Mobile App Retention Metrics: How to Measure It and Why It’s Not That Simple

Imagine this: You've developed a great mobile app, spent countless hours perfecting all the features, and successfully launched it. But after a few weeks, you start to notice a disturbing trend - users download your app, but on average, they only use it once and never come back. What's going on? The answer is retention.

What is retention

Retention (in this case, obviously, we mean user retention) is one of the most important marketing metrics. It helps us understand how well a mobile app retains its users over time. Simply put, retention (in this case, retention rate) shows the number of unique users who are still using the app after a certain period of time - most commonly, retention rates are measured after 1, 7 or 30 days.

Why is this important? Acquiring new users is usually a rather expensive way of increasing revenue, so it's important to focus on retaining existing users. Retention goes hand in hand with acquisition and one without the other doesn't make much sense.

How to calculate the retention rate

Calculating the retention rate is simple:

Number of unique users at the end of the period / number of unique users at the beginning of the period × 100 = Retention rate

For example, if 100 users download the app in one day, and after 7 days 16 of them are still using the app, the 7-day retention rate is 16%.

Other retention metrics

Active users

The active users metric shows the unique users who have used the app at least once during the selected time period. Active users can be measured over any time period, but most often active users are measured on a daily and monthly basis, which is the basis of the well-known DAU and MAU metrics. The DAU (daily active users) metric measures the number of unique users in 24 hours, while the MAU (monthly active users) metric measures the number of unique users in 30 days.

DAU/MAU ratio

Let's stay with the DAU and MAU metrics. It is the ratio of these metrics that is often used to determine user stickiness, or user loyalty.

Since this is a ratio of two metrics, the calculation is simple: DAU / MAU × 100 = DAU/MAU ratio

Tracking the DAU/MAU ratio can also be used to monitor the growth of a mobile app in terms of user engagement and measure the impact of new updates/features. Startups can also use this metric to evaluate potential revenue.

Churn rate

Churn rate is the opposite of retention. It measures the percentage of users who stop using your app within a certain period of time. A high churn rate is a warning sign that users are not finding long-term value in your app or are not satisfied with it.

Reality versus data: Why measuring retention is not that easy

After a clear definition of the individual metrics, we finally come to the issue of measurement itself. Regarding the average retention rate, many studies show that the average retention rate for mobile apps is around 25% after the first day (this would mean that the app loses 75% of users in the first day), and after 30 days, the retention rate is often less than 10% (this means that more than 90% of users are lost within a month).

Do you think this is too much? This data actually represents the average we encounter for most mobile apps, but it's not as straightforward as it might seem. In fact, traditional definitions often don't capture actual user behavior, which can lead to misleading conclusions

Consider these scenarios:

• Inconsistent usage patterns

  A user downloads an app, uses it occasionally for a few weeks, and then takes a break. Traditional metrics may classify this user as lost after a few days of inactivity, but the user may return later, meaning they were never truly lost.

• External factors

  Life events such as vacations, busy work periods, or various personal responsibilities may temporarily interrupt a user's use of the app. As a result, the user may stop using the app for a period of time, but this does not mean that they do not plan to return.

• Delayed engagement

  For example: A user downloads the app and realizes that he needs more time for the onboarding process (registration, data entry). After a couple of days, he opens the app again, but does not complete the onboarding process because something disturbs him. He then forgets about the app again for a few days and does not complete the registration (and start using the app actively) until a week after downloading it. Some users may also download the app with the intention of starting to use it later (for example, someone may download a fitness app, but only start using it actively after they have bought training equipment).

These examples show that strictly defined retention can over-simplify user behavior in the analysis and thus lead to conclusions that do not fully reflect reality. In fact, user interaction with the mobile app can change due to many factors that metrics alone cannot fully capture. Therefore, to get a more accurate picture of retention, it is important to consider the broader context of users' lives and the overall nature of the app.

Conclusion

A healthy and sustainable retention rate is essential to the long-term success of almost any mobile app. Proper measurement of retention will help to identify weaknesses and highlight other issues (UX and UI, app performance, onboarding) that may be troubling users, but that's a topic for the next article.

Remember that high retention rates are often the secret sauce that separates thriving apps from those that fall into oblivion. If you're wondering how to work with retention in mobile apps and keep it as high as possible, check out our next article.