There are 1.2 million apps in the App Store and data suggests that most people only use about 9 apps actively on a regular basis. These also include basics like email, Facebook and messaging. While most entrepreneurs believe user acquisition is the key to success, the reality shows that poor engagement and retention are becoming the most common reason why many mobile app startups fail.
Retention is incredibly important. No matter how many people download your app or sign up, if you can’t retain them, your marketing will soon become too expensive to keep you in business. In the startup world, such scenarios are very common – in fact, some studies suggest that over 95% of internet/mobile startups fail, with the majority due to spending faster than they can afford to. Development is by far their largest cost.
However, keeping your users engaged is incredibly difficult. Over 90% of apps are deleted only after being used once, and data from last year suggests that, on average, 97.7% of users lapse within the first 30 days. That’s in fact an 84% worse retention rate than the year before, when you could expect to lose only about 86% over the same period.
To cut it short, when building your startup, pay close attention to nailing your retention strategy or you aren’t going to get far. Here are some tips:
1. Design a Seamless Onboarding Experience
Onboarding is about getting a new user to the “AHA” moment as fast as possible. The “AHA” moment is the first time a user finally “gets” the product and becomes seriously engaged. Nailing this part of the user acquisition is incredibly important as the vast majority of users either never complete the sign-up process or never come back.
Many startups struggle with onboarding. In the early days of Twitter, most new users simply abandoned the app. After some analysis, Twitter’s team identified that the key determinant for people to stay is when they follow at least 10 people.
So they changed their sign-up process so the users get started with following at least 10 other users. Likewise, Dropbox realized their users are most likely to adopt the product if they put at least 1 file in their Dropbox folder. The growth team then created a gamified onboarding which incentivized putting in 1 file in return for extra storage space.
The key to a great onboarding experience is to not only identify your “AHA” moment, but getting your users to it as soon as possible. That means making it easy, without unnecessary friction, and, if possible, adding game features and offering a helping hand.
2. Implement Triggers
Apps like Facebook, Twitter, Instagram and others are great at bringing users back to their app. They do it so well that most people respond to all kinds of notifications and other triggers almost compulsively. Every time you get a like, follow, upvote, a new event is posted, etc,. there is a reason to notify the user.
Designing triggers is not an easy process. Get it right and you can build an addictive app, but get it wrong and you’re perceived as spammy and annoying. The key to triggers that work is to build them around actions that users desire the most – e.g. likes, follows, upvotes, etc. are all a sign of social proof, one of the strongest human needs.
3. Make Them Invest
People are less likely to abandon something if they feel they have already spent some time and resources in it. In the real world, it's called the sunk costs fallacy. That means we often stay in relationships longer, just because we already invested a lot of effort; we keep watching a bad movie because we already spent 15 minutes on it; or we eat something unhealthy just because we already paid for it.
A similar mechanism is used by many existing apps – you’re less likely to go to another social network if you have already built a network of contacts on Facebook; you’re less likely to use another note-taking app if you’ve already done all your research in Evernote; switch to someone else if you already collected loyalty points on Amex; or take a day off from studying if you’ve built a 5-day streak on Duolingo.
4. Build a Community
Building a community is bigger than product alone. Think of communities built around the World of Warcraft or Hacker News. It goes beyond just getting fans on your Facebook page. A community is something that will continue without you, without your content, or without your incentives. It’s a movement around a problem, idea or activity. And people who belong to something stay longer than people who merely subscribe or download.
