Your 2018 Marketing Goal Should be Retention

In the past, the marketing funnel stopped at acquisition - whether it was measured as a download, email open, click or call. That was the Key Performance Indicator (KPI) that defined success for marketers. Now that the customer journey is much more dynamic and tech driven, the acquisition piece is not the only KPI that marketers are responsible for. Retention should be the new KPI that your campaigns and engagement strategies deliver on. Retention protects the investments you’ve made in acquisition.

We all know the staggering retention rates that most apps see 30, 60 and 90 days post-launch. A recent study reports that the average 30-day retention rate for DAUs (Daily Active Users) is 10%. That means that 90% of your users are already disengaged and have possibly churned. What’s even more alarming is that most apps see a 77% drop-off after the first three days.

This post will cover some common retention questions that might arise during your app marketing journey.

What is retention?

Retention is the measure of how many users return to use your app over a period of time.

Data shows that 80% of users stop using the average Android app just three days after downloading it. Your retained users are testament to your value. The fact that they keep coming back to your app signifies that the app provides true value to your audiences.

How is retention measured?

The simplest way to explain (and measure) retention is by calculating the percentage of customers you kept relative to the number of customers you had at the beginning of your tracking period. For example, if you started with 100 customers today (Day 0) and had 77 of those customer exactly seven days from now, your 7-day retention is 77%.

You can similarly track 30-day retention, 90-day retention or for that matter any “N-day” retention stat.

The question is, is this method of tracking retention effective for your app? It is if your app is Facebook or another social network that sets an expectation of daily interaction; however, the truth about retention is that there is no single retention tracking set up that fits all.

The good news is that there may be other, better ways of setting up retention tracking based on your app’s typical usage patterns. For example, you can set up flex N-day retentions to measure usage within custom defined periods of time. Alternatively, if you expect irregular usage patterns, you can set your retention tracking to N-day + any day after that.

How do I determine the best method to track my app’s retention rates?

Every experience will and should have a unique definition for retention that makes sense for the experience expectations. For example - a high transaction app, like Starbucks’, would define retention based on DAUs. However, a higher-price point transaction-based app could define retention based on MAUs (Monthly Active Users). It is also good to measure the industry standards so that you can see how your app compares, but they shouldn’t be your only source of indicators.

You’ll need to determine your average product usage intervals and define your critical event before you can determine the best type of retention tracking method to set up for your specific app.

When should I start thinking about retention?

While most of your retention effort occurs post-launch, it’s never too early to start thinking about retention. You should build an engagement and retention strategy right into the first release of your app. That way you will have a mechanism to re-engage users as they lapse (vs. rushing to find last minute methods to plug a leaky bucket).

Your very first retention strategy will always need optimization, but even starting out with a basic plan should give you a leg up on the competition. If you don’t bake a basic retention strategy into you first release, there is a good chance your app will turn into a leaky bucket that will need emergency attention.

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