User retention is a topic for every marketer. Every time, all the time. And for a good reason, too! After all, we all know it’s not enough to capture the customer’s attention once – instead, the real work begins with trying to get them to stay with your application and pass on the good word.
Unfortunately, as with most crucial marketing metrics, there’s no one-size-fits-all answer to the ultimate question: What is a good user retention rate? Instead, the “goodness” of the metric will heavily depend on your industry, your target audience, and the socio-economic environment around you.
Today, we’re looking into the freshest user retention rate benchmarks we carefully gathered and organized in Pushwoosh at the end of Q2 2023 — jump to the industry benchmarks section.
So, if you’re worried about your mobile app user retention rate and wondering what you could be doing differently, better — this is the post for you!
A quick recap: everything you need to know about user retention
Before we jump into the latest updates on the app user retention rate benchmarks and best practices, let’s quickly recap the term.
What is user retention?
User retention shows how many people stick around and keep using your app over time. It’s a lot like customer loyalty, too. Getting someone to download your app is the first step. But what really matters is whether they keep coming back and using it regularly.
Good user retention occurs when someone downloads your app and then continues to use it frequently. High user retention shows that your app is valuable and engaging to its target audience. It means they find the app useful, fun, or beneficial enough to keep using it.
On the other hand, if people download your app but rarely come back to it afterward, that's not so great. It usually means that something might be off – maybe now would be a good time to update your UI and make it more inclusive, or the user experience during the app onboarding is not clear enough. Either way, low user retention signals that users aren't finding enough value to keep coming back.
And that’s something we all want to avoid and fix at all costs.
How to calculate user retention rate
In lamen terms, user retention reflects how many people continued using your app upon installing it in a given period of time.
It does get tricky, however, because there are several ways you can measure user retention and calculate it.
The most straightforward (and the most popular) approach is simply to divide the total number of MAUs by the total number of installs. As such, if 1000 people downloaded your app on Day 0, and you had 200 monthly active users in April, your user retention rate is 20%.
There is, however, a better way to dig even deeper and learn more about your app usage. We use this user retention rate formula at Pushwoosh because it shows more specifics about your customers’ behavior on a given day.
Here, you need to take the percentage of people who opened the app (App Open) on a given day of their onboarding (Day 1, 7, 30) upon installing the app (App Install) and divide it by the number of users who installed the app on a selected day (Day 0).
For example, you want to know how many people continue using your app one month after downloading it. You know that on July 1 (or any other date at least one month in the past), 1000 people downloaded your app. Then, you check App Opens for July 30 and learn that only 350 people interacted with your app that day. 350/1000*100%=35% – that is your user engagement rate for that specific timeframe.
You can then repeat the same procedure for each month in a quarter or in a year to see the progressing benchmarks of user retention for your app specifically and draw conclusions. Perhaps people are less active during the holiday season and you could engage them with some seasonal campaigns.
What is a good user retention rate for mobile apps?
A few years ago, you would read about a 20–25% user retention rate as an absolute industry benchmark, but Covid changed things — a lot. So today SurveySparrow reports that regardless of the industry, the average customer retention rate in the top five companies remains somewhere around 94%.
Impressive, right? Wait till we break it all down for the ordinary folks, not just Amazon and Facebook avid users.
User retention rate benchmarks: what we’ve learned so far
You have probably heard that what matters the most when it comes to mobile app retention benchmarks is the industry you operate in. At the end of Q2 2023, we analyzed 1053 iOS apps and 1085 Android applications to deliver you the freshest user retention rate benchmarks. Here is what we learned:
- The industries with the highest user retention rates include Banking, Telecom, and News. The lowest benchmark retention rate was spotted for the applications operating in the Food & Beverages, Media, Healthcare, and Sports sectors.
- The lowest benchmark retention rate was spotted for the applications operating in the Food & Beverages, Media, Healthcare, and Sports sectors.
We’d like to highlight that the results presented in the table above reflect on the median retention metrics, not the average ones. However, we believe it is a much more representative analysis when presented this way.
Pushwoosh's user retention rate benchmarks: an overview by OS industry
Another important note is how different the results can be for Android and iOS users depending on their industry. For example, we can see that iOS users are much easier to engage long-term when it comes to industries like Insurance, Telecom, or Transportation, while Android benchmarks are much higher for News, Streaming, and Banking applications.
For the most part, however, the results are pretty conclusive. For example, in the case of e-commerce retention rate benchmarks, both iOS and Android users show quite mediocre engagement (4.29% and 3.78% respectively). Similarly, mobile game retention benchmarks are not that different, with 6.98% for iOS and 4.81% for Android.
Have you compared your product against our mobile app retention benchmarks yet? Because we’re ready to dive even deeper with some evergreen strategies that will help you increase your CLV and drive more engagement than ever!
How to continuously increase your app’s user retention rate: best practices & real-life examples
If your goal is to ensure your users stay engaged and invested in your app during the first month and beyond, you can adopt one of the two proven strategiess: quick wins that imply using growth tactics or long-term investment through consistently delivering more value.
Of course, there are other common practices you can try to incorporate into your marketing strategy in order to increase user retention rates. For example, you could:
- Ask for customer feedback within or outside of the app to find out what you could improve for other users;
- Send push notifications to remind users that the app is still installed on their device (make sure to make the reminder as useful as possible not to cause an unsubscribe);
- Engage users with habit-building gamification within your mobile app, etc.
Yet, once again, everything will depend on the industry you operate in. That’s why we gathered some nifty examples from our customers’ campaigns and popular apps to show you how some of the most in-demand niches stay connected with their audience and drive high app retention rates.
E-Commerce & Retail
In e-commerce, where the competition is fierce, time is of the essence, and the best way to ensure you keep your audience engaged and grow customer retention is to reach them at the right moment. The second must-have component is a good incentive.
For example, you can throw in a free delivery for all the orders made through an app to entice customers into reactivating like La Redoute did in the example below:
Another good way to leverage hyper-personalization for e-commerce and increase user retention is to appeal to customers’ previous shopping experience with dedicated product recommendations, similar to what SHEIN did here:
Finance & Banking
There are plenty of opportunities for mobile applications operating in the finance and banking industry to increase their user retention rates. The most important tip is to keep your clients’ interests high. Pun intended.
For example, you can take a page from Revolut’s book and engage your customers with better-personalized saving rates, like in this example:
Or you can appeal to innovators in your target audience and engage them with a promise of unique features they’d be the first to test as long as they use your app frequently:
Gaming
As our report has shown, mobile game retention benchmarks drop significantly after the first day of use.
This means it’s not enough to get a user to play your game. Instead, you need to establish a reward system that will encourage them to come back for more over and over again. Fortunately, there are plenty of opportunities for you to do just that!
For example, you can implement a system of daily rewards that encourage users to log in and play every day in order to unlock awesome prizes the longer they stay engaged, just like Candy Crush does:
Media & Entertainment
In Media, Streaming, and Entertainment industries, you inevitably compete with behemoth brands like Netflix and Spotify. In fact, even those brands are endlessly competing against each other, barely maintaining their median monthly retention rate of around 2%.
That’s why it’s as essential as in other industries to get to know your target audience and appeal to their unique acquired tastes. Here is a good example of how Spotify designs playlists "just for you" based on the tracks you’d listened to previously:
Subscription-based apps
User retention is particularly important for subscription-based services, as for them, retention directly translates into paying customers. That’s why it should be one of your top priorities to have a retention strategy in place that drives engagement and consistency, as well as builds habits to ensure the user stays with your service for as long as possible.
Here is an example of an in-app message by Duolingo that encourages people to build up their language learning streaks consistently:
And here is another one by Ewa, setting an excellent example of how mobile push notifications with daily reminders help retain more customers:
Increase your user retention effortlessly with Pushwoosh
As you can see, communicating with the user is at the heart of each strategy. And one of the best ways to stay connected with your audience is through omnichannel mobile communications, sent in the form of push notifications, in-app messages, emails, or even SMS.
Pushwoosh can become your trusted partner in driving user retention and supporting you at every stage of your customers’ journey. Here is just a brief overview of how our automation solutions can help:
- Build lifecycle messaging campaigns that will run on the background of your marketing efforts;
- Set up trigger events that will send off relevant communications to help you engage more customers at the right moment and increase retention;
- Analyze user behavior inside your app and identify those at risk of churn;
- Ensure personalized omnichannel experiences for your customers so that they receive transactional updates and relevant marketing communications across the channels of their choosing.
Sounds exciting? Learn more about Pushwoosh on a personal demo:
