Mobile has emerged as a way of life for consumers. As mobile continues to grow in importance, so have consumers’ expectations for it. Unfortunately, businesses haven’t innovated at the same rate, which is one of the reasons we believe businesses are in a mobile engagement crisis.
The data proves it. The percentage of users who abandon an app after one use is now 23%, a slight improvement from the 25% we saw in 2015. But clearly, with about one in four users still only using an app once, not enough has been done to match what consumers want and restore apps to the success of just a few years ago.
With that in mind, today we are releasing an annual update to our app user retention study, which measures loyalty and abandonment across our user base of 37,000 apps. Five years in, we have a solid understanding of what user retention should look like as well as the factors that can cause it to fluctuate. Our study focuses on two key metrics:
User Retention: The percentage of users who return to an app eleven or more times.
User Abandonment: The percentage of users who abandon an app after one session.
In the study, we also found that user retention recovered from 34% in 2015, a dip of 5 percentage points from the previous year, to reach 38% in 2016. While this number is also an improvement, there is still work to be done in order to avoid churn and ultimately convert more users to loyal customers. Because even though 38% will return to an app 11 or more times, that means a whopping 62% will use an app less than 11 times. This is not a sustainable business model.
We investigated a number of different areas that are impacting the changes in app user abandonment and retention and found that both iOS users and apps in the mid-stage of their growth drove the improvement this year. Let’s dig in for more details.
Overall User Retention Improves to 38%
This year, we were encouraged to see an improvement in number of users who return to an app 11 or more times, rising to 38% in 2016 from 34% in 2015. On the other hand, user abandonment (those who only launch an app once) made only a slight improvement, dropping from 25% in 2015 to 23% in 2016.
While the progress does not go unnoticed, the percentage of users who only try an app once is still high, especially when we compare it to the percentages of just a few years ago, a time when the app space was less cluttered and consumers had more of a connection to brands. In 2014, only 20% of users were abandoning apps.
This slight progress in user retention is nothing to rest on. We believe apps are at a tipping point when it comes to mobile and what companies do now will determine how successful mobile engagement will be in the near future.
Behind The Data – iOS User Retention Improves to 36%
One of the causes behind the change this year is improvement in user retention for iOS apps. The percentage of iOS users only opening an app once fell from 26% to 24%. The percentage of iOS users returning to an app 11 or more times increased from 32% to 36%.
One potential reason for this could be the advancements made to the overall app experience on iOS devices. From multitasking to split screen to allowing notifications to be presented in chronological order versus grouping them by app, Apple has had a focus on improving the way consumers engage with their favorite apps.
Behind the Data – Medium Sized Apps Saw Most Improvement
With the app ecosystem more competitive than ever before and user churn a major issue, we looked into app sizes to see if a certain sized app found success this year with user retention.
We found that apps in the mid-stage of growth, between 15,000 and 50,000 MAUs, had the strongest year over year lift when it came to user abandonment and retention. The percentage of users only launching an app once fell from 31% to 28%. On the other end, the percentage of users returning to an app 11 or more times increased from 23% to 28%.
This is most likely due to a stronger focus on engagement, as a means to drive retention in the typical app user lifecycle. Data shows that utilizing push notifications, in-app messages, email or remarketing helps to grow the loyalty of their current users. In fact, we have seen user retention as high as 49% for users who have push notifications enabled. Once companies have established their ability to engage their users, they can focus on growing their user base — propelling them to become a large, well-known app.
In-App Messages Improve User Retention to 46%
The areas spelled out above explain why user retention improved this year, but we wanted to leave you with one powerful idea on how you can improve user retention. Today, we often hear about the power of push. However, it’s often overlooked cousin — in-app messages — also has a dramatic effect on user retention.
Apps utilizing in-app messages see 46% of their users come back 11 or more times, while apps who do not incorporate an in-app strategy see that number drop to 36%. In-app messages also have an effect early on in a user’s lifecycle, as only 17% of users will only use an app once if they see an in-app message, while apps not utilizing in-app messages see 26% abandoning the app after one session.
Since users do not have to opt-in to in-app messages, they can be a great way to onboard users to the app and then keep them engaged with the most useful features of the experience. If used effectively, and personalized to the user, in-app messages are a strong tool in an app’s arsenal to keep users around.
Moving Forward
With more insights-driven mobile engagement like triggered in-app messages, businesses will tip the scales towards success and rise out of the mobile engagement crisis. We’ll be keeping a close eye on app user abandonment and retention over the next year with our quarterly benchmarks. In the meantime, we encourage you to learn more about the steps towards mobile engagement success in our latest infographic.
Methodology
Localytics is the leading mobile engagement platform across more than 2.7 billion devices and 37,000 mobile and web apps. Localytics processes 120 billion data points monthly. For this analysis, Localytics measured the percentage of users who only used an app once as well as the users who returned multiple times. For the in-app messaging analysis, we compared the percentage of users who did or did not return to apps who are using in-app messages compared to those who are not. The timeframe for the study was March 1st 2015 – April 30th 2016.