When measuring the success of an app, developers and publishers have a plethora of metrics at their disposal. Daily active users, monthly active users, and IAP conversion are just a number of factors that help determine how an app is performing.
One of the most important metrics, of course, is retention. Retention metrics for apps ensure that users remain active after that initial download. “Retention” however, isn’t a single, monolithic statistic. In this blog post, we’ll discuss the nuances of measuring retention that app developers need to know.
Jump to a section…
What Are Retention Metrics for Apps?
In the mobile world, the term “retention” refers to users who continue using an app after downloading it. As we’ll discuss below, there are a few key time periods that developers should be looking at when it comes to retention. In a nutshell, retention refers to the percentage of users who stick around.
Classic Retention vs. Rolling Retention
There are a few different ways to measure retention usually measured at a few key intervals in the user lifecycle.
Two of the most popular methods are classic retention and rolling retention. Classic retention, also known as retention by day, is a static number, calculating the percentage of steady users that have stuck around after regular intervals — Day 1, Day 7, Day 30, and so forth.
Rolling retention on the other hand, is a measure of the percent of new users who return on or after a specific day, so will change every time it’s calculated. Rather than measuring retention during a 30-day period, for example, one might collect rolling retention metrics from November 1. If this is measured on November 4, we’re looking at an analysis of retention from November 2-3. If we wait until the end of the month, however, the rolling retention for 11/1 is measured from November 2 to November 30. Users that haven’t been retained are said to have “churned”.
What is Churn?
Churn and retention are diametrically opposed. Churn refers to the users who stop using an app after a specific period of time. This could mean people who abandon it after one use, or those who stop opening the app 30 days after downloading.
Ideally, app developers will see churn rates stay low while retention rates rise. If your metrics are trending in the opposite direction, it’s a good sign that you need to step up your retention efforts.
Key Retention Metrics for Apps
Now that we have a good idea of what retention and churn are, it’s time to get into the nitty-gritty and look at more specific metrics. It’s worth noting that there are different schools of thought when it comes to measuring retention, but these particular benchmarks are almost universally used by app developers, publishers, and marketers.
Day 1 Retention
Think of Day 1 retention as app users’ first impressions. In other words, are users actually opening the app after downloading it? Are they getting to know your app and enjoying their time with it? Tracking retention on the first day of use will give you a good idea of how well your onboarding process is working.
In the freemium world, it doesn’t take much to download an app if only to learn more about what it has to offer. Consequently, Day 1 retention tends to be fairly low. That said, ideal benchmarks vary by app type. No matter who you are, if you’re not retaining more than 75% of users on Day 1, you’ve got some serious issues. If that’s the case, your development team needs to take a hard look at the factors that might be turning users away at the door.
Day 3 Retention
Though it might be tempting to check app retention every day, that’s not a productive use of time. Day 1 and Day 7 are often the first two significant retention markers, but checking in on Day 3 can be useful, if not strictly necessary.
Why? According to Upland Software, 21% of users uninstall an app after one use. Day 3 retention gives you an idea of what percentage of your users are in that group. If there’s a huge dropoff between Day 1 and Day 3 retention, it’s time to figure out what’s making your app a one-hit wonder among users.
Day 7 Retention
This metric shows how many app users are sticking around a week after downloading. While it’s normal to see some dropoff in retention between Day 1 and Day 7, that decline shouldn’t be a cliff.
If your app monetizes via in-app purchases, there’s another reason Day 7 retention is so important: “There are more payers on Day 7 than Day 1,” explains Mark Robinson, co-founder of deltaDNA. “It is not unreasonable to assume that players that are still playing after seven days are better candidates for paying than those still playing after only one day.”
Day 30 Retention
Some developers use Day 28 instead of Day 30, but the goal is the same: discovering how many users have stuck around for a full month. Like on Day 7, Day 30 users have a higher potential to pay. By this point, users have made your app part of their regular routines and developed a sense of loyalty to it.
The difference between Day 1 retention and Day 30 retention might look severe, but the truth is, only a small percentage of people who download an app continue to use it for that long. Measuring a month’s worth of retention will give you a pretty good idea of your dedicated user base, and will also help you determine metrics for re-engagement campaigns.
Sometimes abbreviated as LTV or CLV (for Customer Lifetime Value), Lifetime Value is the projected revenue or value of an average user over their lifetime in the app. According to Retention Science, “Determining each individual consumer’s CLV can help you retarget your marketing efforts, retain your most valuable customers, and save you heaps of money in the long run.”
LTV ensures that those users you’re retaining are high-value. It’s a metric you’ll want to study consistently, as lifetime value and retention go hand-in-hand when it comes to an app’s long-term success.
None of these metrics provide a complete picture of app retention on their own, but when analyzed together, they provide critical insights for app developers. Too many devs and publishers focus too much on user acquisition, which certainly has its place in an app marketing strategy. However, it costs five times as much to acquire new users rather than retain existing users, so having an effective retention strategy in place pays off in the long run.
Ready to learn more about app retention and how to increase it? We can help! Get in touch with the experts at wappier.