Retention Rate

Mapendo Team
June 10, 2022

In the field of mobile apps, there are different parameters to look at to understand the performance of an app install campaign and how it can be optimized. In this respect, a key aspect to consider is the retention rate.


What Is Retention Rate?

Retention rate can be defined as the percentage of users who continue to use a given app for a pre-set period after having installed it. The retention rate can be calculated by dividing the number of users active on a certain day after the app install by the total number of users who have installed the app in the time period considered.

As a higher retention rate is an indicator of how good your app was at holding the users’ interest for your product, there are different strategies you can take over the course of the app install campaign to increase such a metric.

Firstly, keep in mind that each app and each service are different, so you need to create unique experiences for the users you are targeting and, if needed, also create retargeting campaigns to keep the users’ attention, for instance, if they stopped using the app.

Another important aspect to consider is your creatives, which can actually make the difference for you to retain or retarget users. You should always monitor the results your creatives are bringing, for example with A/B testing, as this allows you to identify the most effective creatives, those that are generating the highest number of conversions.


Why Is Retention Rate Important?

Retention rate is a key metric and it should always be taken care of in any app install campaign, just like the process of user acquisition.

Retention rate is a good indicator of the performance of any app: if more users stay within the app, there is a higher chance of them performing more in-app events as well. This is positive not only because it is a signal of your users’ loyalty and trust in your brand, but also from an economic point of view: more in-app events bring you more in-app revenues, thus increasing the app install campaign ROAS.

Monitoring the app retention rate is also a way of understanding when and why users decide to uninstall the app or stop engaging with it, and which aspects within the app need to be improved for users to continue using it and producing in-app revenues.
In this sense, retention rate is also important as it allows you to analyze the ways in which the users’ lifetime value (LTV) can be improved and increased. In fact, LTV measures the average revenue a user generates over their “life” within the app; for this reason, it is an important indicator of how users are profitable and valuable.

Retention rate is also important in the app install campaign optimization process, as it allows you to analyze the user’s experience inside the app and optimize the campaign toward certain events. For example, if you identify a significant drop in your retention rate at a particular stage in the user’s experience within the app, you could work to increase the number of users sticking to your product even after that point and optimize the app install campaign for that event. This important step in the process of optimization is made possible by the use of A.I. and machine learning algorithms.


What You Need To Know About Retention Rate?

  • Retention rate indicates the percentage of users still using an app a given period after install;
  • Retention rate can be obtained by dividing the number of users active on a certain day after the app install by the total number of users who have installed the app;
  • It is important to estimate the app retention rate as it is a reflection of how many users continue to engage with the app;
  • This is also important from an economic point of view, as more users engaging with your app are more likely to perform in-app events and generate in-app revenues;
  • Retention rate is a good estimate of the overall app performance, and it is also a key optimization tool;
  • You can work to boost the retention rate by creating an app install campaign tailor-made for your target or by testing and optimizing your creatives.