App Marketing, Mobile App Development

In mobile marketing, it’s a well known fact that retaining customers costs less than acquiring new ones, and retention can also be used as a trust signal around how well your brand knows its customer base.

However, retention doesn’t look very good for the average mobile app. What many don’t realize is that customer churn can be largely managed with a few simple improvements to their app’s customer experience, and boosting retention doesn’t mean you have to completely reinvent the wheel.

In this post, we take a look at how the average retention rate for all apps evolves over time, as well as how each app category fares in the retention race. We wrap up by covering four retention-boosting strategies that will help improve the health of your app.

The state of mobile customer retention

First, it’s helpful to know industry benchmarks to better understand how your app is doing compared to the larger app landscape.

Your app may see thousands of new installs every day, but how many of these installs become active, engaged, and profitable customers? On average, only 25-40% of new customers will re-launch an app after the first week. This number diminishes as time goes on, ultimately falling to 4% one year out. Of these retained customers, only a small proportion will continue on to be active and engaged users of your app. In other words, downloads and installs say little about the true health of your app.

The retention problem

It’s also important to note that average retention rates vary across app categories. Through Apptentive’s research, we’ve come up with benchmarks for many app categories, which will help you understand how your app stacks up against the competition.

Here are the app categories that rank among the top and bottom in terms of retention rates:

App categories for retention

*A note on methodology: The data above was discovered after we analyzed a representative sample of apps on our platform. We chose 28-day return retention, as it proved to generalize over app category better than the other retention metrics.

4 steps to boost mobile customer retention

Retention is a strong indicator of how well customers are receiving your customer experience. Here are four strategies to boost retention in your mobile app.

1. Launch a “voice of the customer” initiative

Most brands today may think they build products around their customers, but in reality, our data shows they only hear from less than 1% of their customer base, which we call the “vocal minority.” That means about 99% of their customers are in the “silent majority,” and their feedback and loyalty aren’t being fostered or prioritized.

The Silent Majority

Before you can hope to boost retention, you need to understand why your customers leave in the first place. This takes both empowering your customers with an easy way to leave feedback in your app, and actively listening to their feedback and other social signals. App store ratings and reviews provide a good starting point for a VOC initiative, yet don’t provide anywhere near the holistic picture you need to understand your customers as a whole.

To launch a “voice of the customer” initiative, app owners are introducing in-app messaging for one-to-one communications with their mobile customers; using intelligent prompts to send contextually relevant messages; and collecting customer insights at scale using in-app surveys and feedback forms. (Shameless plug: Apptentive can help empower you to get started.)

2. Use contextually relevant messaging and proactive engagement strategies

Many marketers believe the key to customer engagement is messaging, which all too often manifests itself in the form of an endless barrage of push notifications.

However, the reality is push notifications may be harming your app’s retention rates. You might be unwittingly leading customers to opt out or to even uninstall your app simply to get a break from the annoying notifications. When it comes to retention, how you message your customers matters just as much as what you message them.

As a best practice, we’ve found the best way to engage customers is at key ‘mobile moments’ throughout the customer journey. These moments are tied to events such as the completion of an in-app task, such as after a customer has made a purchase or watched a video. In practice, this means communicating with customers via prompts and surveys at strategic times so as not to bother them.

In contrast, attempting to engage customers before or during a specific task can be seen as intrusive and leads to higher exit rates and lower response rates. Your customer opened the app with a goal or task in mind—let them accomplish this goal before sending them a message linking to another part of the app or distracting them from the task at hand.

When customers are engaged in an intelligent manner, the results speak for themselves. The chart below shows average retention rates for mobile apps over time and the boost in retention that you can expect to see as a result of interacting with your customers in an intelligent, timely, and contextually relevant way.

Proactive engagement stat

3. Let customers know you care

The best way to retain your customers is to simply let them know they’re valued. After collecting and analyzing your new customer insights, give thanks and acknowledge your customers’ feedback.

If you see feature requests or bug reports for a certain feature, consider working it into your product roadmap. And upon releasing a new update, remind your customers you’re listening and let them know the update was made possible only by their continued feedback.

This kind of proactive communication with customers translates into loyalty. In a survey we partnered on with SurveyMonkey, people said if they know their feedback has been implemented, 97% of them are at least somewhat likely to become loyal patrons to the company.

Why do customers leave a company?

In reminding customers you’re listening to their feedback and care about their thoughts, you’ll adopt and convey a customer-centric mentality that will let your customers know their opinions aren’t only listened to, but highly valued.

4. Give customers a reason to come back

Stale content deters customers from coming back to your app. If you want customers to come back to your app day after day, provide them something new and original each time they open the app. These rich content updates can be in the form of a flash sale, a daily comic, a stream of user-generated photos, a loyalty or achievement program, or something as simple as resetting activity limits.

Whatever shape your reason to come back takes, as customers come to expect fresh content, they’ll get into a routine of regularly launching your app to see what’s new and exciting. To understand what content will provide the most value, and the best reason to return, step in to your customers’ shoes using your newfound insights. What would make you, as a customer, want to revisit the app time and time again?

To help get you started, ask yourselves the following questions:

  1. How long has it been since new content has been published in my app?
  2. Am I currently running any business promotions? How can I incorporate them into my app?
  3. Do I have a loyalty program? Am I offering enrolled customers unique in-app content?
  4. Is any in-app content out-of-date? What can I do in the short-term to update it?
  5. Am I rewarding people who open my app frequently for their time? If not, how can I do so?

In conclusion

By taking a customer-centric approach and improving your customer experience, you can boost mobile customer retention, improve monetization, and cut costs on expensive acquisition campaigns. Retaining existing customers is the best way to boost loyalty and build a supportive audience over time, and should be high on every app owners’ priority list.

At Apptentive, we focus on helping companies build brands customers love, which is why we’ve built tools that empower companies to communicate proactively with customers, measure sentiment, and take action based on customer feedback. Hopefully the above tips will help set you and your app on the road to retention success.

Thanks for reading, and happy retention boosting!

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