Content Writer at Leanplum
User retention is a big problem for mobile teams. The average cost-per-install is steep enough already, currently sitting at $2/user. Furthermore, Leanplum’s latest data science report revealed an even more sobering statistic: the average retention rate is 21 percent on day one, and only 1.89 percent by day 90. The effective cost of acquisition skyrockets when app publishers realize that the majority of their users don’t become long-term customers.
But a low retention rate doesn’t mean that all hope is lost. Our data science report, Retention, Revealed: The Need-to-Know Facts Behind App Retention & ROI, found that the majority of unengaged users don’t uninstall your app. Read on to learn how to transform a dormant user into an engaged user.
Dormant Users vs. App Uninstalls
Push is an effective tool to encourage re-engagement; we found that the simple act of sending push notifications increases retention rates by 20 percent. Of course, if a user uninstalls your app after the first use, it’s impossible to send them a push notification.
To identify the size of the dormant user opportunity, we studied average uninstall rates. We found that 23 percent of first-time users uninstall apps within the first week of use.
This suggests that we have 68 percent dormant users in that period. These users have not uninstalled the app, and they are not included in the retention numbers. You have the opportunity to reactivate over two-thirds of your user base with push. There’s still hope that you can gain them back through personalized messages.
Lost Monetization Opportunities from Dormant Users
Unfortunately, if 68 percent of your users are dormant and you’re not taking actions to reactivate them, you’re losing revenue every day.
According to App Annie, apps as a whole are expected to reach an estimated total global revenue of $51 billion by the end of 2016.
Let’s look at a well-known gaming app. In its first year, Candy Crush had 500MM downloads. According to Think Gaming, Candy Crush earns roughly $680,836 per day through in-app purchases. If Candy Crush could retain even 15 percent more of those 500MM users, we would estimate that Candy Crush would earn roughly $102,125 more revenue per day or over $37,275,625 more per year.
The same theory can be applied to ride-sharing apps. According to one source, Uber has around 8MM users and 1MM trips per day. While we don’t know the average cost of each ride, let’s imagine that the average ride is five dollars — roughly the cost of one Uber Pool ride in the US. If Uber engaged an additional 15 percent of dormant users, that result would be $1.125MM more revenue per day.
Shattering the Stigma Around Push Notifications
If you have concerns that sending push notifications drives users to uninstall, you can put that fear to rest. This data validates that sending a push on any given day does not lead to a decrease in retention in the subsequent days. There is no evidence to suggest that push causes app uninstalls. In fact, push increases retention and can save mobile teams significant spend.
While sending push notifications actually helps you retain more users, sending personalized push seals the deal. Here are some common ways to personalize messaging:
- Include the user’s name in the push notification
- Customize with a specific event, like a shopping cart item or relevant content
- Respond to individual behaviors, such as sending during times of day when users are likely to engage
There are so many ways you can personalize your messages. Something as basic as understanding platform differences on Android vs. iOS can impact how a user interacts with your app. By starting valuable conversations with users, rather than putting them on the receiving end of a generic blast, you create a relationship that encourages both parties to engage.
Are Push Notifications Enough to Re-Engage Dormant Users?
Push notifications are the most effective tool we’ve found in the battle for retention. Simply sending push messages of any sort provides a 20 percent boost to retention, while personalized notifications sent with Leanplum’s Optimal Time feature show a 7x higher retention rate.
Even so, it takes an integrated approach to craft a complete push notification campaign. A/B testing is a must if you want to optimize your content and provide the best possible experience. Furthermore, you can segment your audience based on usage history or location, just to make sure your messaging is 100 percent relevant to them.
Read our data science report to get the lowdown on why retention matters and how push can bring dormant users back in. If 68 percent of your users are going to become dormant, you’ll have to do everything you can to re-engage them before they uninstall.
Tags: App Strategy, Mobile App Development