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How to Win With an App Retention-First Strategy

Shivkumar M Shivkumar M has over 20 years of experience shaping technology product and GTM strategy. With B2B SaaS expertise across industries, he leads product launches, adoption, and GTM as Director of Product Marketing.
How to Win With an App Retention-First Strategy

App launches, uninstalls, churn… If you’re wondering why you are frequently hearing these stats in relation to everything mobile app-related, that’s because this is the reality when it comes to mobile apps and their stickiness quotient.

  • Only 14% of users come back to the app on the day after download.
  • Only 10% stick around after one week of download.
  • Only 3% stay after one month of download.

A 97% app drop-off rate within 30 days of download.

A Download is No Longer the End Game

The cost of user acquisition has skyrocketed by 113% in the past year. So has churn. It is impossible to justify such high acquisition costs given the lifetime value of most users. Savvy marketers are shifting their emphasis to retention and decreased churn with smart engagement strategies that cost a fraction of acquisition campaigns.

As per industry standards, for every $100 you spend on acquiring a user, it only costs a third of that to retain them. The key to user retention is to understand their behavior so you can provide them with relevant, personalized experiences. The net effect: a loyal customer base that keeps coming back to your app.

Getting early success with app downloads is crucial. This means that you are delivering something the market is looking for. But once you accumulate a decent-sized install base, it is absolutely worthwhile to put more effort into understanding your users and their usage patterns, what drew them to your app, how they are interacting with your app, what keeps them ticking, etc. It is very important to constantly re-engage your users to keep their interest alive.

Early Engagement is the Key

Given the high drop-off rates in the early stages, your engagement strategy has to be so on point starting from Day 1 all the way through Day 7. In the brief duration post-download, the user will be more receptive towards communication from your app. Use that time wisely to get them educated and onboarded with meaningful content showcasing the value your app provides and ease of use etc. When you request users to opt-in for notifications, tie that up with an activity that delivers value to them. (For example: Would you like to receive a reminder for this?) When you make a soft-ask like that, you are more than likely to receive a “Yes”. Once you are in, make these notifications matter for them by providing useful info about the product and its features, and get them to try out your app as often as you can. Before you know it, they will be well on their way towards becoming a power user.

Customer Service in Motion

It is very important to constantly analyze every core move of your user and whip up campaigns on-the-go to influence their behavior.  A well-executed engagement strategy based on user behavior is like a well-oiled customer service engine in motion. Campaigns that are triggered based on user actions or inactions in the app can help you sell, upsell, problem-solve, make recommendations, show related content and more – all within a matter of seconds of the user performing an action. When you see traction among certain users, invest most of your efforts into them and keep recreating their positive app experiences to gain them as customers for life.

Take Personalization Beyond First Name Customization

Personalization is critical to make app engagement meaningful for your user. Using First Names for greeting the user, sending coupons on their birthdays, etc. is the more obvious type of personalization. As an app provider, the smartness is in taking personalization beyond the obvious and providing users with smart messaging based on their buying history, or making recommendations based on their buying frequency. This kind of personalization is not very apparent to the user but provides a wonderful experience within your app.  

If you can anticipate your user’s needs based on data and serve them what they are looking for, you can say that your personalization goals are met.  Check out how Google Now makes very intelligent recommendations about the time in traffic based on meeting location in your calendar .  How Amazon makes recommendations based on my buying history is also something that impresses me every single time.  

Segment Customers and Automate Your Engagement

Bucket your users as active users, dormant users and power users, and engage with each bucket differently. While dormant users need a ton of motivation to get them back on the app, power users will be looking for new app features and challenges to keep them excited.  You can also segment users based on their behavior, or to be more specific, the actions they perform, or do not perform in your app.

Advanced analytics platforms provide live streaming data that can provide you with actionable insights as these activities happen. You will be able to create rules to build  segments based on multiple criteria and the users will be added to these pre-defined buckets as they qualify. When you tie this to a smart messaging strategy, you will be able to tell a unique story to a unique user as they perform these actions, in real time.  Smart engagement platforms will provide you with custom templates that can help you create quick, easy and personalized push and in-app notifications on-the-go. The best part is if you choose a mobile platform that combines smart analytics with instantaneous messaging capabilities, all of these can be automated to create events that can trigger contextual messaging at the relevant time to the right user.

Maximize Intelligence With Live Data

Ultimately, it’s all about the data. The foundation of any smart engagement and retention strategy is the understanding of who the user is, what their likes and preferences are and why they are behaving in a certain way in your app. The key advantage for retention, as against acquisition, is precisely this understanding of users and their behavioral patterns on your app. As an app provider, you have the ability to learn these behaviors from your app so you can serve them with what they are looking for and make a meaningful connection with them. Most analytics companies provide basic data about your users. More advanced data companies deliver live streaming data where you can capture every move of your customer and make them actionable as they happen.

By using data effectively to understand and segment your users, and by automating your engagement with hyper-personalized messaging, you will be well-on-your way to creating a loyal customer base that every app provider wish for.  The charm is that you can achieve this merely by listening and learning from your existing customers because that essentially is the secret sauce for a successful retention strategy.  

Mobile Marketing is Easier with Expert Guidance
Posted on June 3, 2016