Some studies say that it is up to twenty-five times more expensive to get a new customer than to retain an existing one. Once your marketing efforts have paid off and you have an existing customer base, you should focus on offering them the best experience possible.
On average, an app loses 77% of its DAUs (Daily Active Users) within the first 3 days after the install. Within 30 days, the number of lost DAUs shoots up to 90%.
This is a normal phenomenon and does not mean that your retention strategy is not working. In many cases, only a small percentage of people who initially downloaded the application will remain the regular users. Still, they will bring the revenue through your app and should be at the centre of your actions.
In this article, we will cover some of the most effective ways to maximize user engagement and minimize churn.
Fundamentals of user retention and mobile app engagement
Observing the market, we see that mobile apps have difficulties in creating a solid and consistent user base. In fact, 25% of users open a mobile app only once after downloading it. The app market is oversaturated, often with poorly created products.
To find out what exactly that means, we should look at the most common reasons why users churn:
- Lack of delivery on the fundamental value
- Ineffective first experience
- Lack of stickiness – the ability to remind and re-engage users
- Insufficient update frequency
- Overwhelming navigation
- Slow performance and technical issues
Tackling these points ad-litteram is not going to solve mobile app engagement. “I’ll push more updates for my application” or “I’ll use push notifications to remind users about my app” are not a good plan for stimulating engagement. To devise a solution, we must take a step back and look at why people use mobile apps in the first place. There are a few reasons for that – let’s have a look at them below:
- Apps make their life easier. 63% of respondents use mobile apps to solve an issue or overcome an inconvenience. This ties in together with the first reason why customers churn, namely the lack of delivery of a fundamental value. In the planning phase of the app development, you must focus on how the core value of your app should be delivered.
- They get clear instructions for using the app. This is a two-fold aspect; firstly, the onboarding experience needs to be smooth and intuitive. Secondly, the navigation and user experience must be as smooth as possible to ensure great app usage.
- The given app has an appealing design and aesthetic. People enjoy sleek and clear pages, intuitive navigation, interactive elements such as page transitions and feedback sounds.
- They get consistent experience on multiple device. Keeping a consistent theme across multiple devices, such as mobile phones or tablets, is a subset of the UX design.
- The app’s content gets regular updates. Apps that are not updated with new content become stagnant and uninteresting to regular users.
Having understood the main reasons behind mobile app usage, we can now take a step forward and think about the user engagement. Engagement has many meanings, but the definition that we are interested in goes along the lines of:
"the process of encouraging people to be interested in the work of an organization, etc."
As a service provider, you encourage users to use your mobile app because of the number of benefits that they will receive from it. User engagement, therefore, is the user’s response to your efforts of delivering something of value.
Mobile app engagement does not entail having your users stuck to the screen. A long-term customer who uses the app only when they need it (see Uber) is much more valuable than an addictive short-term relationship (remember Vine?). Nurture your customers and show them that your app will always be a reliable solution to their problems – now and in the future.
11 tricks to engage and retain the users
Know your user: why is this person using my app?
Even though building a target audience is the foundation for creating a mobile app, developers might lose sight of this aspect as they are working on features and functionalities. Having a target demographic is one of the fundamental pieces of information in any business plan. All your efforts must align to serve your specific customers.
Offer real value: are the users getting what they want out of my app?
As you are nailing your messaging and marketing, you must make sure that your product is living up to the expectations. The valuable, long-term users will remain engaged only when they can solve their problem or reach their goal.
Can I navigate to my destination with Waze? Am I able to talk to any of my friends with Messenger? Can I take my mind off work with Candy Crush? Can I do my mathematics homework with Photomath?
Ensure good performance: is the app irritating to use due to technical issues?
There is a direct correlation between an app’s performance and user retention. The more sluggish your app is, the less likely your customers will continue using your app. Even though this seems quite straightforward to fix, make sure you improve all aspects of performance such as: low latency, prevent crashes, consistent connectivity, adequate gesture responsiveness.
Build great UX: what mental workload does the app require from the user?
As this Appiness World article suggests, the cost of mental resources is classified as follows: cognitive load, visual load, and motor load. The number of clicks (motor load) is important – you don’t want any redundant actions in your app but the most important. Labeling buttons correctly, placing them in the right location, and having a logical flow will reduce the cognitive workload of the user. This is what makes apps easy to navigate. So, assess how much effort your user needs to put in when they use your app.
Personalize: does your app deliver a tailored user experience?
Personalization is one of the distinguishing figures of mobile apps. To personalize your mobile app specifically to your user base, you must firstly understand who they are and what they prefer. So, firstly collect the user profiles.
Try collecting the following data:
- Age and gender
- Leisure or business use
- Conversion history or past behaviour
- Time of day when application is used
After you have a good understanding of the individual members in your user base, you can go one step further and create groups of users with similar preferences (segments). This will enable you to collect data more easily and drive improvements in your mobile app to increase retention.
AI is a fantastic opportunity for delivering a personalized user experience en-masse. AI has the power of collecting and processing customer data such as purchases and location to produce feeds and offers based on the customer’s preferences.
Use push notifications in a smart way: are you reaching out to customers to use the app?
You can increase the user retention by 20% simply by implementing push notifications. You can further increase the user retention by adding notifications which are: (1) behavior-based, and (2) time-optimized. With the latter, you can increase the push notification engagement sevenfold just by sending notifications at the correct time during the day.
A staggering 68% of users are dormant. This means that they have installed the application and do not use it. A push notification can prompt those who forgot about the application to have a look at it again.
Offer rewards: would the customers use this app over another identical one?
Suppose you have a competitor who has a similar product. You will be competing for the same customers, and the users will have to choose one of you. How can you sway the customers your way?
Let’s take credit cards as an example – 79 percent of card holders named rewards as the most attractive feature of their preferred card. Why else would someone use a credit card to buy when they would (hopefully) have their own money to spend?
Similarly, offering rewards to loyal customers will make them feel they are getting a good deal.
Rewards can come in many shapes and forms, such as:
- Discounts off of purchases
- Exclusive deals to loyal members
- Incentives to those who haven’t checked out their order
- In-app credit
The benefit of having engaged users massively outweighs the cost for offering rewards. When users see that they are getting more out of your app compared to your competitor’s, their choice will be easy.
Deliver fresh content: has your app’s content been stagnant?
The term ‘content’ represents all the information that is available to a user through the app. This includes text, visual and audio media. Content should always be up to date. The moment when users are accustomed to the content in your app, the less attention they will pay when using it, and the less engaged they will be.
Taking Spotify – a music streaming platform – as an example, we can see that they are always looking to bring new music and playlists to their users. For instance, Spotify Wrapped is a playlist consisting of a user’s most played songs throughout the last year. It is a simple feature that got users excited enough for the campaign to go viral.
Leverage Social Media: is this app easily shareable via social media?
Many companies have not been able to fully capitalize on their social media presence. This is due to the focus on social media marketing and missing on the other opportunities the platforms offer.
For example, offering users the opportunity to log in using their Facebook account is going to make it so much more convenient for new users to join. With this integration comes the ability to share news, media and other information straight from the app. This added layer of convenience makes the user experience considerably better. In addition, technical support offered through social media chats offers a convenient point of contact for users, who get notified on their platform of choice.
Listen to your users and improve: have you solved the users’ complaints about the app?
An essential aspect of mobile user retention is gathering and acting on user feedback. What is interesting about this practice is this: gathering valuable feedback is more difficult than acting on it appropriately.
Negative feedback is the more valuable kind of feedback. The benefits of gathering negative feedback are twofold. Firstly, it is a sure-fire way of resolving a problem that a genuine user has faced. This can save many other users from facing the same issue.
On the other hand, negative feedback may discourage other users from downloading your application. A quick response from your company can help to mitigate this: 69% of people who Tweeted negatively say they feel more favorable when a business replies to their concern.
Track your efforts with crucial KPIs and metrics: do we know what works and what doesn’t work?
We are blessed to have a number of analytics tools at our disposal. Here are a few of the most important metrics for user retention and engagement:
- Customer Churn: the percentage of customers who have stopped using your application
- Revenue Churn: the percentage of revenue lost from the churned customers
- Net Promoter Score: a measurement of the user satisfaction and loyalty
- Loyal Customer Rate: the percentage of users who have used your app consistently over a long period of time
- Customer Lifetime Value: the amount of revenue generated by a single customer
The most important aspect of those metrics is taking action and improving your app. Just like with user feedback, product owners must first use those metrics to identify issues. Afterwards, they must develop a plan for improvement and ask the development team to implement the changes.
User engagement is the differentiating factor between successful and failing apps. Engagement is tightly related to delivering value through the app, as only apps that can solve a problem and make life easier will their users return. This means that apps, just like any other business, must take into consideration all business aspects: market, customers, and the product.
Engagement must be carefully planned right from the initial stages of the app development. Once the application is launched and customers have been able to use it, product owners will be able to track the app’s performance and refer to user feedback to identify opportunities for improvement. User engagement is an ongoing process, so if you want your app to be successful, you need to listen, adapt and deliver.