App Developers: It’s Time to Focus on Retention Strategies (Report)

Nearly 70 percent of app users become dormant and can be reactivated with well-timed personalized push notifications.

Retention is one of the biggest challenges facing mobile application developers today. In many cases, apps hemorrhage users within the first few days of downloading, and when new users are necessary to grow services, this clearly needs to change. A report from mobile marketing platform Leanplum looks at how a lack of focus on retention is costing app developers money and users.

Leanplum analyzed more than 200 apps with at least 100 first-time users and tracked those users for up to 90 days to see if they uninstalled the app. Retention rates were pretty poor: Only 21 percent of users kept the app for one day, fewer than 10 percent kept the app for 10 days and by day 90, fewer than 2 percent of users surveyed were still using the app.

leanplum_app_retention

The issue with this drop in users is that it’s costing app developers a lot of money. According to data provided by mobile marketing platform Fiksu, the average cost per install for an app is $2 to $3.34. Leanplum’s simplified example of an app with 500,000 installs and 19,000 daily active users shows a retention rate of less than 4 percent and an acquisition cost of $1 million, leading to a loss of more than $900,000.

Apps need a retention strategy to reduce this massive loss. Push notifications were shown to increase retention up to 20 percent. Personalizing notifications, by sending them at the optimal time, increased the mean retention by an additional 6 percent.

One area the report covers that isn’t often mentioned is dormant users. The analysis found that only 23 percent uninstalled an app within a week, while 9 percent remained active users. The remaining 68 percent are dormant users, who could be reactivated with well-timed, personalized push notifications.

It’s not even necessary to recapture all of these users; Uber has an estimated 8 million downloads and 1 million trips per day and, assuming that the average ride costs $5, Uber could gain $1.125 million per day if it were able to activate just 15 percent of its dormant users.

For more information, tips and examples, download the report.

Image on homepage courtesy of Shutterstock.