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App Development
6 minutes read

User Retention: Why Is It so Important?

by Robert Kazmi
App Development
6 minutes read

Many startups fail to consider a key metric: User Retention. Building a web or mobile app is not only about finishing a product so that it attracts new users. Although User Acquisition is an important metric, increasing the number of users is not enough. It is also important to guarantee that users keep coming back to your app.

Measuring the Retention Rate of your app throughout a time period is a crucial way to guarantee that it meets users’ expectations. After all, if customer retention remains high, it is very likely that users enjoy your app. On the contrary, if retention metrics remain low, it means users are not enjoying your app. There are various reasons why one or the other scenario might occur. Understanding them correctly is key to guarantee the success of your app.

In this post, we explain what User Retention is, why you should measure it, how to do it, and how it differs from User Acquisition.

What Does User Retention Mean?

User Retention is a web or mobile app strategy that focuses on keeping users coming back to your app. It seeks to keep the number of active users high throughout a time period. The user retention is measured with the Retention Rate. The User Retention Rate is one of the various ways to measure user satisfaction for your app.

Like with any other business, it is important that your users keep returning to your app. Just like some industries measure customer retention, you should measure the number of users that keep coming back to your app. This helps you improve your app and your overall business goals. 

What Is User Retention Rate?

The User Retention Rate is a measure of how many users remain active during a time period. The number of users is initially measured and then contrasted with the number of users at the end of the time period. This rate helps measure user satisfaction with your app because it gives you an idea of how many of them keep coming back.

This is an important metric because it helps you understand, in a general manner, whether your users see value in your app or not. If they do, you can assume that is the reason why they keep coming back. Otherwise, if the rate is too low, you can assume that they do not perceive value, and as a result, they stop using it. 

However, keep in mind that retention rates are only general indicators of an app’s usability. They need to be analyzed in detail in order to reach solid conclusions. Retention rates can sometimes be affected by factors that do not depend on your app. Thus, you want to make sure that there is actually some relationship between a low or high rate and the quality of your app. In other words, you want to establish causality between your app and the retention metrics, not just correlation. 

How Is User Retention Measured?

There are different ways in which you can measure User Retention. Ultimately, this depends on the time period you want to consider and the types of users, whether they are existing users or new users.

Let’s look at the following example to understand how User Retention is measured. Suppose your app has 50 new users at the beginning of the month. Now, let’s suppose that by the end of the month, only 25 of those initial 50 users keep using your app. For this case, the rate of user retention would be 50%. If the same 50 users were active in the same time period, the rate would have been 100%. 

This same metric is not restricted to new users. It can also be used for existing users. Whatever type of users you decide to measure, compare the same users at the beginning and end of the time period. Otherwise, you would be comparing apples with oranges.

The Difference Between User Retention and User Acquisition

There are important differences between User Retention and User Acquisition. The latter focuses on attracting new users to your app. The former focuses on maintaining users, new or old, in the active user base of your app

Acquisition demands a combination of marketing, branding, and design strategies to attract new users. Ultimately, it seeks to increase the number of users. Retention requires focusing on the User Experience in order to reduce user churn. This last implies engaging users by guaranteeing them a frictionless journey throughout the different stages and features of your app. 

How Do You Maintain User Retention?

There isn’t a single thing you should do in order to maintain User Retention. When it comes to the things you should avoid, keep in mind that bugs and mistakes in your app will increase user churn; this becomes especially important for new users. When someone uses your app for the first time, if they encounter a problem, they will most likely delete it and never use it again. This is something you can avoid by implementing strict Quality Assurance practices. 

In terms of the things you want to guarantee for your app, make sure to focus on its usability and User Experience. Although you cannot easily measure User Experience, you can get valuable insights if you identify the key pain points of your app. 

Also, do not overuse push notifications or add unnecessary User Interface (UI) elements that may complicate the overall experience. Although push notifications are a great way to engage your users, using them too much may have the opposite effect. The same goes for elements on the screen of your app. Try to guarantee an easy onboarding so that any potential difficulties do not prevent anyone from using your app. 

Ultimately, try to find out what works and what doesn’t. It is the only way to guarantee high retention rates. 

Final Thoughts on User Retention

Whether you build a web or a mobile app, maintaining high retention rates is a crucial aspect of your app’s success. Failing to consider it may result in a high churn rate. 

There is no single way to measure retention metrics, so understanding what works best for you is important. For startups, a strategic thing to do is find an experienced app development partner that can help them figure out the intricacies of app development

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