Aug 23, 2023
As we all know, user acquisition in the mobile space is becoming more challenging than ever. That’s why we’re seeing more mobile app publishers turn their attention (and resources) toward their user retention efforts. Data shows that moving the needle on retention can be more beneficial than moving the needle on user acquisition as well, with a recent OneSignal study claiming that increasing customer retention by just 5% can increase overall profits by a wide margin of 25 - 95%.
User retention refers to the concept of keeping users engaged in your product after purchase – for mobile app publishers, this means keeping users coming back for more after they install your app on their device.
User retention is often tracked by the retention rate – a key metric that measures the percentage of users who continue to engage with your app over time. However, there’s more than just one retention metric to track to get a sense of how your app is performing.
In this blog, we’ll cover the 8 top retention metrics for apps so you can better understand your user behavior and prioritize marketing efforts to improve retention and LTV.
Table of contents
What is CPI? CPI refers to the cost of each install your app acquires by comparing ad spend (top of the conversion funnel) to the number of installs (bottom of the conversion funnel). You can further break down your app installs by advertising channel and app store to get a better understanding of your user acquisition and see where you’re getting the most traction.
What’s the calculation? Cost per install is calculated by dividing total ad spend by the number of installs – this can be in total across a specified period (like Q3 2023), calculated with a specific campaign’s spend and installs, or even assigned to specific UA channels.
CPI = total ad spend / total number of installs
Why does the CPI matter? While app installs and CPI aren’t necessarily a user retention metric, it is the starting point for understanding your retention – app installs are the beginning of the funnel, and knowing how many users have entered the funnel (and at what cost) is fundamental in evaluating the gaps as users churn.
CPI is one of the primary metrics to gauge how well the marketing and advertising efforts are working. When the CPI is lower, you're getting more users for your money. On the flip side, a higher CPI could hint that the ads might not be as cost-effective for bringing in new users.
👀 Related reading: How much does mobile user acquisition cost in 2023?
What is stickiness? App stickiness, also referred to as your DAU/MAU ratio, measures user engagement on a daily and monthly basis as a quick look at retention.
What’s the calculation?
Stickiness = Daily Active Users (DAUs) ÷ Monthly Active Users (MAUs) x 100
Why does your DAU/MAU metric matter? Your app stickiness provides a quick look into how often your users are engaging with your app. A high DAU/MAU ratio indicates that users consistently return to the app daily, which is a positive sign of user retention. If you have a low stickiness ratio, it may be time to brainstorm new user retention strategies to keep users coming back weeks, months, and even years after they install your app.
One tried-and-true retention strategy for mobile apps – games in particular – are loyalty programs, which incentivize users to keep returning to play (and spend) in your app. Read our article on the 5 essential elements of mobile loyalty programs to see what might work for your studio.
What is DX retention? DX retention is the king of mobile app retention KPIs, looking at time-specific retention within your user’s lifecycle.
While you can measure retention over any time period, the most common intervals for DX retention in mobile apps are:
As retention comes more to the forefront in a landscape with diminishing returns on UA efforts, some publishers are even extending their look at retention and monitoring up to D360 and D720 retention.
What’s the calculation? Your DX retention rates are calculated relative to day 0, their first day using the app.
D[X] retention % = amount of users returning to the game on Day [X] / among of users who installed and opened the app on the first day x 100
Example: A company just launched their new weather app.
Their DX retention is as follows:
Why does DX retention matter? DX retention is the most important (and most popular) mobile app retention metrics. By charting retention along this standardized timeline, you can easily spot where users are churning and implement new retention strategies to improve your retention – and ultimately, your LTV. Mobile app publishers can do cohort retention analysis as well to group users together based on where they installed the app, what marketing they received, and so on to optimize retention strategies and better forecast churn and retention trends.
A cohort retention chart is a great way to visualize your retention funnel and see which cohorts of users are being retained well – and which cohorts aren’t. By creating charts like this, app publishers can more easily identify where the gaps in their user experience may occur and roll out new strategies (emails, push notifications, rewards, etc) to fix the hole in your retention bucket.
What is user churn? Your app’s churn rate is the percentage of users who uninstall or disengage from your app over a specified period of time. The churn rate is the opposite of your retention rate – it measures the people who left the app rather than those who stayed.
What’s the calculation?
Churn % = [users at beginning of period - users at end of period] / users at beginning of period x 100
For example: A company just launched their new dating app.
Calculation: (1000 - 200 / 1000) x 100 = 80%
Therefore, in this scenario, the churn rate after 30 days is 80%. The flip side of this is retention rate, which would make the D30 retention 20%.
Why is churn rate important? Your churn rate is a great metric to track as it immediately highlights how many users you’re losing over a period of time – and that hits home harder than a retention rate.
A high churn rate can indicate a number of things and highlight low-hanging fruit for your company to tackle in order to increase LTV.
Here are some examples of gaps in your user experience that your churn data may highlight:
👀 Related reading: Loyalty Drives +15% Scale and 9.5% D7-Retention for East Side Games
What is average session duration? This app retention metric measures the average amount of time a user will spend on the app when they open it, which can often be extrapolated to understand how long users are finding value in your app during each session.
What’s the calculation? Calculating average session duration is a simple comparison of total session time against number of sessions across your whole user base.
Average session duration = total duration of all sessions / total number of sessions
Why does average session duration matter? While other metrics we’ve mentioned thus far focus on how many users stick around (or not) in a specific time frame, average session duration gives you a deeper look at whether those sessions are giving value to the user or not.
While a longer average session duration can generally mean a user is finding more value in the app, and a shorter duration may mean they aren’t getting what they’re looking for, it isn’t always as cut and dry as that. For example, a user may spend 5 minutes getting a ton of value from an app, or they may be spending those 5 minutes figuring out how to edit their profile picture. Additionally, the average session duration is highly dependent on the type of app you have and the expected usage – for example, a weather app may have a much shorter average session duration than a fitness app.
Average session duration, like all of these mobile user retention metrics, is only one piece of the puzzle, and combining different metrics together with average session duration like user behaviour in the app (button clicks, navigation, etc) will paint a better picture of the overall user experience.
What is average session interval? This retention metric tracks the average time between a user closing the app and opening it again later. For example, a weather app may have an average session interval of one day, as the average user opens the app once every morning to check the day’s weather.
What’s the calculation? You can calculate average session interval by comparing the total session interval time by the total number of sessions within the timeframe.
Average session interval = total session interval time / number of sessions
Why is average session interval important? Tracking average session interval helps measure the longer-term engagement of your app and offers immediate insights into where you may improve the user experience. The longer a user goes between sessions, the more likely they are to churn, so keeping the average time between sessions on the low end will overall be better for your app’s retention.
Similar to other mobile app KPIs, there can be a wide variety of average session intervals between app categories as users have different use cases for different types of apps. For example, the average session interval for a fitness app may be 2 days as the users generally workout 3 times a week, versus a 2-hour average session interval for a communication app as users chat throughout the day with their friends.
What is net promoter score? Net promoter score, often referred to as NPS, is a customer loyalty metric that gives app publishers a rating of how likely users are to recommend an app to their friends. It’s a great, quick way to evaluate the overall value of your app to users.
NPS is based on a user survey that asks “On a scale of 0 to 10, how likely are you to recommend our mobile app to a friend or colleague?” and responses are categorized as follows:
What’s the calculation? NPS is calculated as an absolute number ranging from -100 → +100.
NPS = % promoters - % detractors
While a “good” NPS score is relative, a very basic rule of thumb is that an NPS score above zero can be considered a good sign.
Why is NPS important? NPS is a valuable mobile app KPI as it actually asks users specifically about their experience and how satisfied they are with your app, and can provide valuable insights into your brand, product, marketing, and customer service experience. By allowing users to also submit more information about why they scored your app as they did on the 0-10 scale, you can find where the most pain points exist and work to improve the overall brand and app experience for your users.
What is LTV? The Lifetime Value (LTV) metric refers to the total monetary value a user brings to your business over the course of their time using your app, comparing how much they spend in-app to how long they stick around.
What’s the calculation? LTV is calculated by comparing your monthly ARPU to average user retention.
LTV = average monthly revenue per user x user lifetime in months
For example, say a premium fitness app costs $10 per month, and the average user spends 16 months engaging with the app before they churn. In this scenario, your average LTV is $160.
Why is LTV important? LTV is a great metric to track as it combines monetization and retention into one overarching metric. There are multiple levers to pull with LTV – you can work to increase the average retention spent by a user or work to improve your retention and increase a user’s lifetime with your app. LTV is the cornerstone for publishers to forecast revenue, determine marketing budgets, and make other big decisions for the business.
LTV is a cornerstone mobile app retention metric for publishers to keep an eye on. Here are ways tracking LTV can come into play for your business:
Overall, LTV is driven by loyalty, which is a valuable factor for mobile game publishers to keep an eye on as it contributes to player retention, boosts monetization opportunities, generates positive word-of-mouth, and facilitates the growth of a vibrant community. By fostering player loyalty, mobile game developers can create a sustainable and thriving player ecosystem that ultimately offers the revenue publishers need to continue innovation and iterate on new mobile game experiences.
Every user retention metric discussed above is only one piece of the puzzle for understanding your overall user retention patterns. Plus, your retention metrics may look vastly different depending on your app category, target audience, geo, and more.
Once you have a firm understanding of your company’s goals within its app portfolio, you can start to track these metrics and implement new retention strategies to keep users sticking around for longer, spending more, and overall improving your bottom line. Subscribe to our newsletter to get a loot box of monthly insights on mobile app retention, acquisition, and more straight to your inbox.