User retention rate

User retention rate

User Retention Definition

User retention for digital products refers to the percentage of users who continue to use a digital product or service over a given period of time. It is a measure of the product or service's ability to retain its users.

How to Measure Retention Rate

Retention rate is a measure of how many users continue to use a product or service over a given period of time. The simplest way of measuring  is “calculate the percentage of users still with the app over time”, which is called the Retention Rate. But it is not as simple as it looks as there are multiple factors to deal with to get to the actual retention rate for your app. You need to think about questions like - When do you say users are still with the app? What is the time window to be considered? Is it enough to check how the new users are retaining or you need to see all the users? These should be decided based on the kind of business one does.

Here is a detailed read from our experts on how you can measure retention rate for your own app. 

What is a Good Retention Rate

There is no particular standard to decide a good retention rate. Retention rate can vary depending on a number of factors such as the type of app and its intended audience. To understand whether your app’s retention rates are good or not, compare them to industry benchmarks. According to a report by Appsflyer, the average retention rates across all app categories are:

Day-1 Retention: 31.7%

Day -7 Retention: 14.2%

Day-30 Retention: 6.8%

How do you Ensure Good User Retention

Digital products, such as apps or websites, face unique challenges in terms of user retention. Because there are so many options available to users, it can be difficult for a digital product to stand out and retain its users over time. In order to improve user retention for digital products, businesses need to focus on providing a high-quality, engaging experience for their users.

  1. Effective Onboarding

One way to improve user retention for digital products is through effective onboarding. This involves providing users with the information and support they need to get started with a product or service, and helping them to quickly understand its value and benefits. This can be done through a variety of methods, such as providing tutorials, training materials, and personalized support.

  1. Creating Aha-moments

To create aha-moments, products can focus on providing a high-quality user experience that quickly demonstrates the value and benefits of the product or service. While creating an aha-moment early on during a customer journey is very critical, it is also important for products to continuously create aha moments for users throughout their product usage journey. This helps in keeping the users retained for longer.

  1. Deeper Contextual Engagement

Another important factor in user retention for digital products is engagement. This refers to the level of interaction and involvement that users have with a product or service. To encourage engagement, businesses can provide regular updates and new features, as well as rewards and incentives for continued use.

  1. Personalized Experiences

In addition to onboarding and engagement, there are several other strategies that businesses can use to improve user retention for digital products. For example, businesses can offer personalized recommendations and experiences based on user behavior and preferences. They can also provide easy ways for users to share their experiences with others, such as through social media or referral programs.

  1. Habit Formation

Habit formation can help in user retention because it allows users to develop a routine around using a product or service, which can make it more likely that they will continue to use it in the future. When a user forms a habit of using a product, they are more likely to continue using it even if they are not consciously thinking about it, because the behavior has become automatic. Understanding the actions that make users come back to the product is the core of creating habits. Contextually influencing other users to take these actions creates long lasting habit formation.