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2020 Mobile App Engagement Benchmark Report

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Thanks for reaching out! While you wait for confirmation from an Apptentive team member, you may find these free resources to be of interest:

Guide

View resource

Guide

The Five Stages of Reducing Mobile Customer Churn

Retention is a top priority for mobile marketers. Our new five-step framework is here to help you improve your existing strategy.

Download Now

Guide

View resource

Guide

2020 Mobile App Engagement Benchmark Report

Apptentive’s annual mobile app engagement benchmark report serves as a baseline to help app publishers across categories understand their app’s engagement strengths and areas for improvement.

Download Now

Loyalty & Retention

Cutting Costs with Retention Marketing

Alex Walz  //  December 9, 2014  //  5 min read

What Continued Increases in Mobile Acquisition Costs Mean for Developers

Customer acquisition may seem like an easy task. After all, the growth of the mobile market is only accelerating and the mobile internet is predicted to be in the hands of half the world’s population by 2020.

If you build it, they will come… Right?

Not anymore. An increased number of smartphone holders worldwide and an increased demand for apps have created an extremely competitive marketplace where customers almost always have several strong options when it comes to finding that perfect app.

As customers increasingly shop around in the app stores and evaluate their options, mobile publishers are hit with dwindling customer retention rates. According to our own research, only 40 percent of customers continue to use an app they downloaded a month ago – and this number plummets to 4 percent over the course of the first year in the customer journey.

The Need for Retention Marketing

The cost of acquiring a loyal mobile customer (defined here as someone who opens your mobile app at least 3 times) is therefore at an all-time high. According to Fiksu’s Cost Per Loyal User (CPLU) Index, the average CPLU increased 34 percent from September 2013 to September 2014.

Between August 2014 and September 2014 alone, the base CPLU rose from $1.86 to $2.25. This 21 percent spike corresponds directly with the unveiling of the Apple iPhone 6 and iOS8. Both of these events led to an increase in demand for mobile devices and apps and a subsequent increase in competition among mobile app publishers vying for attention in an increasingly crowded market place.

Cost Per Loyal User, 2012-2014

As acquisition costs continue to rise, mobile customer retention becomes more important than ever. If done right, mobile retention campaigns can lessen the burden of the much-costlier new customer acquisitions while still allowing you to hit those monthly revenue and active customer goals.

We’ve put together a few, low-cost strategies to boost customer retention and loyalty – in turn, fueling sales, higher ratings, and organic growth through word-of-mouth and customer delight.

Our Top 5 Retention Marketing Strategies:

1. Give Your Customers a Voice

Before you can hope to delight, or even retain, your mobile customers, you must open up a two-way conversation where their voices can be heard. App developers constantly strive to create that perfect customer experience, but many lack the tools to evaluate whether or not their assumptions of customer opinion are really on mark.

Sure, there are the ratings on the app stores that can be used to guide future updates, but these are indicative of only a small fraction of your mobile customers – namely, the vocal minorities who either love or hate your app.

But what about the less vocal majority, those with opinions somewhere between those two extremes? This is a group that likely won’t make the journey to the app store ratings page unless they’re truly delighted or peeved. They constitute the bulk of your audience, yet their voices remain largely unheard across the much of today’s app market place.

To fill this void, developers are bringing customer service to the mobile channel – incorporating two-way chat capabilities between customers and publishers and prompting in-app surveys to gauge opinion throughout every step of the customer journey. In addition to allowing them to preemptively address customer issues before they surface publicly as a negative rating, these interactions provide developers with a wealth of data that they can use to shape future updates and delight their audiences.

2. Use smart, well-timed push messaging and in-app surveys

Opening up customer communication is just the first step in improving retention. Next, it’s time to actively ask for and respond to that communication.

We recommend our customers look for ways to reach out and solicit feedback during key events throughout the customer journey – such as the third time a customer logs in, or the first time someone shares content via the app. Once these events have been triggered, don’t wait for the customer to search through your menu navigation to tell you what they think. Instead, prompt a brief, non-disruptive conversation to gauge customer opinion at the broadest sense before diving into more specific sentiments in the event that the customer wishes to continue the conversation. (For more tips on asking for customer feedback, check out our 5 Tips for Writing Effective Mobile Surveys.)

3. Let your customers know they’re valued

The surest way to delight customers is to let them know that they are valued – and that means giving thanks and showing appreciation. If customers commonly make a similar request, consider shifting your development schedule to prioritize that need. Likewise, on releasing your next update, give a shoutout to your customers for contributing to a new feature release and remind them that you’re building a customer-first experience where their voices are not only listened to, but highly valued.

4. Regularly refresh your app with rich content updates

It’s no mystery that creating valuable is key to delighting mobile customers. If customers see new and interesting content each time they open the app, they are likelier to spend more time in your app consuming that content and return to your app frequently to see what’s new.

To really wow your mobile customers, align your content strategy with your customer data provides additional opportunities. For example, use your in-app prompts to suggest relevant content based on your customer communications or reward your returning customers by offering them exclusive discounts or deals out of appreciation for their loyalty.

5. Understand your app’s customer retention rates

And finally, it’s important to know your numbers – how to calculate retention rates and the revenue generated by each loyal customer. Of course, each app will have different retention and average revenue per user goals and benchmarks, but being able to calculate these metrics will allow you to internally compare both your marketing effectiveness over time and the ROIs of your retention and acquisition strategies to determine what makes the most sense for your business.

Calculating Your Mobile App Revenue

We’ve released a few guides to dive further into this concept and help demonstrate the importance of mobile customer retention:

Have a favorite retention marketing tip we missed? Pass on the knowledge by sharing it in the comments section or tweeting us @Apptentive!

About Alex Walz

Apptentive's resident wordsmith, Alex can frequently be found cranking away at eBooks or scrawling down ideas late into the night from a local coffee shop. He's an avid traveler, coffee connoisseur, and tech enthusiast, and he shares his thoughts on each over Twitter.
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