Customer retention often takes a backseat to acquisition, despite the fact that it costs more to acquire customers than to keep them and existing customers spend 33 percent more. This is abundantly true in the mobile world where marketing strategies, budgets and metrics are all geared toward signing up more app users. The tally of app store downloads can easily become a transfixing data point and the foremost measure of success.
As fun as they are to follow, app download numbers and even app user numbers are deceptive. Fickle users tend to download and delete apps at breakneck speeds, so those statistics aren’t providing the entire picture. The guiding question for most mobile app strategies should be: How many of my users are engaging with the app on a daily, weekly and monthly basis?
The High Cost of Acquisition and Churn
The cost of gaining app users reached an all time high in March 2015, when Fiksu’s “Cost Per Loyal User Index” data showed that the cost of acquiring a single loyal iOS app user surpassed the $3 mark, a 113 percent rise over the previous year.
At the same time, Mark Flavelle from Tapstream revealed the results of a year-long, detailed study that shows the depths the market has reached when it comes to app retention. His data indicates that only 14 percent of users stuck around after one day of downloading an app, 10 percent after a week and just 2.3 percent after a month. That’s a startling 97.7 percent app drop-off rate within 30 days of download.
For mobile startups, it’s a constant battle to determine how to strategically spend money to obtain new users and reduce app abandonment. There is so much pressure to attract new users month after month, yet even incremental increases in retention can produce big gains. Maintaining an app’s longevity means pivoting an acquisition strategy to create retention-driven processes that sustain a consistent user community for years to come.
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