Retention Rate | Meaning
What is a retention rate?
A retention rate gives a number to the percentage of users who still use an app a certain number of days after install. It is calculated by counting unique users that trigger at least one session in one day, then dividing this by total installs within a given cohort.
Why are retention rates important?
Retention rates help you understand how well your app is performing over time, per user. Generally speaking, a higher retention rate is better overall because users who stay active for longer provide more engagement, as well as greater monetization opportunities.
Retention rates are also useful for understanding why many users disengage from apps, and where you stand in the grander scheme of app performance. This can help pinpoint what you can improve and how to extend your users’ lifetime value (LTV).
With your analysis, you could look at how retention develops in your app over a 30-day period. If retention drops at a certain point, a goal may be to increase the number of users who are interested and engaged enough to retain past that date. In gaming, this is often the end of the onboarding period. In verticals like e-commerce, you could find out when purchases occur and optimize for that point in time.
Retention rates give you a potential insight into the longevity of your app. It’s also important to note that benchmarks for retention rates will change depending on app vertical. For example, users may install a travel app before their flight, use the boarding pass and then uninstall once their journey is complete. In this case, a lower retention rate after Day 7 wouldn’t be a cause for concern because it’s common behavior for that vertical.
How can I improve my app’s retention rate?
There are a number of ways to improve retention rates, such as:
1. Always consider ways to individualize your UX
A one-size-fits-all approach isn’t enough. There are plenty of ways to craft unique user experiences that will keep their attention. Segmenting users is a great way to achieve this and increase the effects of your retargeting campaigns.
2. Fine-tune your messaging
From in-app campaigns to push notifications, your creative is a powerful tool that can make a huge difference when retaining users. For example, depending on your vertical, you may want to consider leveraging user stories to bring others back to your app.
3. Identify bottlenecks
Almost every app has its moments of frustration. Locating these can help you offer a greater user experience than your competitors. For example, it could be that your gaming app has a few difficulty imbalances, or needs to be faster when loading new levels.
4. A/B test your product
As you may already be aware, this is a surefire way to discover what works for your audience. A/B testing new features gives you the insight you need without alienating your audience and consequently lowering retention.
5. Prioritize onboarding
For many verticals, Day 1 is the best chance you have to stretch a user’s lifetime value (LTV). Make sure your users are able to make full use of your app by optimizing the onboarding experience from the point of install.
Retention rates and Adjust
The retention rate is a vital part of Adjust’s comprehensive cohort analysis. Retention rates give you a firm idea of user activity on your app, and allows you to check and compare recent user activity and long-term development by switching views. These views include days, weeks or months after install. For more on the capabilities of our cohorts, take a look here.
To gain greater insight into user retention, you can also take a look at our guide to the topic here. The ebook shares essential practices that include why you should drive retention alongside new user acquisition, key tactics for paid app retention and how to leverage your data to lift your app’s ROI.