$60 billion. That’s how much will be spent on acquiring new mobile users this year according to Apps Flyer. Meanwhile, day one retention is at just 25.2%. Do the math and that means mobile marketers a potentially $40 or $50 billion is going up in smoke nearly as soon as its spent. But as our Mobile presence hosts point out, if you spent just a fraction of those billions actually fixing retention and building the kind of brand experience that would attract new organic customers, you’ll be way ahead of the competition.  


The keys to app retention 

John Koetsier and I sat down with Sunil Thomas, CEO and Co-founder of CleverTap—who has helped solve retention for more than 8,000 apps—to talk about the keys to improving app retention and the metrics you need to measure to know if your efforts are effective. 

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Make your app “magnetic”  

Retaining users is all about creating a user experience that is magnetic—keeping users coming back day after day. Sunil says it’s all about taking action—two very specific actions: 

  • Omni-channel messaging—You have to be proactive about bringing users back to your app, especially new users who have not yet formed a habit and made your product a daily destination. Sunil says, “We allow our customers to reach out to their users over 12 or 13 channels, push notifications, in-app messages, app inboxes, WhatsApp for business, text messages and so on.” 
  • Personalization—All marketers know that personalization is the name of the game in the digital age. In fact, users expect a personalized experience as part of the agreement to give you their data. “There’s a first-time user, there’s a champion user, there is a loyal customer,” says Sunil. And you have to treat each of them differently, every time they come into the app (or when reaching out to them through your omni-channel messaging). 

Keep an eye on RFM  

If you want to make the most of your messaging and personalization efforts, you must pay attention RFM (recency, frequency, monetary) and target the right users. As Sunil says, “it’s about understanding your users and really segmenting them into small buckets.”  

Sunil describes CleverTap’s approach as an “automated segmentation methodology that allows users to break their user base into 10 unique segments based on three key metrics: recency, frequency, and monetary. On one end of the spectrum “are your champion users. These are the most recent, most frequent, and have the most monetary value typically.” On the other end are your hibernating users. “And the key here is to automate your life cycle management so that as people fall up and down these spectrums, they get the right experience that you’ve designed,” says Sunil. 

The 3 must-measure metrics  

No matter what vertical you are in, CleverTap recommends paying close attention to three metrics as part of measuring the effectiveness of your retention efforts: 

  • Retention rate—The speed of your business will determine whether you’re interested in a daily, weekly, or month retention rate but it’s a number you need to track. 
  • Conversion rate“Every app, every business really has three to five key conversion rates that makes or breaks their business,” says Sunil. Whether you’re concerned with tracking first install to first purchase, or converting free users to paid subscribers, but you need to be focused on the conversions that matter to you. 
  • Customer lifetime value (LTV)—This metric is your “North Star,” according to Sunil. “Now the problem with lifetime value is that it’s a little bit of a lagging indicator as compared to the first two,” he says, but it’s just as important to track.  

Success by the numbers 

If you put in the work, and heed the advice of experts like Sunil, you can expect to see dramatic results. Sunil says he often sees as much as 50% improvement in retention rates, conversions, and LTV within 12 months of taking action. With billions of dollars at stake, it’s time to get your strategy in place and start keeping the users you spent so much to acquire. 

To take a deeper dive into our Retention Masterclass, check out the transcript below.

Show Transcript