December 12 2017

While acquisition remains as the top priority for most apps and games, retention often seems to take a back seat. But in a recent post on Reforge, it has been called the one metric that actually defines your acquisition, monetization and virality. In this post, we’re going to take a look at why this metric is important and how it is the main driver of your growth.

“Retention is the core of your growth model and influences every other input to your funnel.”

Why is user retention important?

1. Leads to viral user acquisition

 If you want to make your app go doubly viral, retention is what you need to focus on. When you make an effort to add more value and retain your users, they are more likely to take the key actions that accelerate your acquisition. This could be by actively participating in your referral programmes, word-of-mouth recommendation or even creating content on social media.

More retention -> Greater word-of-mouth -> Viral loop of acquisition

For example, Castle Cats uses Activity Feeds to keep their users engaged. This builds a community in-app and creates a sense of belonging for the players.

But apart from greater number of app sessions, it also led to higher participation from the players in the referral program. Using Smart Invites, the game actually saw 25% conversions on referrals from engaged players. This in turn, increased their day 30 user retention by 2.5x. (Read case study)

2. Improves user monetization

When you retain a user for a longer period, he sees more value in what your app does or what it might have to offer. This gives you the opportunity to turn this user into a paying customer. With a retention strategy in place, you focus on increasing the app session lengths of your user cohorts, driving them to explore more about you and thereby, increasing the LTV.

Higher retention -> Longer app sessions -> Greater monetization

Higher retention leads to longer app sessions, indicating how engaged the players are in the game. According to Facebook, creating a community of these players can drive higher monetization. The players are nudged to make an in-app conversion, driven by how other players are performing in the game and their want to compete with them.

As stated in the Reforge blog, here are a few apps that used the freemium model to hook their users, create a community and actually start driving their monetization:

user monetization freemium model

3. Gives you a competitive edge

Hooking a user to your app, means keeping him away from churn when fads like PokemonGo step in. Keeping the user engaged with your app, leaves little room for your competitors to target them or their circles. This actually creates an all new, unintrusive channel of user acquisition for your app!

Higher retention -> Greater user loyalty -> Higher acquisition

For example, Slack. Slack focused on getting more users to sign up for their beta by introducing their features before the launch. Their focus on soft launch was to understand how their users interact with the app, before taking it to a larger market.

Focusing on a smaller cohort, they were able to retain all their initial users with a great in-app experience; leading to a greater word of mouth promotion. Read all about their growth story, here.

4. Accelerates your payback period

It often takes apps months to breakeven on their initial cost of user acquisition. The payback period determines how soon you can start reinvesting in acquisition to fuel your growth, without losing out on your organic growth channel. For instance, when you retain more users, more from their circle join your app too. And the more users there are on your app, there is a community that drives your monetization alongside! Now using this money to acquire and retain more users is what the growth hack is all about.

Higher retention -> Greater word-of-mouth -> Optimized user acquisition costs

BTW, have you calculated the compound interest on user acquisition budget?

But user retention is more than just a growth hack to grow your app. It is also the only way for your app to survive iOS11’s all new feature – Offload Unused Apps.

How can you improve your user retention?

By becoming a part of your user’s break time! Here are a few tactics that the top grossing games swear by:

1. Customize your onboarding

One of the first steps to boost your retention rate, is to customize and personalize the onboarding for your users. The better they understand what your app has to offer, the more engaged they remain right from the point of acquisition. Even Kim Kardashian uses the tactic to help her players understand the game better, and how they can move forward in the game.

But she isn’t the only one. Slack is also a great example of the perfect user onboarding. They make it a point to run the user through all the features, before asking them to login or sign up on the app. 

user-onboarding

Also read: Why you need deep linking to personalize user experience and boost app growth

2. Implement an Activity Feed

An Activity Feed is like your social media feed, where you can see what your friends and family are doing. In a game, this is where players can see the progress of others and also interact with them; creating an active community.

The stronger your community is, the more engaged your players remain with the game and the higher is your user retention rate. 

fancycatsactivityfeedfeedback e

3. Send out timely push notifications

An Activity Feed can keep the users engaged while they are still in the game. The most effective channel to bring back your users to the game when they are not on it, are push notifications.

Fancy Dogs uses push notifications to let their players know what’s new on their Activity Feed. This doesn’t just encourage another app session, but also helps in retaining a user who might have forgotten about your app or has been engaged with another.   

Social Push Notifications - Fancy Dogs

Social Push Notifications – Fancy Dogs

4. Easy content sharing and invites

If you want your players to remain loyal to your app, you need to bring in their social circle as well. Having their friends and family in the game, reduces their need to switch to chat apps or social media. This increases their app session length and also keeps them hooked to the game, because ‘their circle’ is now on the app too! But for this, you need to ensure that inviting their circle is as easy as possible.

Ubisoft’s Face Up Social game uses Smart Invites to fuel their referral marketing. Their users are able to invite their friends and family via all popular social channels and chat apps easily, increasing their participation. (See how Smart Invites work)

5. Re-engage them from email

Email marketing isn’t just for eCommerce stores or B2B products. You can use the channel to re-engage your users as well. The best example of this engagement strategy is Runtastic. It sends it users weekly report on their progress, sends them the motivation they need to continue using the app and more content to keep them engaged.

runtastic email user retention

6. Leverage social media

An average smartphone user is active on at least 2 social media platforms. We end up spending at least a few hours every day on social media to catch up with what our friends are doing, what new brands have launched and more.

Apart from posting engaging content regularly on channels like Facebook, you can also use retargeting ads to re-engage your players. Let them pick up from where they left the game instantly. You can also experiment with chatbots to keep your players engaged.

For example, Clash of Clans keeps its players engaged and motivated, by sharing tips on how they can achieve something in the game.

clash-howtowin

It’s all about following the mobile growth stack

Most apps and games tend to lose 80% of their acquired users by the third month. The reason being, they don’t focus on engagement and retention at the same time. This is where the implementation of the mobile growth stack comes into play.

If you want to achieve higher user retention, make sure you’re focusing on it before you start acquiring more users for your game.

user retention getsocial