Uh Oh. Mobile App User Retention Rates May Be Worsening.

August 16, 2016

This article is included in these additional categories:

Customer Engagement | Digital | Media & Entertainment | Mobile Phone | Tablet | Travel & Hospitality | Videogames

Localytics-App-User-Retention-Rate-Trends-Aug2016It’s hard enough getting your app discovered. But then preventing churn is a whole new ball game. And it’s not getting easier, according to Localytics’ latest annual update on app retention and churn rates. In fact, fully 63% of app users will become inactive within 30 days after downloading an app, finds the analysis of a year-long period from June 2015 to June 2016.

That churn rate is up from 58% in last year’s analysis. However, that analysis was only based on only a one-month (May 2015) period, so the deterioration in retention rates may be due to seasonality. Still, the figures are also slightly down from Q4 2015 rates, so it may well be that retention is indeed becoming more difficult to achieve.

Perhaps these high churn rates are to be expected, given comScore research showing that half of smartphone users’ app time is spent with their single favorite app. (Which could well be a Facebook property.)

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Nevertheless, what Localytics has called a “Mobile Engagement Crisis” seems to be getting worse, rather than better, over time. By the third month post-download, 80% of users have abandoned an app, per this latest research, up from 75% in the earlier analysis.

High churn rates are common across app types, the latest study found, though some enjoy higher retention rates than others. The media and entertainment category has the highest 1-month (40%) and 3-month (22%) retention rates, followed by the travel and lifestyle category (37% and 20%, respectively). Gaming apps suffer the worst churn rates, shedding 73% of users by the end of the first month and almost 9 in 10 (89%) by the end of the third month.

One area to focus on for app developers and marketers is in-app messaging, which has been shown to increase user retention rates. Hooking users in early in the process seems paramount, given much lower churn rates among users who launch several app sessions within the first month post-download.

About the Data: Localytics used retention cohort analysis to examine the number of users who were still engaged with the app 30, 60, and 90 days after download. The timeframe for the study was users who downloaded apps from June 2015 to June 2016. Localytics works with 37,000 mobile and web apps across more than 2.7 billion devices.

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