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Retention: Chapter 5 of The Math of the App Business

Engage, listen and keep more customers

As the good folks at Flurry have pointed out, the retention problem facing most app developers is a much bigger issue than the discovery problem. Winning a download is excellent, but for every 100 downloads today, only 4 of those consumers will still be using your app a year from now. The drop off is exceptionally steep, with more than 60% of the initial customers giving up on the app in the first month.

There are several important steps to take in thinking about the retention equation. The first is that you need to measure it. We highly recommend instituting some form of metrics and management in your app, whether it’s using Google Analytics, Flurry, Kontagent or building your own analytics, you can quickly understand at an aggregate level what’s going on after someone installs your app.

Measurement is a core step to take in the process, but measuring doesn’t actually impact the retention equation. In order to impact the equation, you need to be focused on updating and refining your app on a regular basis. As you learn about how people are using your app, what they expect from it and what they’d like to see in order to improve it, you have to listen to the feedback and iterate on your product.

Updates: a core retention activity

We’re seeing developers who are active about modifying and updating their apps be more successful on a regular basis. This is because the updates mechanism creates an opportunity to re-engage with customers who might have forgotten about your app or who gave up on it. Each update serves as a reminder of your existence.

Additionally, regularly updating your app communicates to your app customers that you are regularly investing in their experience. You don’t want to go over board with updates (we’ve seen apps trying to update every few days or every week) because the take rate on your app updates does send signals to the app stores about your activity. You want to find the balance between your app seeming like it’s dead and updating so aggressively that very few people have the most recent version.

Creating a customer database for regular outreach

The most challenging part of the app stores is that the relationship with customers is by default theirs, instead of yours. You can change this, however – by having optional or required logins in your app, it’s possible to create a database of your app customers. We recommend making the logins optional and working to provide clear benefits to your customers for logging in – like saved progress, personalization and activity streams that are specific to app activities.

The login system you create should give benefits to your app’s customers, first. However, in creating a reason to login, you can get the benefit of knowing more about your app’s customers, including a way to contact them, like an e-mail address. Once you’ve created a customer database, you can utilize the database in order to connect with your customers on a regular basis, engaging them on a regular basis to tell them about updates to the app, tell them about other apps in your portfolio and share news and information. Because many app customers stop using your app in the first month, creating an external channel to communicate with your app customers gives you a powerful re-engagement channel. Simply reminding them of your presence can lead to a significant increase in the retention rate. More than that, however, a regular communication with your app customers about new features and examples of how people are using your app is enough to dramatically change your retention patterns.

The helpful waiter leads to repeat business

Proactive in-app communications, whether they’re tutorial-like in nature or the answering of customer inquiries change the nature of the customer’s interaction with your app. Instead of just interacting with software, the app customer is interacting with a real person. At Apptentive, we sometimes refer to this as the “helpful waiter” approach – when you’re at a restaurant and your waiter is attentive and checks in with you occasionally, you feel good about the level of care taken by the business. Similarly, a proactive approach towards asking the consumer about their experience produces a similar outcome, which encourages the consumer to use your app more often due to the establishment of an emotional connection.

Continue to Chapter 6 — Monetize: Research and Personalize

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