We know it’s not business as usual right now, and we’re here to help. Check out our latest COVID resources.
Preventing customer churn is a constant focus for app publishers, but the coronavirus crisis pulled the rug out from underneath us all. Between being at home and undergoing emotional stress, consumers’ engagement patterns have rapidly changed. And as teams across every industry shift to accommodate these changes, churn prevention has turned into the most important success metric — and one of the only metrics we can control in our changing macroeconomic reality.
Every company has a consumer behavioral model that helps them predict churn — especially if your industry is one where consumer switching costs are low (like QSR and retail). But modeling alone is not enough right now. After evaluating one million mobile consumers, Apptentive’s data shows that proactive mobile engagement can layer on top of your predictive churn model to uncover what’s working well so you can do more of it, and find areas for improvement to get you ahead of inevitable customer churn.
Even in the best of times, mobile customer retention isn’t great
However, retention doesn’t look very good for the average mobile app. According to research from Appsflyer, MixPanel, and Localytics, average 90-day retention for mobile apps across categories is somewhere between 20-30%, leaving lots of room for improvement.
Apptentive’s data tells a different story. In the second half of 2019, our customer base saw 43% of new consumers across apps stay active.
What triggers churn? It depends.
Retention and the triggers for consumer drop-off are incredibly category specific.
Looking at the Food and Drink app category in the chart below, we see an average of 60% of customers retained in the first quarter. By the end of the fifth period, we see retention fall to 37%. In this category, retention dropped slowly across each subsequent quarter, but dropped to a little over half of what we saw in the first quarter. For apps in the Shopping category, retention is higher than average between quarters three and four. This could be due to the holiday season where shopping peaks.
3 ways to minimize mobile customer churn
The 70% improvement in customer retention we see in this data set can be largely explained by three actions:
- Actively communicating with customers before they get a chance to churn decreases overall churn.
- Proactively caring about consumer experience provides a longer runway for brands to prove value and drive loyalty.
- Measuring and acting on “emotion data” allows brands to better understand customer sentiment and make changes accordingly.
One way to boost retention is to use the Love Dialog to help engage and interest your consumers. Across 2019, when consumers saw a Love Dialog in Q1 while using an app, they were 67% more likely to stay active through Q4.
- First, when you take the time to engage with customers in order to understand how they feel, it’s likely you will keep them around longer. Being proactive with your in-app communication, like engaging with consumers through a Love Dialog, is the first step in unlocking this potential.
- Second, it’s important to give consumers tools to act if they aren’t happy. If you give them a voice to say, “This part of my experience can be improved and here’s why,” they are more likely to stick around. Surveying customers is a great first step, but surveys only go so far. Setting up a two-way communication channel between your brand and your customers is the true gateway to retention success.
Now’s the time to focus on churn busting
In our post-coronavirus reality, brands have a unique opportunity to be there for their customers by listening to feedback, reducing churn along the way. It’s easy to feel defeated by growing churn as consumers engage with brands from home, but you can get ahead of it. Product leaders who embrace the shift in digital consumer behavior as an opportunity for positive change will set themselves apart in coming months. If your focus isn’t squarely on preventing customer churn right now, you’ve already lost valuable time. It’s not too late to reprioritize, but every day you wait, you’ll lose more ground — and more customers. If you’re ready to get started today, schedule a free demo and get your questions answered by our team of experts.
Editor’s note: We’d be remiss to not call out potential correlation rather than causation in the data above. The data is inherently biased as Apptentive’s best practices include making sure consumers have used an app for a period of time before engaging them in a Love Dialog, and the data in our 2020 Mobile Engagement Benchmark Report only includes Apptentive customers.