keep-calm-the-answer-is-always-42

What’s the ONE app you should measure your retention against?

A lot of our customers ask us what “good” retention is for a mobile app. As evidenced by the number of Quora threads on this subject, it’s a pretty common enquiry. If you’re looking for the answer, it’s 42.

In all seriousness: if you’re looking for a magic number, we don’t have one for you (sorry…incidentally,  42% would probably be a pretty decent 30 day retention). The truth is, there aren’t any super well-established benchmarks. We’re working on digging up some more data points for you, and can hopefully show you our findings in a future post.

In the meantime, here’s what you need to know about measuring retention the right way. And some food for thought: maybe you shouldn’t care too much how everyone else is doing anyway.

Because in the end, the most important app’s retention that you should be measuring up against is your own.

Let’s start with the basics: what exactly is retention, why should you care, and how do you measure it?

Gotta keep them coming back

Retention is the most important metric for understanding how your app is doing. Back in the day, app people and investors thought daily active users and monthly active users (DAU/MAU) were a big deal — and then they realized they were wrong. If you have lots of people using your app, but they’re only coming back once or twice and then leaving forever, then pretty soon you’re going to run out of people and your app will tank. App developers realized it’s important to keep people coming back, and that it’s cheaper and easier to keep existing users than to recruit new ones.

The most useful way to look at retention is by what we call “day N” retention. Day N retention is expressed as a percentage of users who have come back and used the app N days after signing up/first using the app (on Day 0). The time period you want to look at is very app-dependent. Typical times that mobile games look at are retention on day 1, day 7, and day 30. For other types of apps, retention at day 90 or even day 365 are important, too.

If you’re a productivity or social app, you’re interested in both the shorter term and longer term retentions. If, for example, you’re a travel-related app like Airbnb, you’d be more interested in 90 or 365 day retention — people aren’t traveling all the time, and probably won’t need you again in the first 30 days.

Measuring mobile app retention by day N after signup allows you to group users by their start date. This provides more granularity and lets you compare cohorts that started on different versions of your app, or after a particularly aggressive marketing campaign, etc.

Hint: it’s not one-size-fits-all

So, what’s ‘typical’ retention, and what’s ‘good’? Quality data is scarce: all of the stats that we found did not use day N retention, but rather used rolling retention or other metrics that are far less informative, so keep that in mind whenever you see retention metrics.

Bottom line: there is no magic retention number you need to hit, and then you will make boatloads of money. It’s also debatable how useful it is to constantly compare yourself to competitors or your vertical’s ‘average’ retention. At best, these benchmarks give you a rough idea of how you’re doing — but every app is different, even within verticals. You have to know what success means for your app.

In the end, the best retention benchmark you can use is your app’s previous performance. You always want to be improving — it doesn’t make much of a difference if you’re below or above the industry average. Are you going to stop trying to make your app better once your retention is higher than that of all of your competitors? That’s what I thought.

So pay close attention to your retention rates and constantly test new ways to continue pushing that bar up. One great way to start is to understand what your really engaged users are already doing, and then optimize around encouraging that action. Best of luck!