Retention Marketing

We have seen a significant shift in the way app marketers look at growth.

One of the most notable changes in the manner in which app retention metrics have taken precedence over app acquisition numbers.

Mobile app acquisition used to be app marketers’ key metric. Today, however, the most important metric is the number of times a user interacts with their app within the first 30 days of installation (Defined by the businesses).

It is becoming more and more important to build a workable retention strategy to have sustained app growth which ensures that your users are hooked onto your app and keep coming back for more.

It cost more when you try to acquire used to drive any of the KPI for the app but if the user is already there engaging/activating them to move the metrics can be a better option as you can activate them at a low cost. Your existing customer base is a veritable gold mine of not just sales opportunities, but free goodwill and promotion as well — not to mention that having lots of happy customers makes your job much easier, as you have more consumers to choose from to support your marketing goals.

Customer retention refers to the activities and actions you take to reduce the number of customer defections. The goal of customer retention is to help companies retain as many customers as possible which help them to generate revenues by showing advertisement or by increasing sales.

The formula to calculate CRR is

Customer retention rate (CRR) = # of customers at end of period in the cohort / total # of customers in the cohort

So There will be a difference between User retention rate and Customer Retention rate. Basically, the Customer is the one who has paid for your service or has subscribed for your service.

Let’s see it like this. We acquired some users from the app install campaign. what will happen? (X+Y+Z is 100%)

1. X % Users will install and open the app and start doing activities. i.e Active Users
2. Y % Users are still to open the app. i.e Inactive Users
3. Z% Users uninstalled the app. i.e Churn Users

How does the app universe work in these cases?

Active users become inactive and then they churn out. You can do a churn analysis to check which user will churn out and in terms of retention X user will contribute to the retention. We have to re-engage the Y% of users to make them open the app. And we can do nothing for Z% as they have uninstalled the app we have to acquire them again. (I will share in the next post)

How is customer retention achieved?

There are a few critical steps you can take that will help you establish your app for higher engagement and retention rates before you even launch your app. You should be thinking about your app engagement and retention strategy long before you launch your app.

The first and arguably the most important step in boosting your engagement and retention rates is to build a quality mobile app. It’s rare that an app will be without minor bugs upon launch. It’s important to test your product correctly before shipping and ensure there are no significant issues. A diligent quality assurance process will help your team deliver a better product to market. If your app lacks proper functionality, your users will abandon the app without hesitation.

Let’s discuss some techniques which can be used to improve retention and engagement in the next post.