product. But there are other segments like early adopters, casual users, or dormant users that aren’t using the app anymore. Push notifications need to be sent in a systematic way based on certain flows.

Duolingo also masters gamification and a social factor as retention strategies. Users get rewarded for their app use. They name their achievements to motivate users to keep logging in and reach the next level. 

 

Users also get placed into “leagues” with other randomized users. If a user doesn’t keep up, they are at risk of getting demoted out of the league. With all of these elements in place, it’s pretty clear to see how a user could get hooked!

 

Knowing when you’re “hitting” (or missing) your goals

For marketers, it’s about the financial or commercial goals of the app – like in-app purchases or in-app advertising revenue. But none of that comes until retention Day 1 goals are hit, retention Day 7 is hit, retention Day 30 and so on.

These are all things that need to be measured with analytical tools like Firebase. The only way to know if you’re succeeding is to measure if you’ve hit your retention Day 1, 7, 30 goals and eventually achieve the transaction. Measuring everything, all those funnels, and events. It starts with taxonomy and connecting the dots there. There’s no other way to do it.

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