Retention and engagement go hand in hand—but they aren’t one in the same. In a recent episode of Retention Masterclass, John Koetsier and I talked to “the Godfather of the Mobile Growth Stack” Andy Carvell, partner at Phiture, a growth consultancy based in Berlin. He puts the difference in simple terms: “So the way that I always kind of break it down is like, engagement is what the user is doing within the app, it’s the actions that they’re taking. Whereas retention is whether they’re coming back at all.”

Together with CleverTap and Phiture, Andy helped design the AIC framework to enable fast-growing consumer app companies to better understand the depth and intensity of user interaction. The framework categorizes user activity into one of the three types of engagement layers: Acknowledgement, Interest, and Conversion — with Conversion being the highest-value action a user can take within an app. This allows brand marketers to recognize which in-app activities contribute to revenue growth, thereby improving overall user retention strategies. In other words, Andy helped define a framework that allows app marketers to understand which engagement activities lead to better retention.

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“So retention, in its classic measurement, won’t tell you what the user’s doing when they come back, just whether they’ve come back or not in a given time period,” says Andy. “Whereas engagement is really [about] app-specific metrics and measurement around like what’s the user actually doing within the app? Are they doing something valuable? Are they just literally opening the app and then bouncing out again?”

When you take the time to understand AIC and how each section fluctuates over time, not only will you have a better understanding your users, but you’ll be able to better drive retention.

AIC from A to Z

We all know that our data tells the story of user engagement, but making sense of the data—especially as we accrue more and more of it—can be a challenge. Frameworks can help us make sense of the ever-increasing amount of data available. “So what AIC gives you in its purest state is essentially a snapshot of your active users in any given period, and allows you to kind of break that down to a better level of visibility of what’s really going on,” Andy says. “So just as I mentioned earlier, your active users or your retained users in any given period, let’s say monthly active, only really tells you whether they were seen within the app or not. Whereas, if you actually want to know if they’re doing something valuable, it’s helpful to kind of maybe stratify that a little further. So AIC stratifies your active users into three buckets.”

  • Acknowledgement—Imagine an AIC pyramid, and at the bottom is the least valuable engagement. “You’re always going to have the biggest chunk of users who are at least present in the acknowledgement layer, which means that they’ve either opened the app or clicked on a push message, they’ve basically just been seen within the app. So your acknowledgement layer basically includes all of your active users if they’ve been in the app, they’ve acknowledged that your app exists.”
  • Interest—The second layer of the pyramid is the interest layer. This pool is narrower, and the actions these users take show more intent. Perhaps they’ve put an item in their cart but then left the app before competing the purpose.
  • Conversions—And at the tip of the pyramid are that small, coveted pool of users who convert. If we stick with the e-commerce example, this would be a purchase. “But it could also be, many other apps that are not monetizing or not selling something, it could be posting something, for example, in a social media app,” says Andy.

If there’s an event tracked for each of those, then you can look at a graph of which of those events are happening the most often. He says to look at a histogram and at your top events to understand which actions users taking most often. “That will generally give you an idea of which are the most valuable events within the app,” Andy advises. “I’ll qualify that, somewhat. Depending on how you’re tracking, there may be events which are what we call ‘filler events.’”

Once you’ve refined your tracking and understand what users are doing the most, ask yourself, what are the key things which my app is doing? What is the key problem that it’s solving? What is the key value that it’s bringing to the user? And what events or what actions does the user take which unlocks that value? And how do you unlock that value to retain more users?

Ultimately, a good framework doesn’t tell you exactly what to do. “It’s not a shortcut to thinking,” Andy says, “but what it does do is provide, hopefully, a way to kind of guide your thinking and guide your activities based on some kind of some rules or some thinking which helps to kind of demystify what might be a complex topic.”

To learn more about AIC and other frameworks, read the full transcript below.

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