ASO Blog

5 Statistics That Show Retention Is the New Growth Hacking

Tue 10 May 2016, 4:43 PM - sarah

This week, we’re having the pleasure to collaborate with Sarah from Leanplum, mobile marketing platform. In this article, Sarah highlights the importance of app retention and gives 5 statistics to prove her point.


Retention is king

Maintaining a loyal app user base is no easy feat. When you’re first starting out, it can be easy to overemphasize the importance of growth and acquisition and lose sight of goals that may seem lower priority, such as retention.

But retaining and delighting your existing users results in long-term growth, revenue, and scalability. In fact, app user retention is at least equally – if not more – important than user growth and acquisition. Here are five stats to show you why, along with five use cases for how to counteract user abandonment and to encourage retention.

Only 10 percent of users stick around a week after downloading an app, and just 2.3 percent after a month

What this shows is that not only are users abandoning ship in hoards, but they’re abandoning it quickly.

This is important because it means that retention needs to be a high priority for an app hoping to stay in it for the long haul. If you don’t actively engage your users and win their loyalty within their first week of use, your chances of success in keeping them around during the next 30 days diminish greatly.

Push notifications are an easy way to draw a user back into your app in the first week. Push is handy here for keeping your app top of mind. A new user may not be in the habit of immediately going to your app — use push to entice them with personalized offers or reminders of abandoned purchases or unfinished levels.

About 52% of all apps lose at least half of their peak users after three months

This demonstrates that even after acquiring a steady user base, you’re going to need a strategy in place to hold onto them. Once again, an effective retention strategy is a marathon, not a sprint.

To modify the popular turn of phrase, what got them there won’t keep them there. To combat this, your retention strategy should continuously be adapting to user feedback and their developing wants and needs. Or better yet, consider adopting a proactive instead of reactive strategy.

A great way to get user feedback and encourage loyalty is to use in-app messages to ask for 5-star ratings. It’s especially useful to trigger this message after a user has shown loyal behavior, i.e. after booking a flight, making a purchase, or completing a level.

Attracting new customers will cost your company 5 times more than keeping an existing customer

This is pretty self-explanatory from a cost-benefit perspective.

Despite the fact that it makes much more sense (for financial reasons if nothing else) to focus on your existing users rather than new users, 44 percent of companies prioritize customer acquisition, whereas only 18 percent focus on retention.

Be a hero. Be the 18 percent.

An easy way to focus on retention is to use analytics to examine the behavior of your most active users. You can use these metrics to create triggered campaigns based on this behavioral data.

For example, if you’re a travel app and you’ve noticed a user has booked a flight and been researching trip itineraries, you could use an in-app message to ask them if they need to book a rental car or arrange for a pickup at their arrival destination. This kind of messaging shows that you’re paying attention to how they use your app, and want to continue to provide them with personalized service in the future.

Existing customers are 50% more likely to try new products and spend 31% more when compared to new customers

Your existing customers are the ones most likely to engage with your features and products. Plus they’re more likely to buy what you’re selling when you’ve already won them over once.

So, when we pair this information with the previous statistic, not only are they much more cost-efficient to maintain, but existing users will also be your more valuable users in the long run.

Announcing new features or products is a great opportunity to re-engage previously active users that may have recently become dormant. The best ways to reach an external users is through push or email. Let them know you’re still around and that you’ve got a new feature you think they’ll love.

80% of your company’s future revenue will come from just 20% of your existing customers

Another case of the 80/20 rule in action.

In the spirit of this rule (and from this statistic), it might be wise to focus 80 percent of your efforts on retaining these existing customers and the other 20 percent on acquiring new ones.

More on this below, but this is good example of why it’s retention and acquisition should be working hand in hand, rather than at odds.

A great way to maximize your revenue among your existing users is to test
price points and discounts for buyable items
in your app. You can use a/b testing to experiment with prices and aesthetics, then use the results to determine what performs best with your users.

The “So What”

Hopefully these numbers have convinced you that you should be thinking about growth and retention, and not just one exclusively. Only focusing on growth can create a large user base, but one that is much more likely to abandon your app in the future. Only focusing on retention can lead to missed opportunities in expanding your existing user base and finding new fans.

The biggest so what: how do you make this actionable?

If you’re looking for growth hacking tips, AppTweak has already got a great list of tips ready for you.

To be a hacking superstar, pair this with a committed retention strategy.

Retention isn’t a one and done campaign. You’re going to have to continually test and refine it as you respond to your users’ feedback and brainstorm new ways to engage with them.

When you’re ready to start retention hacking, check out our list of six in-depth retention hacking strategies to find out the tools you can use to engage early and often with your users.

Try Leanplum 30-day free trial here.

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App Store Optimization ("ASO") is the process of improving the visibility of a mobile app (such as an iPhone, iPad, Android, or Windows Phone app) in an app store (such as iTunes or Google Play for Android). App Store Optimization is the mobile equivalent of Search engine optimization. Specifically, App Store Optimization includes the process of ranking highly in an app store's search results and top charts rankings. ASO marketers agree that ranking higher in search results and top charts rankings will drive more downloads for an app. - From Wikipedia, the free encyclopedia.