The Bar Has Been Raised for Apps to Engage and Retain Their Users

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It’s no secret that once a user finds an app she loves, she’ll use it over and over again, becoming one of your most engaged, and therefore most valuable, users. That same user needs to see the value of your app immediately in order to keep her coming back for more. This isn’t new information, but what is new is the drastic changes we saw in these behaviors in the last quarter of 2014.

Q4 is marked by a higher than average volume of new devices entering the market with the release of new iPhone and iPad models and an increase in holiday deals

New devices bring new users, who are discovering and testing many apps to find the ones that bring them the most value. New devices also bring existing users who are upgrading their devices. These users take the opportunity to evaluate which apps are most helpful and then decide which ones to transfer.

This environment is ripe for both engaged users and a high level of churn, and that’s exactly what we saw happen in Q4 of 2014:   

  • The percentage of engaged app users – those who use the same app 10+ times in a month – soared from 25 percent in Q3 to an all-time high of 30 percent in December 2014
  • But user retention – the percentage of users returning to an app within a three-month window – declined, ending the year at 12 percent.
  • Meanwhile the role of apps in people’s day-to-day lives continues to grow - apps are opened more than 10 times per month in Q4. By comparison, the average number of app launches per month recorded in early 2013 was 8.6 and in 2012 was 7. 

A note about the data: every quarter we publish two Indexes: one on App Stickiness and one for App Launches. We know that app usage varies greatly by category, by vertical and even from app to app. This data is presented as a means to show the seasonal trends in app usage, as well as represent the overall story of what’s happening in the app ecosystem. Further details on which verticals saw the greatest improvements in their app user engagement and retention can be seen in the most recent version of the Localytics App Stickiness Index.

If you find that your app saw similar results, there are smart steps you can now take to engage your users and turn latent users into repeat ones. Here are some ideas to start:

  • Identify your most engaged users. Get to know who they are - are there common attributes they have in common? Check out the most common steps in their funnel - what actions do they typically take and, in what order? Collect feedback from an in-app NPS survey campaign - why do they use your app and what do they want more of? Thank them for their time with special offers. Turn all this new insight into marketing campaigns that encourage the same behaviors with other similar audiences who maybe haven’t crossed the 10x/month mark yet. 
  • Identify the users from the new Sept/Oct and Nov/Dec cohorts who haven’t returned to your app recently. Understand who they are and where they came from - do their devices represent new phone/tablet models? Did they download your app as a result of a special holiday offer? Compare their first events with those of your engaged users - are there differences that may explain why they didn’t stick around? Create personalized offers and targeted push campaigns to bring them back to your app. Articulate what’s new and how you can help them. Direct them to the parts of your app that create that “a-ha” moment.

Moving forward, engagement may slow down in Q1 as people return from the holidays and get back to their regular routines (based on what happened in previous years). Take advantage of this short-term slowdown to test out ways you can influence engagement changes from the moment you first meet your app users. The bar has been raised for you to get to know your users from the first moment you met them. Test new marketing campaigns now, and turn the ones that work into long-term engagement strategies for the year.

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