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Understanding And Improving App Retention

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Last editedJan 20222 min read

Improving your business app’s retention rate is the key to boosting your revenue and brand loyalty. It is the most important metric for mobile marketers and for maximising the lifetime value of each user. The longer each user is retained, the more they will increase your revenue over time.

Of course, acquisition is just as crucial as you need to get people on the app in the first place in order to be able to retain them. But each user has so much more value than just that first visit, so getting them to return again and again is the ultimate key to success.

Here is our guide on how to increase app retention and the best app retention strategies.

What is a mobile app retention rate?

The retention rate of a mobile app is the percentage of users that continue using your app after certain set periods. The most common periods to measure app retention are one day, one week and 30 days.

The retention rate for mobile apps is not just a great way to increase revenue through continued user engagement, but also an indication of your app’s user experience. A high retention rate is a good sign that users are having a positive enough experience that they are returning frequently. A low retention rate means they are having a negative experience, though there is more you can read into it.

For example, if your app is struggling to maintain a retention rate beyond Day 1, then there is an issue with your onboarding or how your app first appears to users. A mobile app retention rate that drops off sharply after Day 7 could mean you are offering little beyond the initial product or content that brought the visitor to the site.

App retention by category

What makes a good retention rate will depend entirely on the category of the app, so understanding app retention by category is the first step. Retention rates between app categories can vary massively, as some apps are checked daily and others only several times a year.

For example, a sports results app may get checked every weekend by a user, but the same user may check a stock market app several times a day.

So it is important to understand what kind of app category you are in, and perhaps aim to design your app to fit into one of the more popular categories. According to Statista, the top four app categories (not counting games) are:

• Lifestyle 

• Personalisation 

• Shopping 

• Weather. 

Best app retention strategies

We could speculate using the list above that a shopping app that includes lifestyle content will have a better retention rate than one that doesn’t. However, there is a bit more to it than that, so let’s look at the best app retention strategies.

Data tracking 

Tracking data from the start is crucial to an app retention strategy so you can identify the different users visiting your site and the reasons why they stop or keep using the app.

Optimised onboarding

There are different types of onboarding you can implement depending on the type of app you have. You may want to highlight the benefits of using your app, or immediately or progressively explain the functions of the app. 

Personalised UX

Using data such as a user’s purchase history to personalise their experience can be a great way to improve your retention rate. Caution is advised though, as too much personalisation can be off-putting to some users.

Reward engaged users

You can create a loyal following by offering rewards or perks to regular users of your app. Discounts for referrals and time-sensitive offers are two of the best customer incentives to consider.

We can help

If you’re interested in finding out more about how to calculate app retention, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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