Andrea Gudmundsdottir, international marketing and PR assistant at Testbirds, argues that a strong user experience is the key to generating high mobile app retention rates.
Last year, Apple’s App Store and Android’s Google Play both topped over 1m apps. Moreover, iOS users spent over $10bn on the App Store in 2013 and over $1bn in December alone, making it the most successful month in the App Store history. This is a huge increase from 2008, when the App Store had merely 10,000 apps, which at the time was considered remarkable.
One of the implications of the rapid changes in the app industry is that the success of mobile apps can no longer be measured in the number of downloads alone. Mixpanel, a San Francisco-based analytics firm, argues that “retention is the most important metric today; it is simply the best measure of how valuable customers find your product”. Over the past three years, a couple of user retention benchmarks have been established, allowing app publishers to compare their user retention rates to those of others.
User retention ratio
In 2011, Fred Wilson from Union Square Ventures laid out a user retention ratio for web and mobile apps. This ratio, which he called 30/10/10, was based on metrics that he came across as a venture capitalist. He referred to this ratio as the “law of web/mobile physics” as it emerged repeatedly in analytics data for different companies.
According to his ratio, 30 per cent of registered users or people that download an app will use it each month, 10 per cent of registered users or people that download an app will use it daily and out of those using the app daily, a maximum of 10 per cent will be concurrent users.
Wilson’s ratio became one of the key benchmarks for mobile app retention. However, in late 2013, Mixpanel published a report in which it refuted the industry-wide standard as the appropriate tool for comparing apps across categories. Its main argument was that retention numbers are as varied as apps themselves. They criticized Wilson’s ‘one size fits all’ ratio as lacking context. For example, consider the comparison of a messaging app to a monthly horoscope app using the 30/10/10 ratio.
If user retention rates are category-specific, the question arises, which benchmarks can be used as the industry standard? Mixpanel took the first step in creating benchmarks for each app category, thereby enabling app developers to measure themselves against the category-specific standard. They tracked data over a three month period (August – October 2013) to get an average rate, free of incidental variation. Unsurprisingly, the results showed different user retention rates across categories, with the lowest retention rates (11 per cent) for media and education apps and the highest retention rates for messaging apps (50 per cent) and games (30 per cent).
These benchmarks are undoubtedly valuable for app publishers as they allow them to understand how they stack up against other apps. However, figures on user retention rates should not be used as the standard of success. To succeed in the long-term, you need to be one step ahead of your competition. The question is: How do you do that in such an overly competitive industry?
From downloads to engagement
Data from Localytics, an analytics and marketing platform for web and mobile apps, revealed that user retention increased by 10 per cent over the last three years. At the same time, the percentage of users that used the app only once after downloading, held steady at 22 per cent between the years.
Based on the data, Janet Aronica from Localytics concluded that the focus has already shifted from downloads to engagement. For that reason, she believes that “the next set of leaders to emerge will be those who personalize and improve the app experience with a data-driven and iterative approach”.
Ultimately, it is the investment in a strong end user experience that leads to high retention rates. Even the smallest faults may determine whether the user decides to return to the application or not. The first impression often becomes the lasting one, leaving no room for mistakes. If the app does not immediately satisfy the user, we all know what happens – the app gets deleted, or at best, ignored thereafter. After all, how long will it be until the next best thing catches on? In a matter of seconds, these kind of decisions multiplied on thousands of devices can have a detrimental effect on the likely success of an application.
End user feedback
One of the best techniques for optimizing user experience is by obtaining feedback from end users themselves. Feedback is often part of the improvement process of apps, the perfect example being online reviews and ratings on the various app store platforms.
These reviews, on one hand, can be incredibly rewarding if comments are positive. On the other hand, end users are the first to report problems and user issues, with potentially devastating consequences. Even if the feedback is integrated into the improvement process of the app in the form of updates, the app might have lost its momentum already. Therefore, receiving feedback from typical end users before launching an app might be a better option.
Crowdtesting is a relatively new concept to do just that. Depending on the status of the app, the concept can be used to test everything from prototypes to beta-stage applications. A group of testers, representing the app’s target group, test in their own environment on their own devices. Thus, they test the app from the end user’s point of view. They report bugs as well as usability issues and give recommendations for improvement. A project manager then double-checks and approves all bugs before aggregating the results into a management report given to the app publisher.
The process resolves faults and usability issues and hence enhances the quality of the app. By optimising the user experience before the launch, chances for higher acceptance and ultimately higher user retention are maximised. Reflecting back on to Mixpanel’s standard of success for apps, it is clear to see that the retention rate is not the determining factor of triumph. Rather, it is an indicator of how well an app addresses the users’ needs and expectations. A good first impression thus paves the way for lasting user retention.
Andrea Gudmundsdottir is international marketing and PR assistant at Testbirds