Why Retention is More Important Than Acquisition for Mobile Marketing| By |Donté Ledbetter

Person Touching Smartphone

(Image Credit: Japanexperterna.se via Flickr)

There are approximately three million apps in the Google Play Store and Apple App Store combined, and consumers are spending 84% of their time in only five of those apps. There’s a good chance most people who download your app won’t continue using it after the first week. If you’re an app developer or brand who is focused on app acquisition, this is alarming.

What do you do when you’re spending tons of money on acquiring new users but they’re not sticking around? Focus on retention.

Most marketers see increased acquisition as a sign of a growing app, but it’s user retention that will define your app’s success in the long run. Here’s why retention is more important than acquisition for mobile and one way you can effectively retain your users.

A retention-focused marketing strategy is better for your business.

If there’s any doubt that focusing on your existing customers is more important than acquiring new ones, consider this:

80% of your company’s future revenue will come from just 20% of your existing customers, according to Gartner. That means 80% of your revenue will come from a segment of customers that you may be overlooking. With many app developers pouring money into fancy advertising campaigns and marketing tactics to acquire users who will only contribute to a fifth of their revenue, it’s easy to lose touch with the power users who are engaging with your app the most and acquiring users for you through word of mouth.

The average app user has 36 apps installed on his or her smartphone, but spend most of their time in four to six apps on their phone, which means most of the users you’re spending money on acquiring are uninstalling your app pretty quickly or leaving it in the pile of apps they never use. That’s money down the drain.

On the other hand, a retention-focused marketing strategy can increase your company’s profitability. According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%.

Bottom line, focusing on retention and fostering long-term relationships with your users is not only a good thing do from a customer service standpoint, it’s also good for your pockets.

What can you do to retain users? Engage early, engage often.

According to Appboy, 90% of the people who engage weekly for the first month after download are retained, compared to only 23% of people who don’t engage in the second, third, and fourth week. This is clearly a sign that you shouldn’t stop engaging with your users after the first week, something that too many app developers are finding out the hard way.

Appboy LTR Retention Data

(Image Credit: Appboy)

So what can you do to keep users active weeks after they’ve downloaded your app? Consistently engage with users on multiple channels as early as possible.

With the rapid growth of digital consumption, people have become more nimble in the digital world, using multiple apps, sites, and devices to make their everyday lives easier and more entertaining. As a brand or app developer who’s trying to win the attention of users, a single-channel strategy that you deploy every so often just won’t work.

An effective multi-channel messaging strategy for apps consistently provides value to the user and encompasses push notifications, in-app messages, email, and web (including your own web properties and social). Here are some ways to use these channels:

  1. Assuming users have push notifications enabled, you can drive users back to your app with time-sensitive promotions and alerts. They key here is to not annoy your users with endless push notifications. Use them when you have something important to communicate or when your users are becoming inactive.
  2. 34% of users abandon an app because they lose interest. Use in-app messages to increase engagement among users who are already using your app with helpful updates, personalized greetings, and reminders. Keep users interested every time they open your app.
  3. Use emails to reach users across mobile and web with dynamic and valuable content. For example, when a user signs up for your service through your app, you can send them a drip campaign with helpful content on how to get the most out of your service.
  4. Although trends indicate that users are spending more time on their mobile devices than their desktops, the web is still an important place for you to engage with your users. Provide valuable content through social media and your website and use web notifications to make sure your users don’t miss important updates, even when they’re not using their mobile devices.

Of course, acquisition shouldn’t be completely ignored because you can’t retain what you don’t acquire. However, your app’s success will depend on how many users actually stick around. So the next time you think about splurging your marketing budget on acquiring new users, remember that you have loyal users and would-be loyal users who you probably haven’t been paying attention to. Retain them for as long as possible. You need them.

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