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Did you know that apps lose up to 77% of their active users in the first three days after installation? This problem not only impacts on metrics, but also on revenue and the perception of your brand. Therefore, reducing churn rate is not only a key task, but also an opportunity to strengthen your business.
In this article, you will learn what churn rate is, how to calculate it and, most importantly, the most effective strategies to optimize it and convert users into loyal customers.
The App Churn Rate, or abandonment rate, measures the percentage of users who stop using a mobile application in a given period of time. In other words, it is the number of people who download your app, but uninstall it or stop using it after a certain period of time. Generally, this rate is usually measured in three main periods: 1 day, 7 days and 30 days.
The reasons for users abandoning your app can be very varied, but they usually indicate that the user is not satisfied, has gone to another similar application or has not found what he/she was looking for.
A high abandonment rate, churn rate or App Churn Rate can negatively impact your business. A detailed analysis of this metric will help you make informed decisions to reduce churn and build customer loyalty.
Abandonment rate and retention rate (Stickiness Rate) are commonly confused. Although related, these two concepts are opposites in terms of what they measure:
For example, let's say your app starts the month with 2000 downloads, but by the end of the same month, 400 users have abandoned or uninstalled it: you have an app Churn Rate of 20%. On the other hand, on the other hand, this figure would mean your retention rate is 80%.
Understanding both metrics is essential to optimize mobile user retention and detect problem areas.
Knowing the App Churn Rate of your application can help you understand some important data for your business. The abandonment rate is usually related to the satisfaction of your customers. Therefore, we recommend that you measure this parameter as one of the basic KPI's to know the health of your app.
In addition, the App Churn Rate is also relevant for:
Measuring and reducing this metric will help you build a solid base of loyal users, which is key to sustainable growth.
The App Churn Rate is calculated through a formula that consists of dividing the number of users that have stopped using the app in a given period of time by the total number of users at the beginning of the period and multiplying it by 100.
For example, let's say a cooking products app has 20,000 active users in a month, but at the end of the month, 6,000 people have decided to leave the app:
6,000/20,000 X 100 = 30% dropout rate.
The basic formula already mentioned can be adapted depending on your objectives. For example:
To measure it more accurately, you can use tools such as Google Analytics and specific app analytics platforms.
Of course, the "good" churn rate is the one that does not exist, we might think. However, we must assume that there will always be a certain percentage of users who will abandon your app, for various reasons. Moreover, some studies indicate that apps can lose on average up to 77% of their active users in the first three days after installation.
However, this data is highly dependent on factors such as industry or sector: dating apps, for example, have a high churn rate, while finance apps tend to have a more moderate churn rate. The standard of a "good" churn rate varies by industry, so it is recommended that you look for specific data.
For example, in the gaming industry, it is estimated that apps have a churn rate of up to 70 percent on the first day, rising to values of up to 98 percent on day 30. In contrast, in sectors such as news and current affairs apps, this number drops by up to 8 points, leaving the 30-day app churn rate at 90 percent.
If we try to define an average across all sectors and industries, we could determine that the churn rate on the first day could be around 75%, on the seventh day around 90-93% and on the 30th day at 95-97%.
To avoid a very high churn rate, you need to take into account the most relevant causes. Here is a selection of factors that contribute to a very high app churn rate:
Frustration with the app. The user has not found what he was expecting. Often, in order to try to increase downloads or sales as much as possible, a thousand strategies are devised that can create false expectations in customers. Therefore, it is best to be transparent in persuading users.
Bureaucracy or obstacles. If the application does not offer good, responsive and easily accessible customer service, users or customers are likely to feel lost and dissatisfied. Therefore, consider investing in customer success or customer experience strategies.
Also, assess whether your onboarding is too tedious or asks for too much data, or if your registration process is too long and confusing.
Technical issues. Some technical issues such as failed payments, loading time problems or app weight can lead to higher app abandonment rates.
The important thing is to compare your rate with the benchmarks of your sector and seek continuous improvement. Therefore, we leave you with the 5 most important tips to keep your cancellation or abandonment rate under control.
Calculating the app churn rate is only the first step. Addressing the reasons and keeping it at bay is essential to have a successful app. Therefore, we recommend that you investigate the reasons why users uninstall the app. You can do this through a form or by investigating other KPIs or functionalities of your project.
Design, study and design the whole experience you offer to the user. Take into account all the phases and pay special attention to onboarding, which can determine the user's motivation to continue using (or not) the app.
The user onboarding flow is the set of steps that new users of an app must follow when opening your app. For example, it includes a welcome page, an information page and a registration or login page. The more careful the process, the more impact it will have on your retention.
Using relevant and segmented push notifications will allow you to offer the user an image of fit. It has been proven that getting more loyal and loyal users significantly reduces the app churn rate. In addition, look for other ways to connect with your user and offer them what they are looking for in advance.
Keeping an app updated and offering users new content, new features or exclusive promotions will make your app be perceived as essential. In addition, other factors that are often relevant in terms of abandonment or cancellation rate are the app's weight or limitations in terms of payment methods or features.
Creating loyalty strategies is a good way to lower your app churn rate. Design reward programs, exclusive discounts or unique in-app promotions to keep your users active. You can also consider more innovative options such as gamification or the creation of exclusive membership programs to motivate your users.
App churn rate is a key metric to understand your users' behavior and measure the effectiveness of your app. Constant analysis and well-designed strategies can help you reduce it, improving both retention and overall business performance.
At Reskyt, we help you develop apps that not only encapsulate your ecommerce, but also optimize the mobile experience and reduce abandonment rates. Request your demo and discover how a custom app can transform your business.
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