Blog What makes a good app retention rate?

What makes a good app retention rate?

Introduction

When discussing mobile industry benchmarks, it’s important to put a spotlight on app retention rates. This metric allows app marketers to better understand why and how users leave their app. As some categories perform better than others, it’s important to learn a good user retention rate for your app vertical. From your user retention rate, you’ll be able to further investigate user churn and uncover ways to keep users engaged with your app.

What are retention rates?

The retention rate measures how many users continue to use an app after install over a specific period of time.

Retention rates enable marketers to understand their app’s performance over time. A good retention rate is a key indicator that users are satisfied with the user experience. The users who stay active in your app for extended periods are more likely to provide higher engagements and ultimately monetize. This is why retention rate benchmarks are an essential metric for mobile marketers.

What is an average app retention rate?

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

When discussing app retention rates, “day” is defined as a “period of 24 hours”. This means that two timestamps of when a user opens an app can be compared to determine if more than 24 hours have passed between them.

What is a good retention rate?

We averaged the performance of all our verticals from Q1 of 2022 to give you the figures below. While broad, it can provide 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% 28%
7 11% 13%
21 7% 8%
30 6% 7%

It’s interesting to note the 14% drop (for Android) and 15% drop (for iOS) in retention by the end of the first week. Two weeks later, another 4-5% drift away from all apps. The 30-day retention rate stabilizes at about 6%.

Broadly speaking, any percentage above this can be considered a good retention rate. If you keep more than a third of users on the first day after install, you would actually have a very high-performing app.

In our wider dataset, we see apps in the Games category having 28% of users return on Day 1. Around 42% of these stick around by Day 7. Anywhere between 35-60% rate of retention on Day 1 indicates a high retention rate.

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. In this instance, there 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%)

Enjoying a high retention rate on Day 1 may be a good indicator of your app’s performance in the long run. Just remember that Day 1 typically sees the highest rate of retention before a huge drop-off on Day 2. In fact, the average app loses 77% of its daily active users in the first three days after install.

We saw social apps achieve a retention rate on Day 1 of 32% and then drop to 26% on Day 2, still a great retention rate. Other success stories include calorie tracking and dating apps. However, very few apps retain less than a quarter of their users by Day 2, which is something to note when comparing these figures to your own Day 1 percentage.

Day 7 retention rates (average: 12%)

Usually, the first week after install 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 re-engagement.

Social apps performed well on Android, with 17% of users retained on Day 7. Additionally, calorie tracking apps on iOS saw great user retention on Day 7, with 18%.

Day 21 retention rates (average: 7%)

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

Day 30 retention rates (average: 6%)

The final day in our dataset, and 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 Education have kept less than 4% of all users, the average for 30-day retention is 6%.

The best retention rates around

We’ve looked at the numbers and tabulated the results across 10 verticals, comparing 2021 median/Q2 results to find our top three performers.

  1. Social on Android and iOS has the unique distinction of having the highest consistent retention out of all categories appearing and alternating in the top two on Day 1, 7, and 30.
  2. Finance & Business on iOS reaches the second-highest retention of apps on Day 7, and takes the top-ranking spot on Day 30. It’s only one of two to feature twice in the top three.
  3. Games for iOS dominate retention rates, taking the number one slot on Day 1, and Day 7, and is listed in Day 30’s top two.

Moreover, in general, Games are remarkably smooth compared to categories like Travel. This signifies re-engagement campaigns aren’t clustered and are likely on-going, day-to-day, and multi-channel.

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.

5 best practices to improve mobile app retention rates

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, here are several suggestions to keep users returning even weeks after install.

1. Individualization

From location to user preferences, there are myriad ways to craft unique experiences for different users to retain their attention. Segmenting your users can help you strategically group your users and follow their specific customer journeys. This also makes retargeting much more effective. Learn more about how our Audience Builder changes the segmentation game to help you increase your top-line revenue.

2. Focus on re-engagement messaging

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 by sharing user stories or making competitive ranking tables.

3. Identify bottlenecks for a seamless user experience

There are pain points in almost every app experience. Pinpointing and finding ways to improve those moments where users leave can help boost your retention rate. It’s essential to find these retention obstacles and overhaul them. If a large number of users churn at the same point, your data analysis is revealing a key area for improvement.

4. A/B test features to learn user preferences

When introducing a new feature, A/B testing is a great way to understand if the new feature will be embraced by your users or perhaps cause them to churn. Testing your latest feature on different segments can reveal what aspects of the feature or messaging around it need to be reworked before you roll it out to all users.

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. Consider intuitive messaging or instructions that not only demonstrate to users how to use your app but also show the benefits they receive from using it.

Learn why retention is more important than ever in the iOS14.5+ era here, or snag 10 new ways to increase app retention. However, if you’re ready to get a comprehensive mobile analytics platform to elevate your marketing insights, let’s talk.

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