What makes a good retention rate?

James Haslam

Nov 18, 2016

App retention rates are a special focus for Adjust whenever we talk about benchmarks. Why users leave apps over time is a factor that we try and investigate when we talk about mobile benchmarking, and with the reams of data we receive, there's lots to look into. We also want to know why some categories perform better than others, and ultimately what makes a good retention rate. In this post we establish what a good benchmark is in light of our most recent report, and what it means.

What are retention rates?

As a primer for those who may not be in the know, a retention rate is a metric that measures how many users keep on using an app. If a user is using an app one day but doesn’t return on the next, then we track when that drop-off occurs, and map it to a ‘retention rate’. Essentially, it’s the figure that establishes your app’s churn, or the number of people who leave your app entirely.

How do we compare retention?

In this study we’ve taken the median figure from all categories. That means that we are looking at the middle figures from all. We may point out (in some cases) when performance has been at its highest within a vertical, or period, but apart 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, days 1, 7, 21 and 30. We’ve separated Android and iOS, because we see that their performance often differs, and collating the two may not be so useful for developers who stick to a single platform.

The figures we have presented here are taken from our latest benchmarks from Q3 of 2016.

What makes an average retention rate?

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

The Average Retention Rate

Day (out of 30) Android iOS
1 26% 26%
7 11% 12%
21 7% 7%
30 6% 6%

It’s interesting to note the 14-15 percent drop in retention from the first week to the second. Two weeks later, another 5 percent drift away from all apps, but by that point the core audience of about 6 percent has stabilized.

But, to go back to our main point, any retention above these is a good rate. That means if you have 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 retention. In our wider dataset, we see apps in Social see at least 50 percent of users return on day one, and half of those are there by day seven. This is the highest performing average in the upper quartile range. Anywhere between 35-60 percent rate retention on day one means you have a great app.

Can you break that down a little more?

Let’s go by day, and per vertical, to see just how retention rates throughout the period perform, in order get a better idea of the averages you’d want to reach ‘good retention’.

Day 1

Day one typically sees the highest rate of retention before a huge drop-off on day two. Reaching successful retention here is a good indication of how well your app might do in the long run. Publications apps on Android reach slightly above 41 percent of retention, the highest in the group. Other success stories include Social apps and also Games. Apart from Utilities, all other apps retain less than a quarter of users on day one, something to keep a note of when comparing your own day one success.

Day 7

The first week after install, and typically when advertisers run retargeting campaigns from advertisers. We often see a bump in the metrics at this point, as users are drawn back to the app in small but significant numbers through reengagement. As on day one, Publication apps rule on Android, with 24 percent of users retained; a figure as good as many other apps on day one. On the flipside, Educational apps have poor retention, with just six percent returning on day seven. This could be an effect of seasonality, as July moves to August people take a break from learning to pick up Summer fiction, magazines, and other leisurely reads. That said, Business apps still retain above 10 percent, and Utilities keeps users returning at the same kind of rate too.

Day 21

Three weeks on from day one and most apps now hit single figure rates of retention. Only Publications (16 percent) and Utilities (10 and 11 percent) have kept a tenth or more of their users. The rest of the group vary from between nine to three percent. The average across all categories is seven percent on this day.

Day 30

The final day in our dataset and, interestingly, little has changed from day 21. While some categories like Entertainment and Educational have kept less than five percent of all users, the general average for day 30 is about six percent.

Five ways to improve your 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 different experiences for different users which keep their attention on you. Segmenting your users can really help with this, and also make retargeting much more effective.
  2. Better messaging - whether in-app or from Push notifications, bettering your creatives to engage different types of app users can have an instant impact. Get clever, and utilize the audience on the platform in your messaging. From sharing user stories to making competitive ranking tables, there are many means to re-engage users, bringing them back to your app.
  3. Identifying bottlenecks - In almost every app experience users can find frustration, so finding those moments where users leave, and never return, can help and later optimize user experience. Whether it's speed improvement, imbalances in difficulty, or even spelling mistakes which could be letting you down, it's important to find those pain points and remove them.
  4. A/B Testing - Building on the optimization theme, A/B testing is the only surefire way of knowing that what you're trying to achieve works. Whether big or small, testing your latest features on different segments can work wonders in finding out how successful you might be without alienating your audience (and lowering retention) by releasing a new creation to the world.
  5. Prioritizing onboarding - As we've seen in numerous benchmark reports, the highest amount of users leave between day zero and day one. As such, it's the biggest chance you have to keep them. That, and first impressions count, so make sure that your experience is incredible from the first interaction new users have with your app. Any less and the likelihood of churning is made bigger.

How many of your users should you expect to keep?

Retention changes a lot over time. Keeping your app above the averages 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 much better to keep your user base around, interested, and converting.

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