How to Increase Customer Retention within the App

Customer retention marketing is essential at every stage of your app business. As soon as you start getting users, you need to think of the ways to retain them. Our guest author Sam Makad, who helps small & medium enterprises to grow their app businesses, shares app’s potential issues that cause uninstalls. Keep them in mind when building your customer retention strategy.

Customer retention correlates directly with churn rate which ordinarily refers to the percentage of customers that stopped patronizing the app itself or services of a company during a set period of time. Is there a way for any brand to tackle it? The main reason brands shouldn’t take the case with kid gloves is that it’s an ascertained fact that it costs more to acquire a new customer than to retain an existing one.

Understanding of customer churn rate

The customer churn rate is usually obtained by dividing the number of customers you lost in a quarter by the number of customers you had at the beginning of that quarter. It’s one of the key metrics in understanding whether your company is retaining customers.

how to retain customers formula

To really give credence to the importance of customer retention, The Harvard Business Review reported that research done by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by 5% enhance the increase in profits between 25% to 95%.

A constant overview of the churn rates by customer segment clearly depicts which types of customers are at risk and which may require your timely intervention. It’s an apt and fundamentally simple metric that tells you a lot about when and how to improve customer interaction.

Related to the mobile world, the lifeline of any app depends on the number of customers it’s able to retain over a particular period of time.

According to Statista, the average three-month user retention of mobile apps worldwide as of the second half of 2018, showed that 37 percent of global mobile media and entertainment app users were using apps one month after they had downloaded them. The retention rate, however, decreased to 23 percent at the three-month mark.

Why users uninstall mobile apps

Before you get into retention strategies for customers, it’s important you get yourself abreast of the reasons that are responsible for your app customer churn rate.

1. Quality

Marketers during the course of marketing campaigns tend to promise a lot of goodies in the bid to attract and eventually convert new customers. Some of these promises may not be kept at the end of the day.

The quality of your app regards the product itself and the service you promise it will offer should not be toyed with. Your word must be your bond.

Customers tend to abandon any app that falls short of its expected quality in droves. The churn rate from such a case will hit a brand like a thunderbolt.

A good case in point is the OkCupid dating app. The initial splash screen looks great and is well-designed. It has a clear value proposition and an easy-to-find call-to-action, but what about the quality of service, does it really do what it says?

The example of bad consumer experience
The first screen new OkCupid users encounter. Image source: OkCupid.com

Users are given two options for joining the app. It’s free to use, but still requires users to create an account:

The first option is a Facebook sign-in. The other is to use a personal email address.

Registration via Facebook can help to improve customer experience
Account creation for OkCupid gives two options. Image source: OkCupid.com

Since Facebook logins can streamline not just signup, but the setup of dating mobile apps (as users can automatically import details, photos, and connections), many users choose this option. But there’s a problem with it: after seven clicks to connect to Facebook and confirm one’s identity, the user encounters a problem.

ideas for improving customer service
After connecting to Facebook, users still encounter an error signing in. Image source: OkCupid.com

One of the main reasons why users choose a Facebook sign-in is because of how quick and easy it’s supposed to be. What you may, however, encounter with this OkCupid app is an inability to connect to Facebook and you will still have to provide an email you didn’t want to bother yourself with at the initial time.

This is obviously not a great first impression OkCupid leaves on users. What makes it worse is that we know there’s a lot more work to onboard with the app. Unlike some competitors that have greatly simplified signup, OkCupid forces users into a stressful onboarding experience as well as a more lengthy profile configuration.

Users that find this process cumbersome will definitely seek better offers elsewhere.

Learn how to analyze the reasons of uninstalls and deal with them without ruining your app conversion rate.

2. User Experience

Difficulties encountered by customers in the use of your app may lead to their churning and completely abandoning your product for alternatives which are readily available in the market.

According to Oracle’s study, almost 9 in 10 customers have abandoned a business because of previous poor experience. You actually won’t expect anybody who finds an app a very big jigsaw puzzle or rocket science to use it on a regular basis.

Discover what to pay attention to in your UX design to make users stay.

To fix this issue, try churn analysis tools. Using churn analytics software you can quantify the value of customers, measure churn, and understand why it occurs in the first place. It’s able to integrate into a company’s existing CRM and support systems enabling you to measure the loss of customers. Most churn analytics track individual user events to reveal the user’s journey. In the end, you will be able to compare the behavior of churned customers with that of retained customers to reveal what went wrong.

3. Customer Experience

Poor client experience in connecting with the other segments of your brand may likely lead to churn. Customers want to be appreciated and not treated like misfits.

A good approach to improve customer interaction can be getting in touch with users through their reviews. If they are leaving complaints about the app’s features or poor app performance — assure them that you care about their issues. Sometimes a sincere reply can make a miracle, while ignoring your customers will lead to their frustration and churn. Moreover, their negative reviews will remain on your app page as a warning for your future customers.

And here is an example — the featured review of a Lingokids app. It shows the disappointment of a customer and can be a bad case for potential customers. Luckily the developer showed their compassion, and it may have a positive impact in the future.

Replying to customer reviews helps to increase customer satisfaction
The featured review with the developer response. Source: Apple App Store

If users don't have positive experiences — feeling comfortable and at home — while dealing with your product, they won't want to continue hanging around.

A proven way to improve your customer experience is co-browsing , that makes your customers stick to your app. Co-browsing enables your users to quickly have a session with your customer service agent if they have challenges using your app.

73% of U.S. consumers say that customer experience is a very important factor in their purchasing decision, so much so that even if they love a company or product, 59% will still walk away after several bad experiences and 17% will walk away after just one bad experience.

Looking for ways to improve your customer experience? Learn how to deal with their feedback

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Churn may be generally considered a negative index of a company’s performance but it’s really a metric that shows how well you’re managing your customer relationships. A high churn rate is, on the other hand, the result of poor customer acquisition efforts.

However, churn should not be viewed as outrightly bad. There are situations where unprofitable or uncooperative users churn. A thorough understanding of the user’s journey and the application of analytics to segment users can help you discover which customers are most valuable and work towards retaining them.

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