In his latest exclusive with Top Business Tech, Mike Rhodes, CEO of ConsultMyApp, details how companies can better retain their app users.
The iOS App Store launched in 2008 with 500 apps available for users to download. Fast forward over a decade, and that figure has skyrocketed to 1.85 million, with an additional 2.56 million apps now available through the Google Play Store. By 2020, these annual app downloads are set to peak at 258 billion.
This monumental growth in app creation has inundated the customer with choice, meaning that if an app does not attract and engage its users from day one, it can quickly fall out of favour and into irrelevance.
So, amid such a saturated market, where should businesses concentrate their efforts if they are to obtain a competitive advantage? The in-app experience or user acquisition? Whilst acquisition is undoubtedly important, to foster greater customer loyalty, cultivating a positive post-acquisition experience is essential, but this fact often goes missing in modern app marketing strategies.
Retention retention retention
Today the app market is flooded with new, innovative, and disruptive products each day. This is a testament to the creativeness of app developers, but it makes it increasingly challenging to stand out from the crowd. To retain customers, it is therefore essential that the user experience is flawless before discussions about spending on customer acquisition even begin!
The latest statistics place the 90-day average app retention rate at 25 per cent, meaning that over the course of three months, modern app creators and businesses are likely to churn 75 per cent of their users. Therefore, despite the 200+ hours that go into making an app, in the space of just 30 days, an app can lose huge swathes of users.
So, how can you optimise the app experience to ensure strong retention levels?
- Easy onboarding: This shouldn’t come as a surprise, but the more straightforward you make the onboarding process, the easier it will be to acquire new users. In many respects, simplicity is key. Focus on creating straight forward account activation and login mechanics, ease the user in with only the most relevant information and provide instructions that highlight key benefits and features. This is onboarding, not overloading.
- User Communications: Statistics show that push notifications can double the 30,60 and 90-day retention of apps, but they should be handled with care. Executed poorly, push notifications can be intrusive and off putting to the user. What does this mean from a developer and business perspective? It means monitoring the frequency and type of notifications to ensure you are sending the right messages to the right people and at the right time and being honest about the importance of the messages. By their very nature, push notifications are a ‘noisy’ and interruptive messaging channel, and they should be used as part of a wider omni-channel messaging strategy that includes other more passive messaging channels such as app inboxes, in-app messaging, email etc. Failure to connect the wide range of channels available in 2021 will leave you over-reliant on only one or two that simply don’t make for a well-balanced communication strategy
- Personalisation & Dynamic Content: Unique user personalisation is a strong and attractive attribute to any product but with apps, it can truly set you apart from the crowd. Utilising in-app and external data from customers will enable you to adapt and refresh the user experience according to their preference and interests. Coupling app & message personalisation with dynamic content in your messaging is also a must. Dynamic content ensures when your user receives a push notification in London if it’s raining, they aren’t given an offer on ice-cream, and if a user is having a (rare) sunny day in Manchester they aren’t told about your new range of coats. Users are crying out for greater personalisation and contextually aware messaging and with the current technology available there really is no excuse not to embrace it!
These are just a few ways that app developers and businesses can ensure that the user experience (UX) is a seamless and unique journey that keeps the customer engaged from onboarding right through to in-app purchasing.
Prioritising Customer Relationship Management (CRM)
The importance of CRM within app development cannot be understated. When it comes to apps, user retention falls under the umbrella of CRM, as does customer satisfaction and the never-ending job of driving higher sales revenues. These are all extremely important aspects that need to be addressed in equal measure.
There is a worrying trend within the mobile app industry where CRM doesn’t work in sync with the acquisition process. Problems occur when this happens, for example, excessive spending on user acquisition without a thought-out plan for retention and an overly intrusive or generalised approach to in-app communication and notifications.
Effective CRM is an ever-changing science. When activated correctly, it can help ensure that the money spent on user acquisition is driven by the best insights regarding customer preferences. To ignore the vital data that CRM can provide and jump straight to spending on the acquisition process is the app equivalent of throwing money at something hoping it’ll make the users stick around. Instead, businesses should be taking advantage of this stream of data to evolve their customers’ journey and provide a positive user experience.
Assessing Value vs Cost
The final, crucial aspect to keep at the forefront of your decision-making process is the cost. Unless you’re working with a tech giant who has a seemingly endless pool of money and resources to commit to a project, the likelihood is that a business looking to produce an app is going to be working within frugal means.
These financial parameters can help dictate which funnel gets invested in, but that doesn’t stop mistakes from happening. Why? Put simply, it’s a lot easier to splash the cash on churning new users than it is to fix complicated aspects of the app such as the onboarding process, the communication strategy and the more intrinsic details that make an app truly engaging.
For user acquisition, it’s a lot more straightforward to assess the costs and the benefits. Cost-per-install prices can begin from as little as £1 per install to upwards of £10-15 per install, depending on the competition within that apps sector (gaming, news, gambling etc.).
Compare those straightforward costs to the time, manpower and analysis required to enhance the user experience, and you can see why businesses choose to invest in user acquisition prematurely.
The key here is assessing ‘CoCA’ (Cost of Customer Acquisition) against the ‘CoCR’ (Cost of Customer Retention) in terms of cost-benefit and seeing which channel is aiding best to ‘Customer Lifetime Value’ (CLV). Above we discussed the value of ensuring customer retention and its immediate effect on improving customer relationships so in most cases it’s not surprising and often more productive to prioritise anything that focuses on user experience.
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The debate between user experience vs user acquisition is one that divides even the most experienced app developers and marketers. However, at the end of the day, you can’t sustainably develop the customer lifetime value without providing a positive user experience.
Building a successful product means investing time, money, and energy into ensuring that your app is marketed correctly to your core target audience and retaining them in the long run. Without this, any money spent on acquisition is a potential waste, and at the very least unnecessarily inefficient.
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