We all have heard of the “leaky bucket” as it relates to user retention. Simply put, if the bucket is not holding any water, no matter how much water you pump in, the bucket will soon be empty. Similarly, spending time and money to acquire customers for an app before we know we can retain users, will lead to zero growth.

But, what is a good retention rate for an app? There is no single number as the retention rates vary depending on the type of application. For example, a user will stay with a social networking app for a long time if there are enough friends to interact with, but the same user will stop using a dating app after finding a date. Retention rates may also differ across personas within an app. A business traveler is likely to use a travel booking app at least once every 30 days, while a pleasure traveler uses it less often. Based on the type of app and the persona, determine if you want to focus on a daily, weekly or monthly retention.

First and foremost, the fundamental determinant of retention is whether the app meets “a key need or solves a key pain point” of the target user and does the app solve the problem significantly better than other alternatives. While this is a fundamental and mandatory determinant, this alone cannot guarantee that users will come back to your app.

In this article, I am going to look at ways to maximize retention at each phase of the customers’ journey starting with on-boarding the user.

Onboarding and Activation: New Users
Keep onboarding to a minimal number of steps and ensure that the user experiences the key value proposition in the shortest amount of time possible after installing the app. In today’s hyper-competitive app world, where it is hard to get users’ attention, it is important that users experience value within a few minutes or even seconds during the first use. Some considerations to achieve this:

Create an effective onboarding experience

1. Have a clear definition of what successful onboarding and activation is for your app. Unless the user has experienced the core value of the app, it should not be considered a successful activation.
2. Personalize and adapt the onboarding experience to the users’ specific interests. E.g., Spotify lets users choose music preferences during onboarding with the list of preferences dynamically changing as the user picks an option in the list.
3. Keep the user interested and motivated by tapping into users’ emotions through visuals, content, messaging, etc. to make it appealing to the user during on-boarding.

Eliminate friction wherever possible

1. If it is not mandatory, put off steps such as user registration and subscription until after user understands the value of the app. If user registration is required, use social logins.
2. Do not ask for system permissions until they are needed. When requesting for a permission, ensure it is clear to the user why the permission is required.

Focus on the core experience during the first session

1. The core experience will determine the value users get from the product. Associate this core experience with the North Star Metric for your app. e.g., Spotify: Listen to a song, Waze: Complete navigation for a route.
2. Ensure user experiences the core function of your app early on during the first session. e.g., Headspace is a meditation app that ensures user experiences a short meditation session within a couple of clicks after installing the app.
3. If the app. is a paid subscription, provide first few days free so the user can experience the app. e.g., Netflix and Hulu provide a free trial.
4. If the app’s monetization is ad-based, do not show any ads until the user gets the value of the app.
5. Do not worry about exposing the user to every feature during the first few sessions. Help user to learn the app progressively by providing relevant tips as the user explores new areas of the app.

Monitor drop-offs during onboarding

1. If the user drops off in the middle during onboarding, which often happens when the user is required to enter a lot of information, email the user or send a push notification reminding the user to complete onboarding. Send the notification the same day when the app is still fresh in mind for the user, e.g., The shopping app Wish sends a notification within 15 minutes if you abandon a purchase in the cart.
2. Monitor drop off rates at each step and try to assess what is causing the drop-off. Reduce drop-offs through continuous experimentation and A/B testing.

Coming back to the app: Returning users
Once the user is onboarded and activated, it is very important that the user gets back into the app the second time, third time, etc., so the user continues to realize and understand value.

Understand why new users do not return

1. The experience in the first few sessions will determine if the user will continue coming back to the app.
2. Create cohorts based on actions performed in the first few sessions Eg.: In the case of Spotify, users who created a playlist or users who listened to one full song.
3. Identify any co-relation between actions performed in the first few sessions and users returning to the app.
4. Come up with hypothesis why some users return while others don’t.
5. Use a tool like usertesting.com to observe user behavior and further confirm the findings from the quantitative analysis.
6. Continuously tweak and conduct A/B tests to determine changes that can increase returning user count.

Habit formation: Getting hooked
Once you know users have experienced the core value of the app in the first few sessions, the next step is to understand what actions can lead users to create a habit around your app. Some considerations:

Internal and external triggers

1. Identify internal triggers for which the user could return to your app. Eg.: When a user is stuck in traffic, the user wants to know if there is a faster route.
2. Align external triggers such as notifications with the identified internal triggers. The external triggers should be goal oriented with a clear call to action and when acted upon, should satisfy the internal trigger, e.g., When a Waze user is stuck on high way 5 and if there is a better route, send a notification “Accident on highway 5, want different routes?”
3. Once user responds to the external trigger, continue to provide the rationale, reasoning, and motivation to complete the action. Eg.: In the case of a faster route, show the time that will be saved by using the suggested route.
4. Completing the action should lead to users realizing real, immediate value and instant gratification.

Create habits around your app

1. As users continue to respond to the external triggers, provide an experience which leads to users drawing a connection between the internal and external triggers. In the Waze example, users should get into the habit of opening Waze whenever traffic is bad on their route.
2. If applicable to your app, try to get the user to develop a routine. E.g., Headspace is a meditation app that prompts the user to set a regular time for meditating.
3. Create cohorts based on usage frequency and understand the difference in usage between power, moderate and casual users.
4. Come up with hypothesis how you can get moderate users to become power users and casual users to become moderate users.

Get users to invest in your app

1. Get users to slowly invest in the application. e.g., Save preferences, add to favorites, etc.
2. These investments should make the user experience better, increase convenience and tightly integrate into users’ day-to-day activities. e.g., Spotify playlist, Waze favorite locations.

Get inactive users back: Resurrection
Users become dormant or inactive when they do not come back to the app. after a certain duration. As a rule of thumb, if you expect daily engagement with an app, you can consider a user dormant if the user does not come back for 3–4 consecutive days. Similarly, if you expect weekly engagement with an app., you can safely consider the user to be dormant if the user does not come back for two consecutive weeks.

1. Segment the dormant users based on the persona and any other common attributes.
2. Find effective ways to resurrect dormant users for each segment.
3. Once resurrected, try to get the user hooked into the app. again.

To conclude, retention should be a priority across the product lifecycle from determining product/market fit to early growth and then to late growth.