Humans have a short attention span, and like it or not, keeping users engaged in mobile apps is tougher than ever. There are countless apps vying for attention, and yours could easily become just another forgotten icon on a user's phone. However, with the right strategies, you can defy the odds and keep users coming back for more.

Did you know that an average app loses a whopping 77% of its daily active users within just three days of installation? After 30 days, the retention rate drops to a mere 5.6%. However, here's the silver lining: users who engage with an app weekly have a 90% chance of sticking around long-term.

That's where retention comes in. It's one of the most crucial metrics for any app, determining its success in the long run. If users make using your app a habit, you're in for the win – and the cash flow! But how do you achieve this coveted user loyalty?

In our guide to mobile app retention, we'll talk about retention rates, exploring what it is, why it matters, and how you can improve it.

Mobile App Retention Rate

For mobile apps, the retention rate shows the percentage of users who keep using an app over a certain time frame, like a week, month, or quarter. It’s the opposite of customer churn, showing the percentage of users who stay rather than leave.

Knowing and tracking retention rates are key to an app’s success because they hint at growth trends and revenue potential.

A higher retention rate shows an app engages users well. However, the way you define app retention depends on how you want users to use your product.

For example, if your app helps with grocery shopping, an engaged user might use it every week for their shopping trip. If you have a language learning app, an engaged learner might be someone who uses it for at least a 5-minute session every day.

Plus, it’s important to compare an app's retention rate with industry standards to measure success and set realistic retention goals.

How to Calculate App Retention Rate

The most basic way to calculate the retention rate for a specific period of time is by using the formula below:

Retention rate = [ No. of users at the end of the period - No. of users who joined during the period / No. of users at the beginning of the period ] * 100

Now, before you can calculate your app's retention rate, you need to figure out two things:

(1) what counts as an engaged user, and

(2) your measurement period.

Here's what to consider for both:

Engaged users: Define engagement by choosing actions to track and how often they should happen. For example, a fintech app might count making a financial transaction as engagement, expecting users to do this at least once a week.

Time period: Choose a time frame for measuring retention, such as 7-day, 14-day, and 30-day rates. This helps you see when users stop using the app.

The retention rate often involves cohort analysis. It compares those who downloaded the app around the same time to other groups or cohorts of users. This helps understand user behavior and find reasons for changes in retention.

Top Statistics of Mobile App Retention Rate

For mobile apps, the retention rate is usually measured at 1 day, 7 days, 30 days, and 90 days after users install the app. The rate at each interval shows how well the app keeps users engaged and loyal. Higher retention rates mean the app is good at meeting the users' needs.

Generally, a retention rate below 10% is considered poor, around 20% is average, and anything above 40% is excellent. However, these rates can vary depending on your product or service, goals, and investment in development.

According to the 2021 Statista research, the average retention rate across different categories on the day of app installation is 25.3%. This means around a quarter of users keep using the app on the first day.

But over time, this rate falls a lot — by day 30, the average retention rate is only 5.7%. The retention rate varies by app category; for example, news apps have a higher retention rate than other types of apps. In fact, in the third quarter of 2023, news apps had the highest retention rate of over 9% after 30 days of installation.

Retention rates also differ according to the phones the apps are used on. For example, in 2023, the average retention rate of iOS apps was higher than that of Android apps.

On day 1, iOS apps had a retention rate of 23.9%, followed by a drop to 3.7% after 30 days. Meanwhile, Android apps showed a retention rate of 21% and dropped to 2.61% 30 days later.

How to Improve Mobile App Retention Rate

If you want to reach the standards set by the above statistics, consider the following strategies to improve mobile app retention rates:

1. Implement a seamless and guided onboarding tour

You have one shot at making a great first impression, and you need to make it count. A seamless user onboarding is your chance to impress your users, show off the app’s best features, and make sure they feel confident in their choice.

The aim is to gently guide your new users to understand how to operate your app and potentially turn them into long-term users. Here are some steps on how you can do so:

Know your audience
Understand your app's users and their needs during onboarding. Adjust the process to match their preferences. Consider grouping users into different segments for more personalized experiences.

Get to the point quickly
Show the users the key benefits and features of your app quickly. If they see what makes your app valuable early on, they’re more likely to stay. Clearly explain the main features using spotlights and let users try them out to reduce confusion. All of this emphasizes the value of your app.

Keep it as simple as possible
The onboarding tour must offer a clear and intuitive path from installation to regular use. Provide straightforward instructions, tooltips, and guidance through in-app messaging to help users get comfortable with your app and promote repeat use.

Monitor the progress of your users
Use progress tracking, such as a progress bar, to improve the onboarding process. Let users follow their progress as they complete tasks or go through tutorials, motivating them to continue.

Provide useful walkthroughs and personalized in-app messages
Support the user onboarding tour with helpful walkthroughs and custom messages. Integrate them into the app experience naturally or create a resource center for users to access at any time.
Incorporate fun elements like stories and PiPs
Make the onboarding tour more enjoyable through visually appealing stories and picture-in-picture videos. These combine engaging and concise messages with images and videos to guide users through your app, introduce features, and encourage specific actions.

2. Personalize every user’s experience

Since there are millions of apps in the market competing for attention, you need to stand out. Personalization can help you capture and keep users' interest more effectively than generic, impersonal approaches.

With tools like Nudge, you can personalize each user’s experience based on their past behaviors and preferences. Right from the onboarding tour to in-app messages, walkthroughs, and rewards, you can tailor every aspect of your app to keep users engaged and around for a long time.

Offering personalized content from the start can make users feel valued and understood. This connection can potentially drive continued use.

3. Collect and analyze customer data

You need user data to personalize each customer’s experience. By analyzing this data, you can deliver an experience that meets people's expectations and keeps them engaged with your app.

This helps you understand different user groups, target your focus on key audiences, and decide which changes to prioritize.

Good data also gives you a clear picture of what's working and what's not. By collecting basic data like daily active users and churn rate and then looking deeper into this data by segment and time period, you can pinpoint challenges and assess how your changes are impacting retention over time.

4. Make use of more tailored in-app messages

Using more in-app messages can improve mobile app retention rates by providing timely and relevant information directly to users while they are using the app.

In fact, according to Upland’s Localytics software, brands using personalized in-app messages have user retention rates of 61% to 74% within 28 days of receiving the message. On the other hand, brands that use mostly generic campaigns only see retention rates of up to 49% within 28 days.

These messages can appear as banners, pop-ups, or interstitials, communicating useful tooltips, updates, or offers tailored to the user’s current behavior within the app.

In-app messages improve the user experience by making the app feel more user-friendly and valuable. They are also a great way to gather feedback at just the right moment, allowing you to collect insights for improvement and show users you care about their experience.

For effective in-app messages, use different styles depending on the message, keep them short and personalized, and include a clear call to action for each message.

5. Gamify your app with rewards and points

Gamification and rewards can significantly improve mobile app retention rates by making the experience more engaging and fun for users. By incorporating game elements, such as challenges, leaderboards, and rewards, you can keep users interested and motivated to continue using the app.

Challenges: Create tasks or challenges for users to complete and reward them with in-app perks. Setting time limits can encourage users to engage with tasks quickly.

Leaderboards: Display rankings based on user achievements, which can create a sense of competition and drive users to stay active in the app.

Rewards and badges: Offering points, virtual currency, or badges for completing tasks or achieving milestones can motivate users to return and spend more time in the app.

Loyalty programs: Integrating loyalty programs into the app can encourage frequent engagement by offering personalized rewards and incentives, fostering brand loyalty and commitment.

By making the app experience more interactive and rewarding, you can enhance user engagement, encourage repeat usage, and ultimately increase retention rates.

6. Feedback and in-app surveys

According to Survicate’s Mobile App Feedback Report, mobile surveys make collecting user feedback 8% more effective. Collecting feedback and conducting in-app surveys show users that you care about their opinions and want to enhance their experience.

Surveys allow you to ask users about their preferences, what they enjoy, and what changes they want to see. This helps you gather important insights to refine the user experience and align the app with user expectations, ultimately leading to increased user retention.

In-app polls are also useful for understanding what users like most, which can guide the development of new features and help personalize the app's user experience. Like surveys, polls show that you value user opinions and keep users engaged.

Using feedback from surveys and polls allows you to address user concerns and improve the app, which can boost retention and prevent user churn. When you implement changes that users want, you show that you are responsive to their needs.

Boost Your Mobile App Retention Rate with Nudge Today!

A higher retention rate is key for long-term success in the mobile app market. And Nudge can help you achieve that success.

Nudge provides a great set of tools to help product and marketing teams boost retention rates and create a loyal user base through improved user engagement, personalization, and user experience.

Features like onboarding tours, in-app messages, walkthroughs, and gamification enable you to offer personalized and contextual experiences that keep users engaged.

Nudge's tools can guide users through your app, showcase new features and updates, and reward user engagement, keeping your customers invested in your app for the long run. This combination creates a more satisfying app experience that encourages your users to come back for more.

So, what are you waiting for? Sign up for a demo today!