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My App Retention is Better Than Yours

In the next few minutes, I'm going to show you how you can delight app users, how to keep them coming back for more, and how you can completely do this on autopilot, so that you can relax knowing that app users will be engaged for the months and years ahead. Let's do it.


My App Retention is Better Than Yours

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One of the main problems that we see in terms of user retention is the pool is leaky, and a lot of companies ignore this. They want to just focus on, "How do we get new users? How do we develop new channels?". Maybe they even want to crank up the spend, and they're ignoring the fact that not only is their pool leaking customers, but it's like a torrent, you're completely hemorrhaging users, and almost every month the app is losing its entire install base.

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That's okay. You can just go and spend more money on user acquisition, right? You can get new users. You can burn the cash, but the problem with this is you're not going to enjoy compound month on month growth, keeping new users coming in, and retaining the existing customers that we have. So in today's video, I'm going to show you how you can find your focus. We're going to go over a little Retention 101: How we can take that retention curve that you have and bend it and how you can communicate with customers during the first couple of days of their activity.

Before we get into this, I just want to make sure that you're at the right stage to be watching this video, and that you're not optimizing prematurely. At the retention stage, we need to make sure that you've acquired users first. So you've developed your channels, and you know what's working. If you're an app or a startup, and you've just launched, and you've no idea what's working in terms of user acquisition, you haven't tested your channels, and you don't know your metrics, I would actually encourage you to go back to the User Acquisition video in terms of the Mobile Metrics series and get some information there and experiment with that first. And then when you have that down, come back to retention and let's fine tune that funnel together.

If we're moving on, I'm going to assume that you've nailed user acquisition before focusing on retention. Now, when I say that you've nailed acquisition, I don't mean that you're spending a fortune on this right now. What I really mean is you know your channels, you know what your metrics are, and you know which channels deliver the best LTV, or lifetime value, for the lowest possible CAC, or customer acquisition cost. With that in mind and with knowing our channels with confidence, we can progress forward to figure out what we do in terms of retention.

What is user retention?

Well, a retained user is deemed as someone who after downloading our application and after they start using it, they come back 30 days later and actively use our application. I don't mean they just fire it on up, and they have a session. I mean they complete one of your core use cases. In the broadest definition, that's what retention is. It's someone coming back after 30 days and actively using your application.

Of course, you could, and I'd actually recommend you to segment your retention across not only MAU, 30 day active, it has many names, but also customers that are active in each week and then also that are active in each day, or DAU. So in terms of retention, that's what you should expect. An average app loses its install base probably within about 30 days. 30 to 60 days, it's lost almost all of its users. And that's an average app, but I know that you're not an average app. You want to be a top app. So how do we improve this? How do we accelerate out?

You should be aiming for probably about 30% to 40% monthly active and between 10% and 15% of your user base as active on any given day. Now, I would like to mention that it does depend on your own vertical, the business model within your app, and of course, the utility value that you provide.

Remember, apps like messaging apps, and social, and gaming apps usually enjoy a great MAU and DAU by virtue of the incredible utility value that they offer. If your application doesn't do very much, if you're an eCommerce app, and you're not really improving the life of the user or providing deep utility, you're going to really struggle with your retention metrics in terms of getting users to hang around and actively use your app every day.

In terms of how you track this, you're going to need to instrument some kind of tracking. Whether you buy or build and use Google Analytics or maybe a Pulsate, you're going to want to know your unique users, you'll want to know sessions, you'll want to know how often these users come back. But more importantly, you want to track events inside your mobile funnel as well, because as I've mentioned, retention is not just someone coming back into your app. Well, they must actually do something of value to you and complete one of your core use cases. That's in terms of tracking and how that works.

And when you track, it's very easy to do something called cohort analysis. A cohort is basically a group of customers that do something in a certain period. Lets say, for example, we track customers that joined in January and also in February. And when we track customers that do things in the funnel at certain stages, actually, as mobile marketers, we can improve our app, we can improve the features, we can improve the performance, the messaging strategy, and so on and so forth. And we can do this in comparison to when users sign up.

In terms of retention, we can see if a new feature that was launched in February in the onboarding, did that actually impact the February cohort? Did they exhibit better retention metrics than the guys back in January? And by comparing cohorts, not only at the retention stage, but at all stages throughout the funnel, acquisition, activation, retention, referral, and revenue, we can measure what's impactful in our app, go back into our business and our strategy, and use this as information. What should we be focusing on, and what does not improve our metrics? This can be a great way to actually analyze what is happening and how you improve.

Next up, let's take a look at how we bend the curve on retention, and how we do it in a way that's very performant and in a way that is scalable. In terms of bending the curve, this is a typical retention graph for one of these average apps. Now, I know we're going to be a top app, but this is one of our average apps. Look at this black line. This is just a disgrace. In 90 days, this app has lost pretty much all of its users. This is the average app on the store, and you can see like after day 3, this application has lost almost 85% of the users that it worked very hard and paid a lot of money to acquire in the first place. And they've just slipped on out of the funnel. They're gone. You're not going to get them back.

When you actually compare this to some of the top performing apps, we take a peek inside their funnel, the top performing apps actually manage to become very useful with the utility value that they provide. They become useful very, very quickly, and as you can see, within day three to day seven, they actually hold on to a lot more users than the average app. The dropout happens at around the same stage, but that does mean that as a top app. But if you can get users beyond the first seven days, the chances are you're going to keep them a lot longer than that.

As an average app, probably your onboarding isn't great. Your welcoming strategy isn't that great. Your first run might be sub-optimal, and that's why you have users dropping out after day one, after day two, and everything is just kind of mediocre. You want to really figure out, "How do we bend this curve? And how do we do it?"

I'm here to tell you today, guys, that if you're trying to bend the curve, and you're trying to do it with tactics at the retention stage, you're already way too late. Activation, which is the last video that we covered in Mobile Metrics, is the great multiplier for retention. Everything that you do in the first couple of days when that user has that app, an excellent, world class onboarding strategy, the way you welcome users in, the way you make them feel valued and have them achieve their success milestone very quickly will really determine if they stay for the first couple of days and then if they're going to stay for day 30, and day 60, and beyond.

Your ability to bend that curve on retention actually happens at activation. And this is one of the biggest insights that most of our clients, to begin with, don't understand. To do this, we target the first few days of usage within the mobile app, and this is absolutely critical. I've talked about having a great onboarding sequence, communicating the value proposition. The way that you describe your product, the way that you attract your ideal customers to download your app, that is your greatest asset to impact retention later in the funnel.

And once you get those users in, make sure you make them feel welcome, onboard them, demonstrate the value proposition. You can check out our ASO video on app store optimization. We talk a little bit about that. Get them into that strategy. Get them into the experience of using the app, and have them hit success. Have them add that first to do of your to do app. How to plan that trip, book that flight, whatever it might be. Getting them book that taxi, whatever. Get them doing the thing that your app does, and get them to do it straight away.

Because if you don't get this done within the first couple of days, your ability to do this later in the funnel and move your numbers, your ability to do this is greatly diminished. That's it for today, guys. What I want to leave you with is don't forget you don't want this leaky pool. You will drip out some users, but before you dial up your spend on acquisition, chew on retention first.

Cohort analysis can be a great opportunity to understand what performance improvements, what boosts, what differences in communication, and what feature differences actually impact users at the retention stage and of course, other key stages within your funnel. Bending that retention curve won't happen with cheap communication tactics, but really happens at the activation stage. Don't forget to welcome users in and have them achieve success early within your mobile application.

Thanks for tuning in. Don't forget to leave a comment below the video. It helps us grow the whole community. If you have any questions at all, send us a tweet at @PulsateHQ, and I look forward to seeing you guys next time.

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