The app retention blueprint: 8 best practices to improve app retention

The majority of a product manager and owner’s work starts after acquiring the app users or customers – which is, engaging to retain them. A brand spends around on average about $10 - $300 per user (depending on industry and acquisition platform) to acquire users for their product.

Now imagine spending this money – only to see your user check out the app for a day and churn. That’s money wasted unless you strategize to retain your acquired users.

To highlight the gravity of the situation, consider a scenario where a well-designed, funded, and feature-rich application fails to retain its user base. The consequences are not merely a dip in-app statistics; it translates to lost revenue, decreased brand loyalty, and a tarnished reputation. This is where the concept of app retention becomes pivotal.

“If your retention is poor, then nothing else matters.”

– Brian Balfour, Founder/CEO of Reforge

We help you understand the concept of app retention and best practices to improve the app retention rate of your product.

What is app retention?

App retention is a product strategy of not merely acquiring users but keeping them engaged over time to ensure they make the best use of the app.

Irrespective of how many new users you sign up for your app, it will still fail if they do not stay long or abandon the app. This is because a user signing up for your app is merely the first step in its user journey to become a paid customer and advocate your product. 

According to Andrew Chen, within the first 3 days of signing up, about 77% of new users abandon an app, while 30% of daily active users are churned within 30 days. By investing in your existing users for engagement and product satisfaction, you make sure they are on track with the designed user journey.

Note: app retention is not a static concept. It evolves as your app grows, encounters updates, or faces changes in user behavior.

4 key benefits of focusing on your app retention strategy

1. Revenue Generation: while the number of downloads might boost your ego, it's the active, retained users who contribute to sustained revenue. These users are more likely to make in-app purchases or subscribe to premium features, thus becoming a consistent source of income.
2. Brand loyalty: apps that keep users coming back build a sense of trust and loyalty. These users become advocates, spreading positive word-of-mouth, and contributing to the app's credibility. Conversely, a low retention rate can tarnish your brand reputation, making it harder to attract new users.
3. User lifetime value (LTV): retained users, over time, contribute more to your app's success compared to one-time users. Focusing on improving LTV helps maximize the value derived from existing ones.
4. Cost efficiency: acquiring new users is often more expensive than retaining existing ones. High retention rates mean you can allocate resources more efficiently, focusing on refining the user experience rather than constantly chasing new sign-ups.

What is the app retention rate?

To understand how your app is performing in terms of usage, you calculate a product metric called app retention rate. It is the percentage of users who continue to use an app after their initial sign-up for a defined period (like 1 day, 1 week, or 1 month). You can define what ‘usage’ really means — for example, it could be the number of users who open your app in a specific period spent on the app.

A high app retention rate signifies satisfied, loyal users, while a low rate indicates product issues that need addressing.

Check out key app retention benchmarks by industry

According to Statista's report, here are the latest app retention benchmarks across 10 major industries:

8 best practices to increase app retention

Now that we've identified the importance of app retention, let's delve into practical strategies to boost your app's longevity in the user's device. These best practices are designed to cater to the needs of users while aligning with the business objectives.

1. Remove friction from the onboarding flow

If your onboarding flow is simple and straightforward, it makes the user comfortable to use the app. According to Invision, you have only 20 seconds to impress a user – based on which, they decide if they wish to continue engaging with your product.

The onboarding process sets the tone for a user's entire journey with your app. A convoluted onboarding experience can lead to frustration and, ultimately, abandonment. 

But when your onboarding process is intuitive such that the user can understand your product on their own, they feel more confident to use it for their workflows. Apart from simplifying onboarding, you must also focus on delighting them with features that help them effectively solve their use case using your product.

Here’s how to go about making your onboarding simple and delightful:

1. Make it easy to sign up: minimize the number of required fields, asking only for essential information. Consider incorporating social media or single sign-on options to expedite the onboarding process. Remember, the goal is to get users into the app swiftly, not to collect an exhaustive set of data upfront.
2. Use interactive guides: instead of bombarding users with information, use Nudge’s interactive onboarding tours that introduce them to key features gradually. This hands-on approach allows users to learn by doing, making the onboarding experience more engaging and less overwhelming.

3. Clear call to action copy: use intuitive language and design elements to prompt users to take the next step. Avoid ambiguity, and ensure that users understand the purpose of each action within the onboarding process.

2. Use in-app messages to guide, not disturb

Imagine a scenario where an existing user opens your app and encounters a new feature. Without in-app messaging, they might feel lost or unsure about how to navigate through the changes. In-app messaging acts as a virtual guide, providing timely and relevant information to users, and ensuring they make the most out of your app.

Making it personalized further helps tackle any friction points of using your app. For instance, a user who frequently explores fitness features might receive messages related to new workout plans or nutrition tips. This tailored approach enhances the relevance of your messages, making users feel understood and valued.

Typical use cases that can help improve user retention using in-app messages include:

Announce new features and updates

In-app messaging serves as your direct channel to communicate updates, ensuring users don't have to discover changes independently.

Proactively highlight the benefits and improvements, clearly articulating how new features enhance their experience, sparking curiosity, and encouraging exploration.

Implement re-engagement strategies via in-app messages

Users who have been inactive for a while might need a gentle nudge to rekindle their interest. In-app messaging can serve as your re-engagement strategy, delivering targeted messages or exclusive offers to entice users back into the app. The key is to strike the right balance – not too frequent to be intrusive, but frequent enough to stay on the user's radar.

3. Implement a loyalty program to reward existing customers

When your users continue choosing to use your product over others, you must make them feel special for doing so using freebies and discounts. Recognizing and appreciating users who consistently interact with your app not only encourages retention but also transforms them into enthusiastic advocates for your brand.

The key here is to make sure they feel as if they have got ‘a good deal’ by sticking with your product.

A typical way is to introduce a reward system to get discounts or coupons.

Many people save money on flight tickets thanks to airlines offering ‘frequent flyers’ rewards programs. The same goes for credit cards – where they offer ‘points’ that you can use to spend on their partner offers.

For your product, create a point system or tiered rewards structure tied to specific activities within the app. As users accumulate points through interactions, they can redeem them for exclusive discounts, premium features, or even physical goods. This not only incentivizes continued app usage but also strengthens the emotional connection between users and your brand.

4. Personalize user experience

Today, for every task, you will be inundated with hundreds of products to choose from. But users seek not just functionality, but a product that understands and caters to their individual preferences.

Begin by collecting and analyzing user data. Track their interactions within the app, such as frequently visited sections, preferred features, and usage patterns. Then, segment your user base based on demographics, behavior, or preferences. This segmentation allows for the creation of targeted and relevant personalized experiences for specific user groups.

Based on this data, you can show personalized experiences, adapt user interfaces, reward them, or send personalized messages based on their activity.

While personalization is great, do consider the context in which users engage with your app. For example, the time of day, device type, or even external factors like weather can influence user preferences. Adjust the app's content and features dynamically based on these contextual factors to enhance relevance.

5. Make existing users feel heard via user feedback 

Understanding the user's perspective is essential for creating an app that resonates with their needs and preferences. User feedback goes beyond identifying bugs or glitches; it unveils the user's expectations, pain points, and desires. It serves as a direct line of communication between you and your users, providing invaluable insights into what works well and where improvements are needed.

You can collect user feedback via:

• In-app surveys or feedback forms
• Checking user reviews across review platforms or discussion forums
• Set up beta testing programs to take help from existing users to improve your product.

Based on this user feedback, categorize them to prioritize issues. Actively communicate the actions your brand plans to take to make the users feel heard.

User feedback is not just about fixing what's broken; it's a catalyst for continuous improvement. Leverage feedback to innovate and stay ahead of user expectations. Identify trends and patterns that suggest evolving user preferences, allowing you to proactively iterate and adapt your app to meet changing needs.

6. Conduct A/B tests to find what sticks with the users

A/B testing is a useful process that involves comparing two versions of a feature, design experience, or message to determine which performs better in terms of user engagement and retention. Instead of assuming what users may like, this process allows product managers to make data-driven decisions to optimize their app based on real user behavior.

Here’s how to use A/B testing for app retention:

Imagine you're uncertain about the effectiveness of a new feature placement within your app – should it be prominently displayed on the home screen or tucked away in a menu? By conducting an A/B test, you can gather data on user interactions with both versions. If the variant with the prominent display leads to increased engagement and longer session durations, you have a clear data-backed decision on how to optimize your app for better retention.

Using Nudge, you can track your designed user experiences and measure their effectiveness from the analytics dashboard.

7. Implement gamification within your product

Gamification taps into human psychology, competition, and the desire for achievement to help transform the user experience into an engaging journey. Integrate a point system within your app, awarding users for completing specific tasks, reaching milestones, or mastering certain features. Achievements not only provide a sense of accomplishment but also act as a visual representation of a user's progress, encouraging them to explore more.

Nudge’s Game Zone is a feature that can help you directly implement engaging and casual games like Chess, Carrom, Pool, Tambola, etc within your product.

Else, you can also implement some gamification strategies for your product as follows:

Achievement badges

LinkedIn recently introduced ‘Top voice for ‘xyz’ topic’ as a badge for recognizing users who contributed to their LinkedIn articles. People who got these badges shared posts about receiving them, thus feeling proud for contributing. Further, LinkedIn allows you to keep these badges for consistent contribution only, again ensuring existing users keep engaging with this feature.

Introduce achievement badges or recognition for specific milestones reached within the app. Whether it's completing certain tasks, reaching usage milestones, or contributing to the app's community – these virtual badges serve as a tangible acknowledgment of a user's commitment. Like LinkedIn, publicly showcasing these achievements can further motivate users and create a sense of friendly competition within the app's community.

Leaderboards

Introduce friendly competition by incorporating leaderboards that display user rankings based on various metrics relevant to your product. Whether it's points, levels, or completed challenges, leaderboards foster a sense of community and drive users to outdo themselves or their peers, while also working hard to maintain their current levels. 

Duolingo’s leaderboard quests are a good example of implementing leaderboards:

Progress bars or leveling up

Implement progress bars or leveling systems within your app to visually represent a user's journey. Whether it's completing tasks, earning points, or unlocking features, the feeling of progression keeps users invested in the app. Leveling up can bring a sense of accomplishment, and users will anticipate the next stage, driving continued usage.

For example, this is a concept progress bar by The Think Pixel on Dribbble for a runner’s app. Here, the user can see their current progress and final set goal, thus motivating them to continue to achieve it.

Social integration for collaboration

Allow users to connect, either through social media integration or within the app itself. Enable collaboration on challenges or missions, and let users share their achievements on other major social apps.

Social interaction not only enhances the user experience but also leverages the power of social validation, motivating users to stay engaged and connected.

For example, Spotify has developed its community forum to enable its users to interact and socialize with each other. They can discuss music, podcasts, and ideas, or get help about making the most of Spotify’s platform.

8. Reduce time to value

Time to value refers to the time it takes for a user to realize the benefits and value your app provides. In a fast-paced digital landscape, users have limited patience, and if they don't see the value of your app quickly, they're more likely to abandon it. 

All the previous 8 methods discussed in this article help you reduce time to value. Other techniques include communicating the app's value proposition clearly and concisely throughout the product. Or demonstrate quick wins or immediate benefits while using the app.

Need help in implementing these best practices for app retention?

Investing in app retention helps you become more user-centric and helps align with their expectations. This translates to more chances of upselling products and better customer lifetime value.

“Let’s take most of the money we would’ve spent on paid advertising and paid marketing, and instead of spending it on that, invest it in customer experience/customer service and then let our customers do the marketing for us through word of mouth.”

– Tony Hsieh, ex-CEO Zappos

At Nudge, we help you design and implement user experiences that help improve app retention rates. From in-app messages, and onboarding flows, to gamification, our platform helps you implement multiple app retention strategies and track its impact in a single place – book a demo to learn more.