There’s little doubt of the importance of acquiring users but your app’s on a hiding to nowhere if you can’t keep a hold of them. If your focus on acquisition isn’t working, it might be time to revisit retention. But what does that look like and how are you going to do it?
Acquisition matters – but …
In the US, the average CPI (Cost Per Install) differs across platforms but sits at around $2, rising to $3.34 top-end. When app creators are willing to spend such a large chunk of their budget on acquisition, leaving something for retention can be overlooked.
Some facts to whet your retention appetite:
- Acquiring a new customer is between 5-25x more costly than retaining an existing one.
- Selling to a customer you already have has a success rate of between 60-70%, compared with a 5-20% success rate of selling to a new customer.
- 44% of businesses say their focus is on acquisition, with just 18% looking at retention.
- Increasing customer retention by just 5% can boost profits by between 25 and 95%.
… and yet, most companies are committed to a greater spend on acquiring new users than keeping current ones. You could say, they’d be right. If no one downloads your app, there won’t be any customers to retain. The fact is no matter how impressive your acquisition numbers, failure to live up to user expectations means they will continue to uninstall apps that don’t measure up. Think your app’s too good to bin? Almost 1 in 2 downloads are uninstalled within 30 days. Equilibrium needs to be found between acquisition and retention, one that brings ‘smart’ to the spread of marketing efforts and increases the chances of a long-distance run in the App Store.
“Get closer than ever to your customers. So close that you tell them what they need before they realize it themselves” – Mr. Jobs.
Acquisition – where are we?
The mobile app industry is one of the single most successful stories of the 21st digital century. However, we’ve also witnessed an unsustainable infatuation with short-term gains and endless growth hacks, but only a well-researched app strategy paves the way to profitability and sustainability.
According to Gartner, 80% of your business’s future profits will come from just 20% of your existing customer base. That big budget spend on acquisition you insisted on last quarter might have been more effective if you’d looked at what you’ve already got. Retaining these users will make the difference between your app’s success – or its sad decline and the long, expensive walk of shame to the big uninstall bin in the sky.
Boost your retention
80% of users churn within 3 days after downloading an app. The message is clear – have an engagement strategy in place long before your app even makes it through the App Store door. A smooth onboarding experience, easy in-app purchases, gentle nudges to complete your critical events – keeping your users interested throughout their journey. We tend to measure retention over a 90-day timeframe. Around 20% retained after that 90-day period is the average. There’s room for improvement! Here’s how to wow users:
- “Low barrier” to entry. Kick off with a simple app that does what it says on the tin and you’re halfway there. In other words, I expect your app to do all the hard work for me, which means ensuring the onboarding process is smooth and simple as possible.
- Personalization. Delivering a personal brand experience is the holy grail of retention. Companies getting smart around the Big P see a 5-15% increase in revenues. 72% of consumers will only engage with personalized marketing messages.
What does personalization look like? Customized push notifications, personalized product recommendations, rewards, offers and more.
Make it a habit. The average mobile user checks their phone around 150 times per day. They’ve invested time and money in ensuring that our phones are quite literally habit-forming. Nir Eyal, believes that “If your product doesn’t engage people within a week’s time or less, it’s going to be very, very difficult to build a habit around it.”
The Hook model – of course.
Trigger – The trigger is what compels a user to complete an action within your app and can be either internal or external.
Action – Users take app actions for all manner of reasons, but psychologically, reward tends to be at the heart of many of our in-app actions, even though we’re not aware of it.
Reward – Our virtual friend Nil describes the reward as an ‘itch being scratched’ The rewards are usually why your audience uses your app.
Investment – By successfully combining the trigger, the action and the reward, you’ve got a user who’s well on their way to making your app part of their life
Use push notifications, the single most-effective method of engaging – and retaining – your user-base. Study after study has found that using push notifications in your app marketing strategy can boost retention by up to 20%. However, push notifications can harm, as well as help your app retention rates if you approach them gung-ho. The challenge lies in striking the right balance of timing, frequency and value.
Provide exceptional customer service. This is something that any brand worth its salt should be doing in 2020, we all expect it!
Before we go …
App retention is a science – Add any number of strategies to the list, and you’d still discover something you’re not doing but your competitor is nailing. Retention is a long-haul activity that you’ll fine tune over time and learn what works. Smashing your customer retention strategy requires rethinking how you work with your budgets and investing in the technologies that will help you to achieve and exceed your retention goals.
At Kumulos our focus is on helping you to retain your hard-won audience through engagement.
Kumulos gives you all the tools to send rich, interactive messaging campaigns. Book your free demo to see how Kumulos can start turning your app users into loyal customers.