As user acquisition costs rise, marketers look beyond the acquisition to post-install activities in order to get more mileage and more money out of the users who offer value. App retention rate provides the foundation for metrics like LTV, and ARPU, which tells a marketer how long users stay loyal to their apps over time. We kick off this regular series with a look at retention rates for apps in the U.S., a mature and thriving market that yields valuable clues to how retention could look in the future (and should be for your app).
Overall, U.S. users are highly loyal to their favorite apps. According to findings in both the Adjust 2018 Mobile Benchmarks Report, and the 2019 Adjust Global App Trends report, America is home to users with the second-highest retention rate of all countries (in the report sample). This underlines the abilities of app marketers in the U.S. who have mastered communicating their value proposition, and the understanding app users have over what they like, and what they don’t.
Entertainment apps are the crowd-pleasers
But what about verticals? Drawing on data from the top 1,000 most active apps (the highest number of sessions per week in Adjust’s platform) within the first six months of 2019. Entertainment apps see the highest rates. This is driven by the massive uptake in Music and Video streaming platforms, which number as some of the most addictive forms of entertainment. Take Spotify — the music service has 232 million monthly active users as of Q2 2019, according to Statista. On average, these users spend over 32 hours per week listening to music — or 4.5 hours per day. This behavior pattern naturally leads to healthy retention rates.
Entertainment apps keep users coming back. From Day 1 to Day 30 after install, Entertainment app rates drop from 36% to 18%. In comparison, Educational apps retain 37% of users on Day 1, but by Day 30 only have 8%. Gaming, another vertical that experiences heavy losses, shifts 73% of its user base overall.
One tip to improve retention rates
To improve long-tail retention, you need to focus on first impressions. As Andreessen Horowitz partner and investor Andrew Chen writes, “the best way to bend the retention curve is to target the first few days of usage, and in particular the first visit.” You can drive initial user investment by automatically populating suggested contacts, for example, or by pushing users to fulfill a simple activity. These steps help create early engagement. From there, your app needs to be habit-forming without being too annoying about it. This is a real challenge, especially for Education apps, who often gain users who are on a sudden self-improvement kick, but who go back to old ways of behaving.