3 min read

Why User Retention is Critical to the Success of Your Mobile App

User retention can make or break your mobile app. From maximising marketing spend to gaining critical insight, the benefits of user retention or ‘loyalty’ are staggering – and acquiring that loyalty ought to be a critical goal for your business. But what exactly does it mean?


Put simply, user retention means satisfying your existing users to such a degree that they continue to engage actively and regularly with your app. This may be in the form of time spent on the app, purchases made, or any other metric that you deem relevant for your particular application.


Since attracting a new user costs five times as much as it does to retain an existing one, the financial advantages of user retention are clear. In fact, an increase of just 5% on user retention has been shown to boost profits by as much as 95%!


Of course, if user retention was that easy, it wouldn’t be referred to as ‘the silent killer’; according to eMarketer, 88% of mobile internet usage is spent on apps – but as more and more apps emerge, user retention becomes a bigger challenge for developers and marketers alike. With ever-growing competition and increasingly demanding users, prioritising retention should be at the top of your to-do list.


Still not convinced? Here are five business-critical benefits to upping your user retention game:

1. User retention helps lower marketing costs

Users of your app are already familiar with its features and functionality – and you can assume that, as regular users, they’re happy with your offering; in other words, you don’t need to sell to them quite as fervently. Existing users can also help to raise brand awareness which, in turn, can once again lower your marketing costs. 


2. Repeatable, reliable profit

Loyal users who make regular in-app purchases tend to spend up to 33% more, resulting in a higher customer lifetime value. They’re also 50% more likely to try new products than new users since they already trust your brand. Use mobile analytics to determine trends in user behaviour and recommend related products and offers to encourage future purchases. 


3. User retention provides free advertising!

Regular users are more likely to share their positive experiences with like-minded people, essentially becoming free advocates for your app. This approach is especially effective since people trust the opinions of other people far more than they trust a brand they’re not yet familiar with. In fact, almost 50% of consumers say that their friends and family are their top sources of brand awareness, and 92% of people trust recommendations from their friends and family over any other type of marketing.

4. Loyal users are willing to pay a premium price

Repeat buyers are far less price-conscious than new leads because they’ve used your app before; they know what to expect and they’re happy with it. This is especially true among millennials who would only switch brands if prices were at least 10% lower. Overall, many customers associate higher prices with quality service, so offering added benefits motivates them to keep coming back.

Increasing customer retention rates by just 5% can boost your profits by 25% to 95%!

5. Gain critical insight and feedback

Part of winning over customers is providing an exceptional customer experience, which requires listening. In past surveys, 97% of consumers said they are somewhat likely to become more loyal to a company that implements their feedback, while 55% of consumers said they’re not likely to continue being a customer of a company that ignores it. Through the use of mobile analytics, you can go beyond the verbal or written feedback that a user gives you and actually identify trends or patterns in behaviour, which will offer even greater insight as to what makes your users tick. 


Interested in using Forage to improve user retention on your mobile application? Integrate in 5 minutes and benefit from 1 million free sessions per month. Improve user retention.