Recent marketplace fluctuations required brands to get creative in their app mobile engagement strategies. While companies took varied approaches to improving app retention, one theme is clear: Most mobile teams’ focus has shifted to retention over acquisition.
Retaining customers tends to cost less than acquiring new ones and offers additional benefits through improving overall lifetime value. App retention can also be used as a trust signal around how well your brand knows its customers. As you act on your 2021 app retention strategy, here are the app retention benchmarks to aim for.
App Retention in 2021
Retention is a primary focus in Alchemer Mobile (formerly Apptentive)’s 2021 Mobile App Engagement Report, a study of 1,000 apps across a billion+ app installs.
How brands define “successful” retention is extremely dependent on the length of time measured. Many mobile teams focus on short-term, 30-day retention as their primary success metric. Fewer focus on 90-day retention, and very few prioritize annual retention. However, you need to look at all three metrics—especially the longer term—in order to understand how retention impacts customer sentiment and your product roadmap.
For 2021, here are the three primary app retention benchmarks to aim for.
Below is the month-over-month view of consumer retention in 2020 for all apps included in the study.
Why the discrepancy in length of time in which retention is measured? First, app retention expectations have historically been set low. Many brands think about churn and retention in 30-day increments because it’s industry standard, even though focusing short-term retention doesn’t tell a complete customer journey story. Second, tying in-app consumer emotions and actions to retention can be complicated. The further out you look, the more in-app actions must be evaluated to tell the complete story around why customers either stuck around or left.
Brands that take a holistic approach to retention—and typically have high retention rates—focus both on the short and long term. For some teams, taking this approach may require reevaluating their current retention philosophy (e.g. setting higher short-term retention goals, tracking retention over a longer period of time, etc.).
But reevaluating retention doesn’t mean you need to reinvent the wheel—especially when you have marketplace benchmarks to help gauge your success. Let’s take a closer look at each length in time to understand what drove both success and failure.
Retention is the number of consumers who continue to use your app over a period of time—in this case, the first 30 days. Looking at the first 30 days of a consumer’s experience is the industry standard for measuring mobile app retention. In 2020, the average app saw 66% 30-day consumer retention.
While short-term retention is important to keep track of, a deeper understanding of consumer sentiment and why people stay or leave can only be gained through looking at long-term retention.
Looking at 90-day retention gives a more holistic view of success than focusing on the first 30 days. However, 90-day retention isn’t great for the average mobile app. According to research from Appsflyer and MixPanel, average 90-day retention for mobile apps across categories is somewhere between 20-30%.
Alchemer Mobile (formerly Apptentive)’s data shows a different pattern based on brands who were proactive rather than leaving retention to chance. In 2020, mobile teams who proactively engaged with consumers saw their 90-day retention results increase to 48%—double the industry average.
Understanding shifts in consumer emotion through proactive engagement is the future of digital transformation, and 48% 90-day retention is the benchmark for mobile teams to aim for in 2021.
Let’s focus on annual retention, an app metric that is generally not reported on due to the acceptance of regular, high consumer churn. Across all apps, 35% of consumers who used the app in January were seen in December.
Getting in front of consumers early in the year boosted retention even higher. If the consumers saw an interaction in January, 50% were still seen in December—an improvement of 43%. Because interactions are based on regular cadences, this data tells that 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.
Retention by App Category
Retention varied quite dramatically between categories. This was true for both 90-day and annual retention rates, give or take a spot.
Education apps saw the worst 90-day and annual retention rates in the marketplace, while Media saw the best. Travel and Healthcare saw low retention numbers in 2020, which is not surprising given the reduction and changes within the industries during the year. Shopping set a good example of embracing the mobile shift as they managed to maintain quite healthy retention despite having periods of being shut down during the year.
One specific call out is the year-over-year change in retention for Media apps. Not only did apps in Media enjoy the highest 90-day retention of any category, they saw a 58% increase from this same statistic in 2019 (38%). This massive increase can be partially attributed to an almost daily “breaking news” cycle throughout the year, but News apps only make up a fraction of apps in the Media category, which also includes Games, Sports, Music, Technology, and Telco. The biggest reason Media apps had such high retention in 2020 was that they spent time listening to and acting on consumer feedback through proactive engagement, engaging at the right time and place within the app, and acting on what they learned.
Four Steps to Improve App Retention
Despite a year like no other, many apps across categories enjoyed incredible retention rates. These huge mobile consumer retention gains can be explained by four 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.
- Giving customers a voice in deciding what goes on a brand’s product roadmap helps resource-stretched teams build features that both drive business goals and keep customers happy.
- Measuring and acting on emotion data allows brands to better understand customer sentiment and make changes accordingly.
To learn more about marketplace retention rates as well as retention by app category, read Alchemer Mobile (formerly Apptentive)’s 2021 Mobile App Engagement Report.