Your Mobile App is a leaky bucket. Why Retention is critical for apps

Aug 30

Your Mobile App is a leaky bucket. Why Retention is critical for apps

When you think about the size of the SEO industry, you realize the power of organic search as a cost saving tool in acquiring users.

With organic you have your content out there working for you 24x7x365 and some growth hackers advocate surfacing as much as possible of your data – see slide 12 of this excellent presentation.

“For every model in your database, think about how it can be turned into automatic public-facing content”

leaky bucket algorithm

If organic traffic in established business floats around the 80-90% range, then you can easily calculate that the spend for search would be 10x if organic did not exist – thats are tough way to make a business!!!

Well…the truth is that this is what its like acquiring users in mobile. Sure, you might think you are a ninja growth hacker and know the techniques to launch your appstore presence as if it was a rocket (ha-ha). This post asserts 5-20x uplift in installs.

But really for the rest of us you rely on traditional acquisition techniques and a new thing called ASO (App Store Optimization). For retailers and brands its about pimping the app on your Facebook page, signage/staff training in-store, adverts in print, on TV and then having some utility that triggers the desire to install (a great catalog browsing experience, barcode scanning, catwalk videos etc). Most of this is paid and expensive stuff (with or without Adwords or Facebook ads).

The key is to make sure you don’t have a leaky bucket.

“So what does that mean?” – you say 🙂

Well….its pretty common for internet and direct marketers to understand CPA and LTV, for brand marketers (I’m being cheeky) and other uninitiated I can cover this later but simply put “don’t lose the users you acquired” (“churn” and also called “attrition”).

The BAD NEWS in apps is that churn is 90% over the year. IT GETS WORSE…this study shows that 80-90% of apps are used once. This is not cool – people have several pages of apps and all they use in Email, SMS, Facebook and maaaaybeee Instagram or Evernote or Dropbox (oh and games for the kids).

Because of this its no wonder that apps are still an unknown for many retailers and brands. You can’t compete for a user’s attention span with Facebook if you try to meet it head on. You need to add value for that one unique person, Right-Place, Right Time. Its much better to be valuable once or twice a week when it matters. When they are around your store, When its their birthday or anniversary of joining your Loyalty program or a reminder that something they “Faved” online is just nearby.

Even if you think in the old terms of “It takes 20% of the effort to retain a customer as it does to acquire a customer”, then it make HUGE sense to invest in engagement and retention. I am sure you already think in terms of the lifecycle and community and brand engagement of your customers/users. We will do some more posts soon of common use-cases that are valuable in retention, attrition, churn and engagement.

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