What Is Retention Rate?
Retention rates can also look at a cohort of people who downloaded the app at roughly the same time to determine their in-app behavior.
- Retention rate helps determine how successful UA managers are at finding the right user for their app
- Retention to your app varies based on the expected lifestyle of your users
- A low app retention rate may tell you how to improve the user’s in-app experience
How Is App Retention Rate Calculated?
App marketers can calculate retention rate by looking at the number of users who open an app on a given day and dividing it by the number of users who installed the app on the same day.
For example, a match-3 app acquires 100 users on Day 0. On Day 7, only 40 users open the app to continue playing. This means that this cohort sees a 40 percent Day 7 retention rate.
In general, the app retention rate formula considers the number of users who use the app on Day 1 compared to the number of those users who are still engaged at some point in the future – such as Day 7 or Day 30.
Why Does Retention Rate Matter?
Many mobile marketers used to prioritize user acquisition. Now, after realizing that a pretty high proportion of these users are fickle, attention has shifted toward user retention. And rightfully so. Here’s why:
1. User Engagement
If the retention rate on your app is good, it indicates your app is interesting enough to keep users coming back for more. You can continue improving the in-app experience to keep users happy. Highly engaged users mean that there are more opportunities for monetization.
2. User experience
A low retention rate may signal a need to make modifications after identifying, if possible, what is causing it. Developers use these metrics to get more insight into how they can improve not just the user’s experience in the app – but also profitability and app growth overall.
3. Churn rate
By looking at the churn rate and retention rate, it’s possible to pinpoint when people stop using the app. This could be right after initial onboarding or at some other given point. Understanding this critical part of a user’s experience in your app allows you to make key changes in retaining your users for longer.
When Should I Check My App Retention Rate?
There are several milestones mobile marketers focus on when it comes to measuring their app’s retention rate – both over the short and long term.
Find out if your onboarding is effective and leaving a good impression on your users.
Look at users dropping off this early in the game to see what you could improve your app and your user’s experience in it. Making improvements here will influence how long users will see the value in your app.
Expect your user base to have decreased considerably by Day 30. You’ve now identified your valuable and most engaged users. These users will play a key role in boosting your revenue and app monetization strategy.
What Is an Ideal Retention Rate?
There is no prescribed retention rate to aim for out there. Ideal or target app retention rates generally depend on the app vertical. News app publishers, for example, reckon with a higher longer-term retention rate. This is perfectly logical, as their users are expected to use the app most days, if not every day.
Data collected on the worldwide retention rate of mobile apps has shown that an average retention rate across all app verticals is around 25 percent after Day 1. Following the installation, retention rates fluctuate greatly – with retention rates for verticals such as hypercasual games dropping to just under three percent on average.
Take a look at the average retention rates for your app vertical – both short-term and long-term – and use them as the figures you’d like to exceed with your app.
How Can I Increase My App Retention Rate?
What do the apps with the highest retention rate do differently? There’s no secret formula, but there are some things that may help to increase your retention rate overall.
- Re-engage with your users after they leave the app – you can do this via customized push or toast notifications
- Identify bottlenecks to offer a premium user experience – such as functionality and better onboarding
- Carry out A/B testing and a cohort analysis – and utilize user segmentation tools to learn about user behavior and preferences
Publishers should look beyond user acquisition and make sure they pull out all the stops to create an app experience that users will want to come back to over the short and long term.
A high app retention rate indicates high user engagement and LTV and usually a low churn rate, which overall looks promising in terms of your opportunities for monetization.
Retention rate is the percentage of people who continue to use your app after a specific period of time, often tracked over time.
You calculate your app retention rate by determining the number of people who sign up or download the app on Day 1 compared with the number of people still there on Day 30 – or any other metrics that fit your needs.
A good retention rate depends on your app vertical. However, most apps have a retention rate of under 20 percent by Day 30.