Take Control of Churn with Retention Analysis

September 26, 2019
Take Control of Churn with Retention Analysis
General

As a mobile marketer, you understand the importance of user retention for business growth. After all the time, effort, and resources you’ve spent creating brilliant acquisition campaigns, seeing new users churn just straight up sucks. 

Fighting churn can feel like an impossible battle — one that you can never truly win, just lose a little bit less. And without the right insights, it’s like shooting blindly in the dark hoping to hit something that works. 

But it doesn’t have to! Retention analysis puts the power back in your hands so you can create an effective, data-driven battle plan to get ahead of churn. 

What is Retention Analysis?

Retention analysis involves examining how long users stay active on your app. What factors contribute to customers sticking around — or leaving? 

These insights are the foundation for building a successful retention marketing strategy and sustainable business growth. 

How Do You Analyze Customer Retention?

Part of what makes app retention a sticky subject is the fact that there is no one-size-fits-all solution to churn. 

Every app is different, every user is different, and there’s no silver bullet that works for everyone. Every business has to develop its own strategy based on its unique customer base and product. 

Before you get started with customer retention analysis, you need to answer a few questions about your specific app. 

First: what counts as an active or inactive user? 

Before you can measure churn or calculate retention numbers, you have to be able to define which users have met your criteria for each. 

Some apps consider anyone who launches the app an active user. Others only count a user as active if they complete a specific event like uploading a photo, conducting a search, or streaming content. 

Only you can determine the best definition for your app — but we recommend tying your criteria to key in-app actions that are directly related to business KPIs.

Second: what are users doing inside your app? 

Look beyond app launches. How meaningful is their engagement? Are users converting, and how often? What actions or features are associated with higher retention? 

This is why real-time analytics are so essential for mobile marketers. 

You have mere moments to act on customer interest and intent. Understanding what users are doing inside your app right now is the difference between timely campaigns that hook users with deeper engagement — and missed opportunities that lead to churn. 

Once you have answers to the questions above, you’re ready to measure your app’s retention rate. 

So how do you calculate customer retention rate? 

Calculating retention involves taking the number of users that remain at the end of the time period and comparing it to the number of users you had at the beginning of the period. Divide the difference by the number of customers at the beginning of the period. For measuring retention as a percentage, simply multiply by 100. 

Use our Retention Rate Calculator to measure your retention and churn rates easily.

What is a Retention Report?

A retention report is a visual graph that breaks users into groups based on when they first completed a specific action — like launching the app — and when they came back. It’s one way for marketers to track retention over time to discover trends and identify when most new users drop off.  

Here’s a sample retention chart, also called a cohort retention chart:

This graph shows a series of groups (cohorts) of new users who have downloaded and launched an app for the first time on a specific day. It then shows how many of them come back to launch the app over the next 10 days. 

Another way to look at this information is in a customer retention graph or retention curve. 

With cohort analysis, you can clearly see where the most significant drops in user retention occur so you know your time frame for hooking new users — and where in the customer journey to focus your marketing efforts in order to improve retention

Analytics + Action = The Formula for Greater Retention

Retention analysis is an important step towards retaining users and growing your app. But it’s only the first step. 

Simply analyzing retention after the fact is just playing catch up. And it’s a losing game. With the right data science tools, you can get ahead of churn instead of reacting to it

Retention marketing solutions like CleverTap give you the answers to these key questions: 

How often do new users return? 

With Retention Cohorts, you can see exactly when new users come back to your app and how often. 

Go beyond baseline numbers to track how different user groups behave over the course of the entire customer lifecycle, from onboarding to purchasing or uninstalling. Compare cohorts by acquisition source, geography, customer type, in-app behaviors, etc. to see how your retention marketing strategies affect different customers.

With these insights, you can build omnichannel onboarding campaigns that bring new users back into your app, help them experience your app’s value, and prime them for conversions.

Where are users dropping off? 

Funnel analysis helps you understand exactly how people are interacting with your app. It visualizes the user journey to show how many people are completing key in-app activities that drive retention — and where they drop off. 

It’s a powerful tool for uncovering what users want from your app and where you need to deliver it.

Compare funnels in order to focus on user trends across geographies, technographics, product categories, and more. 

Does your sign-up process have too many steps? Do users acquired from Instagram stay active longer and spend more than users acquired from Facebook? Do users who favor a specific feature or buy a particular product have higher customer lifetime value?

This information is critical for informing your growth strategy. Once you have the answers you’ll be able to perfectly target and time campaigns for better engagement, higher ROI, and greater retention.

Which actions are associated with higher retention and higher churn? 

Flows is a powerful analytics tool that shows you what users do before or after performing a specific in-app event, like viewing a product, opening a push notification, or uninstalling your app. 

With these insights, you see exactly which actions are directly associated with churn to re-engage users who are heading down that path before it’s too late. And you’ll improve the user experience and encourage new users to follow in your champions’ footsteps. 

Which users are at risk of churn? 

RFM Analysis automatically segments your users based on how often and how recently they’ve engaged with your app. Get immediate insights into your champion users to keep them engaged as repeat customers and brand ambassadors. And quickly identify and engage dormant users to keep them from uninstalling your app. 

Using RFM’s reachability metrics, you’ll also see which channels are the most effective to reach your dormant users and bring them back to your app. 

From Analysis to Action

Retention analysis is a critical first step in understanding how many people are truly using your app and experiencing its value. But you can’t stop there. 

With the right data science tools, marketers get meaningful insights into the underlying causes of churn — and more importantly, predict which users are at risk. This deeper understanding is the foundation for effective engagement campaigns that build meaningful customer relationships, deepen loyalty, and make users fall in love with your app. 

See how CleverTap’s industry-first data science tools can uncover the secret to greater retention for your app. Schedule a call with our mobile marketing experts for a personalized demo. 

See how today’s top brands use CleverTap to drive long-term growth and retention

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