User retention in mobile apps: how to measure and increase app retention

The goal of every mobile app developer or marketer is to see more users engage with their app as often as possible. That’s app user retention and it’s a sign that the product is indeed useful and solves a problem.

Measuring your app user retention would mean tracking the number of user logins, how often they do so, their behaviour in your app, and what features they use. 

When done correctly, these measurements allow you to identify ways to increase retention through future feature updates. If you’re still working on how to acquire users in the first place, be sure to check out our user acquisition guide. It’s the perfect lead-in to what you’ll learn about retention here.

What is user retention in mobile applications?

User retention in mobile apps is the unique number of people who open and use an app at least once within a specific period (days/weeks) after download. 

It is also the number of users who launched the app for the first time on a specific date since it was installed. 

You can measure user retention rate as often as you need, but it's mostly done on day 1, day 7, or day 30 after download.

What is the difference between user acquisition and retention?

For you to consider retaining users, you must first get them to download and install your app. User acquisition (UA) is how to get downloads, while retention is how to keep users active. Both require completely different strategies, despite being components of the same overall growth strategy. 

The best way to think of user acquisition is short-term gains. Consequently, no matter how quickly you get downloads, it doesn’t contribute to your app’s success unless users are retained. On the flip side, retention is long-term and measures how valuable your app is to the users.

How long is user retention in mobile apps

The typical mobile app retention period for marketers is 30 days, but this can differ, with some tracking the first 7 days or even 1 day. A longer-term retention rate of 90 days can also apply if you are tracking quarterly.

Current global retention benchmarks suggest a 26% fall on day 1, followed by 13% on the 7th day and 10% by the two-week mark. 

Retention rate further settles at 7% after 30 days. The most important thing to consider is that many factors, including app category and user experience, determine how sticky your app becomes.

What factors influence user retention in apps?

We’ve mentioned app category and user experience as some examples of factors that influence user retention. These are two of many, but we’ll focus on the most important factors, like:

1. The industry your app is in
2. The platform your app is on
3. The average user engagement in your app
4. The app's value and experience

Now let’s explain each one and what impact they have:

The industry your app is in

Retention varies by sector, especially because some may not require a user’s attention as often as others. An investment app, for instance, may only require users to log in at the end of each month when salaries have been paid and a portion needs to be invested. That means such an app, and similar ones like digital banking apps, might have higher 30-day retention (around 11.6%). 

Gaming apps, on the other hand, are for entertainment and require as many frequent logins as possible. In this category, users have thousands of options to choose from and can easily get bored if yours isn’t engaging enough. This struggle for players’ limited attention span and thirst for more engaging UX is why gaming apps record a lower 30-day retention of around 2.3%.

The news sector has the highest Day 1 retention rates, with iOS coming in first at 35.88%. At the same time, action games have the lowest retention rates on Android but among the greatest on iOS.

Once you understand where your industry stands on this scale, you can set a realistic retention rate benchmark during that growth planning phase.

The platform your app is on

iOS users tend to have slightly higher retention rates compared to Android users for the same application. Generally, paid apps cost iOS users slightly more than they cost Android users. That high spend is one reason why users may want to utilise the app’s full potential to get back their money’s worth.

There’s also the factor of loyalty to the Apple brand that no single Android company has managed to surpass. That loyalty has extended from love for the Apple ecosystem to a higher retention rate for apps tailored for iOS and macOS.  The only exception is telecommunication apps, where Android users record higher retention rates.

Many marketers use a combination of the Apple App Store and Google Play Store for app hosting, as each platform has its unique benefits. 

The average user engagement in your app

Users who engage with an app weekly have a much higher likelihood of becoming long-term users. However, that’s only possible if the user journey through your app is smooth so that your users can actively interact with features.

Things like well-thought-out UI/UX, simple in-app guides to help with navigation, and pop-ups for special offers or handy features make apps more engaging and easier to use. They’ll have no reason to search for alternatives or dump the product altogether. 

The app's value and experience

Users are more likely to stick with apps that demonstrate clear value and provide an exceptional user experience. If your app doesn’t ease a specific process, solve a problem, or make life easier for the user, the churn rate increases. Think of it as an exchange of perceived value for time, where you create the value and ensure it is accessible and good enough to exchange for the user’s activity.

How to measure app user retention using cohort analysis

Cohort analysis means grouping your users based on shared characteristics. These would ideally be download and sign-up dates. Grouping users in this cohort makes it easier for you to identify behaviour patterns and track their retention rates. 

Follow these steps to measure user retention using cohort analysis:

1. Define the terms

• Active User: Who would you consider an active user of your app? This must be tied to specific actions, like maybe completing a task, making a purchase, sending an email, or any other core engagement action.
• Time Period: Choose a specific timeframe for your analysis. This could be one day, seven days, 30 days, or even 90 days. You’ll then use this number to group users into "cohorts".

2. Use the Retention Rate Formula

To measure app user retention rate with cohort analysis, you’ll need to use the formula Retention Rate = (Ending Active Users - New Users) / Starting Active Users x 100%. 

3. Calculate with Cohort Analysis

Now start a cohort following these 5 steps:

• Step 1: Choose a group of users who downloaded and installed your app during a specific time. For example, if you have a travel app, you can start on July 1, when summer peaks. 
• Step 2: Identify starting users by counting those who were active at the start of July. This could be the first 1000 users who installed the app on that day. 
• Step 3: Identify returning users at the end of the period, which could be 30 days later or maybe the end of September (90 days) when summer ends. Count how many of those original 1,000 users are still active.
• Step 4: Use the formula: Retention = (700 active users / 1000 initial users) x 100% = 70%. If this seems too complex, consider using a simpler calculation with monthly installs: Retention Rate = # of Monthly Active Users / # of Monthly Installs. For example, if you had 1000 active users last month and 500 new installs, your retention rate would be 1000/500 = 200%.
• Step 5. Use analytics platforms like Google Analytics and Blockchain Analytics to track user behaviour and automate calculations and reporting.

What are good user retention rates for mobile apps?

Good user retention rates for mobile apps depend largely on your industry. Using apps hosted on the Apple App Store as an example, benchmarks for shopping, finance, and gaming are 4%, 3.1%, and 1.7%, respectively.

Our article on user retention benchmarks can help you better understand your industry's benchmark before you start tracking UR. That way, if you need to increase user retention, you can easily tell from the numbers.

When is an app retention rate too low?

An app retention rate may be considered low if it falls below the industry benchmark for day-one retention. That’s often less than 20% of the ideal benchmark. If you notice such a small number, you’ll need to calculate your churn rate.

A high churn rate suggests that users aren't finding value or engagement. This could be caused by problems with the value proposition, user experience, or onboarding. The next steps would be to check where and why users fall off, then make fixes towards achieving the average app retention rate for your market.

How to increase user retention on mobile apps 

App retention metrics are flexible, so you can do a few things to boost them and get more loyal users. Once you have analysed the reasons and factors contributing to churn, consider the following:

1. Improve the onboarding process

2. Personalize the user journey

3. Drive engagement and loyalty

4. Engage users in-app

5. Offer seamless support and gather feedback

Improve the onboarding process

Improving an app's onboarding process keeps users by quickly showing them how valuable it is. Elements like pop-up messages or simple arrows can guide them through the next practical steps if they become stuck.

Done right, you’ll successfully prevent confusion and user loss as you guide new users to the app's most important features. These simple tweaks create a good first experience that encourages users to stay engaged and loyal.

Personalize the user journey

Personalisation keeps people using an app longer because it makes it more useful and important for each user. Businesses that do this are able to build a stronger connection and more engagement. The idea here is to customise content, suggestions, and contact information based on user data and behaviour. This makes it easier and faster for users to find what they need, which makes them more likely to keep using the app.

Drive engagement and loyalty

Give users something fun to do or look forward to as a way of promoting engagement and loyalty. It can be games or rewards for dedicated participants to help them feel connected to the app and what it has to offer. Studies show that people feel valued and like they belong when they use loyalty programs and customised experiences. We covered more app user engagement tactics in a separate guide.

Engage users in-app

Users are more likely to stay with an app if it builds habits, fosters loyalty, and offers ongoing value. This leads to more regular and longer-term use. Communicate with users via in-app chat, give them options for self-help, and throw in some regular activities to help them feel more connected.

Offer seamless support and gather feedback

Dealing with user problems quickly and providing seamless help and feedback increases app retention. Your users will feel valued and understood, leading to higher satisfaction and loyalty.

24/7 Active support and responses to comments help enhance the user experience and product offerings. This also makes the app more in line with changing customer needs and lowers the chance that users will delete it out of frustration.

Final thoughts on maintaining a good app retention rate

If you put users first in your planning to development phase, recording a high mobile app retention rate will be 50% easier. You'll get things like personalisation, easy onboarding, and helpful support right from the very beginning. Still, it's never too late to create app retention strategies if you notice that users are falling off quicker than you onboard them. The tips we’ve shared here should help you keep your app users coming back so that you can achieve your revenue goal. But before you retain, you first have to acquire—and doing that efficiently is where guides like our user acquisition playbook or tools like Blockchain-Ads come in.