6 Key Mobile App Retention Metrics You Should Follow

In general, there are 2 types of mobile apps that you will come across in the market: 

Sales channel apps – Also known as transactional apps, these are apps that aren’t products themselves, but act as channels through which real-world products are sold. Examples include Amazon, Ebay and Uber. 

Product apps – These are apps that are products to be used themselves. Examples include Facebook, Instagram and WhatsApp.

Sales channel apps usually track metrics such as Conversion Rate and Basket Value which use the same e-commerce framework that sells on websites.

On the other hand, product apps make use of numerous metrics such as Installs, Virality and Retention, which use various methods when it comes to measuring their app retention. 

What is app retention? 

In a few words, app retention is the process of keeping mobile app users connected to an app.

In a world dominated by mobile app competition, app retention metrics are incredibly useful for determining the level of success for your app.

It can be argued that mobile app retention is just as, if not more important than mobile app user acquisition, as it is harder to keep users coming back to use your app. This is because churn, the percentage of users who uninstall or stop engaging with an app after a while, is increasing.

You can measure your app retention by dividing the number of monthly installs by the number of active users in that month. 

Why would you measure user retention?

Measuring your app retention rate can help you understand your user’s Lifetime Value, or LTV, which allows you to calculate how valuable a new user is to your app. This then helps you plan updates and features according to when and why your app is losing active users.

As an app developer, you probably want to know which day in your app’s lifespan your users begin to disengage with it. You will seek the reason behind why they stopped using your app, or your mobile app churn rate. One way to find this out is by analysing cohorts, which lets you understand user behaviour data and discover ways to retain your users.

What are cohorts?

In the world of mobile marketing, a cohort is a group of users that is distinguished by a common feature. As long as the users share the same identifier, such as belonging to the same country or downloading your app at the same time, they make useful data for your  mobile app retention rate statistics.  

Cohorts are especially useful if you are a mobile app marketer. They can help you form data from the metrics falling under a specific behaviour. 

After a user installs your app, they have a lifespan during which you can track their engagement. One issue with this is that in the face of a changing user base, it is difficult to implement exact changes.

If you want to see how your changes have affected your users, you will need to analyse the same group of users. Your user engagement rates will depend on each user and between the different periods of your users’ lifespans. This means that while your changes may affect some of your users, it may not do so to others.

Studying cohorts then allows you to see where your optimizations have benefitted and where they haven’t. It allows you to see which campaigns have worked, so that you can keep using them to target users that fall under the same behavioural bracket. This saves you time and money.

 

The 6 most important metrics for measuring retention 

Now that we’ve defined app retention and its importance in guaranteeing the success of your app, let’s move to the 6 most important metrics you can use to measure your app’s retention.

1. D1 retention 

If D0 represents the number of users who opened your app on the day of installation, D1 retention is the number of users who chose to come back to your app after installing it the day after they installed it divided by the users who opened your app on D0.

Day 1 retention signifies your users’ very first impressions. It determines if users are actually opening and using your app after downloading it. It also measures how much time they’re spending on the app, and whether they are benefiting from its use.

As such, D1 retention tracking helps you see if your onboarding process is working to the level of your expectations.

When apps are free to install and try, D1 retention rates will be considerably high.

If your app is not retaining more than 75% of users on Day 1, then there may be errors that you and your team of developers need to study and fix in order to bring back users who have been put off from the very beginning. This is because, on average, 75% of users do not return the day after the app’s first use.

2. D7 retention

Following on from D1, D7 retention represents the number of users who are still using your app 7 days after installing your app divided by the number of users who used your app on D0.

This metric indicates how many users came back to your app after 7 days of having installed your app. The number may be lower than that of D1, but not significantly lower.

D7 retention is crucial to monitor if your app requires your users to pay for a subscription. By the 7th day, they will have made a decision as to whether they would like to continue using your app and its benefits.

3. D30 retention

Whether you’d like to measure your retention rate for Day 28 or Day 30, you will want to find out how many users have been actively using your app for a whole month. As with D7, D30 users are more likely to stick around for a paid subscription, since your app will have formed a part of their daily routine.

You will most probably find that your D30 retention rate is much lower than your D1 retention rate, because only a small number of people will be inclined to keep engaging with your app for such a long time. However, tracking your mobile app user retention for a month will help you identify your loyal user base, which will allow you to discover the best campaigns to re-engage users.

4. Total active days (TAD)

Total active days, or TAD, signifies how many days a new user spends on your app during the installation’s lifespan.

TAD acts as the monitor of your user’s relationship with your app, if you will. It tells you how strong the relationship between your user and app is from the moment they install it to the moment they uninstall or stop using it.

To determine the exact frequency of usage by each user, the Total Active Minutes per User (TAM) is a much more useful metric to take into account. This is calculated by multiplying the TAD by the active minutes per day. Since 60% of apps are only opened once, it would be wise to first focus on getting users to actively use your app in the first place.

Why is TAD important?

It represents your app’s quality: No matter how many metrics you measure, the most important aspect to showing your app’s success is the amount of active users you have, which makes your app fit for the market.

It indicates your profit potential: It doesn’t matter if your monetization comes from advertising or in-app purchases, or IAP, these tactics become profitable only if your app has an active user base.

It signifies your app’s worth: The most important factor to an app that is valued at a significantly high price, as proven by worldwide popular apps such as Facebook and WhatsApp, is their hundreds of active days per user. 

5. Daily Active Users (DAU) 

Daily Active Users, or DAU, is the number of active users who use your app in a single day.

One point to bear in mind is that this metric is calculated per user, and not per engagement. So if a user opens and uses your app numerous times in a given day, the DAU rate for them will still be 1.

Knowing the DAU rate of each user lets you know how many unique visitors your app is receiving per day.

The DAU is calculated by measuring the number of users who open your app in a single day.

6. Monthly Active Users (MAU)

Monthly Active Users, or MAU, is the number of unique users who open your app over a whole month (30 days).

This metric allows you to determine your app’s ability to acquire and retain your users over a 30-day period.

The MAU rate is calculated by measuring the number of users who open your app within a 30-day time period.

How to improve mobile app retention rates?  

1. Individualise users 

Features such as a user’s location or preferences can form a part of a user’s unique experience, and can be used to retain your users for your app. Individualising your users in such a way can help you categorise your users according to their experience.

Individualization can make re-engaging users much easier too, which helps you retain them and maintain an increased revenue.

2. Concentrate on re-engagement tactics 

Optimising your app to engage with different types of users can have an instant effect on your app’s retention rate. You can use your existing audience to re-engage users as well, such as sharing user stories or creating ranking tables that make your app stand out.

3. Fix errors that hinder your user experience 

Almost every app will have errors that need to be fixed in order to retain its users. Updates can help re-engage users who were lost to an inconvenient experience. An effective way of addressing an error point is by pinpointing the cause of a high app churn rate where large numbers of users stop using your app at the same time.

4. Identify user preferences with A/B testing 

When adding a new feature to your app, you can use A/B testing to determine if the new update will be appreciated or disliked by your users. A/B testing is when you test your latest feature on different types of users which can help you understand which parts of the feature need to be modified before introducing it to all of your users.

5. Optimise your user onboarding process 

The highest number of users tend to leave between Day 0 and Day 1, so improving your user experience during this period known as the onboarding process can make a large impact on how many users you end up retaining.

Users can be sold on an app from their first engagement with it, so relevant messaging and instructions that show your users how to use your app and the benefits that come along with using it can lead to an increased mobile app user retention.

What are mobile app retention benchmarks?  

Mobile app retention benchmarks help you compare your app with other apps in order to understand your campaign’s success.

Even though benchmarks will depend on each industry, mobile apps on average tend to maintain a 30-day retention rate of 42%.

While the average 90-day retention rate is 20%, you can aim for anything above 25% depending on your industry.

Do you need help with tracking your app’s performance? Reach out to one of our experts.