Blog What makes a good retention rate?

What makes a good retention rate?

When discussing industry benchmarks, it’s important to put a spotlight on app retention rates. Understanding why and how users are leaving apps over time is an important metric for us at Adjust. It’s also beneficial to uncover why some categories perform better than others. With this information you can find out what makes a good retention rate for each app vertical.

Marketers need to understand why users churn and uncover ways to keep them engaged with your app.

What are retention rates?

Retention rate is a metric that measures how many users continue to use an app after install. Retention rates are measured starting from the day after a user doesn’t return to the app. Essentially, this drop-off establishes your app’s churn, or the number of people who leave your app entirely.

Retention rates enable marketers to understand their app’s performance over time (per user). A consumer survey data showed that 49% of app users abandon an app after just one day. This is why retention rate benchmarks are an essential metric for mobile marketers.

A good retention rate indicates that users are satisfied with the user experience. Those users, who are staying active in your app for longer periods of time, are more likely to provide more engagements and monetize.

What is an average retention rate? How can it be compared to your app?

When analyzing your retention rate, you should look at how your user retention develops over a 30 day period. If you discover that retention significantly drops off at  certain points within that period, you should optimize to retain users beyond this date. If you have a gaming app and notice that users often churn at the end of the onboarding period, you have now identified a key area for improvement.

In our study below, we’ve taken a look at the median figures from all categories. We may point out (in some cases) when performance has been at its highest within a vertical, or period. Aside from these special cases we’ll look at the median figures, and what they could mean.

We’ll also compare significant days in a marketing period. That is, Day 1, 7, 21 and 30. We’ve separated Android and iOS, because we see that their performance often differs. Collating the two may not be so useful for developers who stick to a single platform.

What makes a good retention rate?

We averaged out the performance of all our verticals from January 2021 to give you the figures below. It might seem a little broad, but it can provide you with an idea of typical performance per day. See if your retention outperforms the figures below:

The Average Retention Rate

Day (out of 30) Android iOS
1 25% 27%
7 14% 16%
21 9% 11%
30 8% 10%

It’s interesting to note the 11% drop in retention by the end of the first week. Two weeks later, another 5% drift away from all apps. By day 30 the core audience of about 6% has stabilized.

This means, broadly speaking, that any percentage above this can be considered a good retention rate. If you’ve kept more than a third of users on the first day after install, you would actually have a very high-performing app. At least in terms of user retention.

In our wider dataset, we see apps in the Games category having 30% of users return on Day 1. Close to two half of those stick around by Day 7.. Anywhere between 35-60% rate of retention on Day 1 means you have a high performing app.

It’s important to note that there’s only a slight difference between retention averages for Android and iOS users. There may be a chance that your  own analysis reveals a disparity. This could be an issue with the functionality of your app on a particular device.

Retention rate breakdown: Per day and per vertical

In order to get a better idea of the averages, we’ll break down retention rates by days and per vertical.

Day 1 retention rates (average: 26%)

Day 1 typically sees the highest rate of retention before a huge drop-off on Day 2. In fact, a Localytics study shows that 21% of users only use an app once before they churn. Enjoying a high retention rate on Day 1 may be a good indicator of your app’s performance in the long run.

We saw social apps on Android achieve a retention rate of 26%. Other success stories include calorie tracking and dating apps. Very few apps retain less than a quarter of their users by Day 2. This is something to keep a note of when comparing these figures to your own success on Day 1.

Day 7 retention rates (average: 15%)

The first week after install is typically when advertisers start running retargeting campaigns. We often see a boost in the metrics at this point. This is because users are drawn back to the app in small but significant numbers through reengagement.

As on Day 1, social apps performed well on Android, with 15% of users retained. Additionally, calorie tracking apps on iOS saw great  user retention, with 29% returning on Day 7. Seasonality is another important factor when it comes to certain app verticals. January is a particularly strong month for self-improvement apps in the language learning and health & fitness sub-verticals.

The challenge here for marketers is to take advantage of the large influx of users during this time. You should optimize your retention campaigns to keep these users around throughout the coming months.

Day 21 retention rates (average: 10%)

Three weeks on from Day 1 and most apps now hit single figure rates of retention. Those that have kept upwards of a tenth of their users include music, weather and cryptocurrency apps.

Day 30 retention rates (average: 9%)

The final day in our dataset and, interestingly, little has changed from Day 21. This indicates that if a user is willing to stay for three weeks, they are long-term loyal customers. These users could potentially stay much longer than the 30 day period.

While some categories like Travel and Educational have kept less than 5% of all users, the average for 30 day retention is 9%.

Now that we have benchmarks, how can they improve? To ensure your app’s retention rates are the highest possible, here are some best practices every marketer should know.

How to increase retention: 5 best practices to improve your app’s retention rate

If you've taken a look at our overview and don't see a performance match, it may be worth reviewing our tips below on ways to improve retention. From onboarding to messaging, there are plenty of ways to keep users returning even weeks after install.

1. Individualization

It's not enough to follow a one-size-fits-all approach when it comes to retention. From location to user preferences, there are plenty of ways to craft unique experiences for different users to keep their attention on you. Segmenting your users can really help with this, and also make retargeting much more effective. You can learn more about segmentation, why it matters and how our Audience Builder changes the game, here.

2. Focus on messaging to re-engage your users

There are many means to re-engage users, bringing them back to your app. Optimizing your creatives to engage different types of app users can have an instant impact on your retention rate. You can also utilize the audience on your platform in your messaging. This includes sharing user stories to making competitive ranking tables.

3. Identify bottlenecks to offer a seamless user experience

There are pain points in almost every app experience. Pinpointing and finding ways to improve those moments where users leave, and never return, can help boost your retention rate. Whether it's refining app performance, or difficulty imbalances, it's important to find these retention obstacles and overhaul them. If a large number of users churn at the same point, your data analysis can reveal areas for improvement.

4. A/B test features to learn user preferences

A/B testing is the only sure-fire way of knowing whether your current efforts are the best method of achieving your aims. No matter how big or small, testing your latest features on different segments can work wonders. It’s crucial to figure out how successful you could be without alienating your audience (and lowering retention).

5. Prioritizing onboarding for a better user experience

As we've seen in numerous benchmark reports, the highest number of users leave between Day 0 and Day 1. Therefore acting during this time period is the best chance you have to keep them around. First impressions count, so make sure that your experience is incredible from the first interaction. Any less and the likelihood of churning is greater.

How many of your users should you expect to keep?

Retention changes a lot over time — If you can continuously keep your app above the averages, it usually means it’s doing quite well. However, retention is just one metric among many, and it’s what you want to make of it that matters, depending on what you want the experience of your app to be. That said, for most apps, it’s more than beneficial to keep your user base around, interested, and converting.

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