Significance of User Retention and Strategies to Improve it

Increase user Retention Strategies for your Business Model

User Retention is a very significant factor that can be sometimes a little tricky to follow up.

What Do You Need to do With User Retention?

If you own a business related to no particular industry you still need to measure and then improve your User Retention rate.

This statement is valid for both mobile as well as web-based products for example websites, mobile or web applications, etc.

That's why in today's article we will be focusing on the concept of User Retention and what are the different retention strategies that you should be using to improve your product's User Retention.

The two of the most crucial metrics that provide the actual insight of the application are:

1. App Retention
2. App Engagement

So, if you are facing low app retention and even lower engagement rate then there is something wrong with how your app is functioning in the market. And in the case of high retention and user engagement rate, your app is on the right track.

What do You Mean by App Stickiness?

You can easily determine your application's stickiness by finding out the average from the 'User Engagement' and User 'App Retention' rates. For maintaining the sustainable user engagement and app retention we need to find out the ways to decrease the app uninstall rates. Basically, the app's stickiness can be stated as to how loyal and engaged are the end-users to a particular application whether mobile or web.

The term app retention can be defined as a benchmark for measuring the total amount of the app's users that returned to the app after their first session with the app. Usually, a time period of three to six months is considered for calculating the percentage of returning users.

Whereas, the engagement is the term that is used to describe how active are the end-users on your mobile/web application. For example, a highly active or engaged user may interact with the app during more than 10 sessions in a span of 30 days.

It is safe to say that without the high user app retention and active user engagement, the app user lifecycle is no way near being successful. That's the main reason why nowadays brands are going forward with over-the-top promotion techniques to gain high app engagement from their targeted audience.

The above graph is based on the year 2017 and covering the data statistics on User App Retention for a 12-month period. Here, we can see the three-month user retention rate between various industries including:

• Travel & Lifestyle Industry
• Ecommerce & Retail Industry
• Business & Technology Industry
• Media & Entertainment Industry

Why are Existing Users Important?

Although user acquisition is also an important factor that needs to be taken into consideration and worked upon. But instead of bringing new users for your app every month, wouldn't it be a better scenario if you can make your previous users stay active on the app regularly.

So, let's look into the top reasons why you should care more about your existing app users and favor User Retention over User Acquisition:

1. Low Marketing Cost

The first reason is the lower cost of marketing involved because you would have to spend less time and energy in locating the target audience as you already have a user base. Your app's existing users are also a great resource for providing you with valuable feedback. You can even go ahead and make them a quick survey with questions like:

• How was your experience while using the app?
• Were the in-app purchases worth the money?
• Did the app provide some value in your routine?

This feedback from the existing users can help you in improving your app's functioning and outlook in the market.

2. Better Conversion Rates

The next reason for sticking with existing users is to achieve better conversion rates for your application. Because your app's existing customers have already acquired the product or service that you are offering with your app.

So, there won't arise a need to use extra promotional activities to attract the existing users, unlike the new ones.

Basically, at this point, an understanding of trust is established between the existing app user and the web/mobile application so it is comparatively easier to identify their requirements from the app.

3. Increase in Profits

Another reason, probably the most important one is that your existing app users are much more profitable and can help you in increasing your app's revenue. From the point of view of selling a service to a customer, you won't be required a ton of discount to convince the existing user to use your app.

Also, the chances of an existing user trying out some of your other products and services are much more in comparison to a new user thus, helping you in making more profit with your app.

Give your app users a reason(s) to come back to use your app!

Strategies to Increase User App Retention Metrics

Every business revolves around customers because without customers there would be no demand in the market which will lead to no supply from the various different industry verticals.

Below are some of the best ways that a CRM i.e. Customer Relationship Management software can come in handy in increasing your app's retention rate. By providing a solid and stable customer database as a foundation for long-term partnerships between you and your users.

1. Targeting Users With Special Deals

The more you are aware of the user's behavior the better are the chances of you getting mobile app acquisition.

The CRM software allows you to have a look at the user's previous behavior by providing their product/service usage history. With this information, you can easily figure out what kind of offer will be the most appealing one for that particular individual.

Using the customer relationship management software, you can also create a list featuring all your open-sale activities i.e. the ones who have shown interest in your product but haven't made a final purchase regarding it. With this list, you can increase the relevancy factor as well.

2. Sending Tailored Follow-Ups

If you want to increase the app retention rate, then your prior focus should be on creating a steady bond between your app and it's users. This is the part where the CRM software helps you in treating the app users something more than just a chart number.

This bond can be easily established by offering personalized follow-ups for your app's user base. Keep in mind to use customized notes and some other bits of information to make this experience a little more personal from the user's perspective.

Using this trick in your follow-up techniques might turn out to be very great as the effects of personalization can never be understated.

3. Focusing on VIP Customers

In simple words, you can increase your app retention by preventing a user from leaving. Try to find the reasons why the user has decided to leave like:

• Are they bored with your app's services?
• Is your competition the reason behind their departure?
• Are you not providing value to the user?

It's hard for a customer to leave when he/she is treated nicely by a business service that's where you need to pay attention to. Treat your app users with special actions like offering them some benefits, for example, a 3 month VIP subscription to a newsletter or something like that.

Look at the statistics report for the last six months and study the user's app behavior you will be able to see the signs using the CRM software. Whether the user has lost its interest from the application and requires some extra focus in order to keep actively engaging with the app.

4. To Reward the Regular Users

Even looking back, one of the strategies that always seem to work is the 'Reward Strategy' so why not use this strategy for your benefit. The first thing that you need to do here is found the list of your most faithful customers or the users who help you in gaining profits.

Once, you have your database ready with the information of your most loyal end-users then offer them a good reward for their loyalty towards your application. This reward system will ensure that they keep loyal towards your app by being regularly active on it.

Such tiny incentives can transform into some of the most profitable assets for your web or mobile application.

5. Following a Proper Schedule

This is one of those strategies that a majority of people do not pay attention, to have a proper schedule for your app users. You need to keep providing reminders to the users in the form of emails and notifications so that they can be aware of your app's activities.

And if your app comes up with a new feature or updates then ask your users to try it out through the means of these scheduled emails and notifications.

And after a couple of days from the release of the new feature of your app, you can take a follow-up from the users and asking them about questions like:

• If the new update was up to the mark?
• Is there any improvement needed in the app's latest feature?

Gathering and managing the information of your app's users is a significant step that needs to be taken and doing this with the help of a CRM makes it a simple and easy process.

Phases of User Retention

To understand the User Retention more clearly, it’s time we divide the entire process into three different phases, which are:

1. Initial Retention
2. Mid Term Retention
3. Long Term Retention

All the phases of the user app retention procedure are different from each other but are also equally important.

1. Initial Retention

The first stage is of the Initial User Retention, which is the most critical phase as well. This is because how you interact with the users in the initial phase may make an impact on the user or break the first impression of your web or mobile application.

The initial phase of user retention will also have a serious impact on the other two phases of the user app retention that are Mid Term Retention and Long Term Retention.

And if you somehow fail in this initial phase there is very little what you can do in the next two stages to make everything right again.

Initial retention is simply the first impression of your mobile/web application and your brand image. Here, the base foundation of creating a lasting impression is your app's core features and usefulness of those features in the user's daily routine.

That's why you need to make an aim to create an immersive as well as an immediate encounter of the user with your app's unique value.

2. Mid Term Retention

The next stage of user retention is the mid-term retention phase where the main objective is forming new habits and create repetition in the routine.

Repetition is a must in case of having a higher user app retention rate because even a good first impression can fade off pretty quickly. And new habits can only be created by the repetition of a single activity again and again.

If you manage to assist the users in maintaining habits around your application then those users won't be requiring daily reminders in the form of notifications and emails to use the app daily.

3. Long Term Retention

In order to have an awesome user app retention, you also need to make a mindset focusing on quality rather than the number of end-users for your app.  

The initial two phases mainly focused on how to get the users onboard and then create a repetitive routine. But in the case of long-term retention, we focus on improving the existing product or service.

So, now collect feedback from the existing users of your app and find out the features that need to be updated in your app. In order to rank among the most successful applications, there have to be consistent updates and constant improvement in your app.

So, these were the three phases of the user retention, we hope we were able to provide you some great information on user app retention and its concept.

We would love to hear from you, do let us know what you think in the 'Comment' section down below about these Strategies for increasing User Retention.