Retention rate is one of the most important stats for measuring the success of your app.
A healthy retention rate indicates that you’re converting new signups into committed users. A low retention rate suggests new app users don’t see enough value to stick around.
“Understanding your app’s retention rate, and how it stacks up to the benchmark rates seen in your vertical and across the larger mobile ecosystem, is an essential part of figuring out your customer engagement and retention strategy,” says Todd Grennan, Senior Content Producer at Appboy.
The best way of gauging your performance is by comparing your own stats with app retention benchmarks in your industry, and then across the larger mobile market.
First, what is retention rate, and why does it matter?
Your retention rate is the percentage of people who continue to use your product or app over a period of time. High retention would point to users who love your app and return to it often. It is the inverse of user churn—if your 90-day retention rate is 25%, then your churn rate would be 75%.
Keeping track of your retention rate and comparing it with the competition is important for a number of reasons.
Retention rate can be a much more insightful metric than downloads or user acquisition, because it measures the stickiness of your product. Installs are irrelevant unless you retain those new users, after all. Analyzing user retention by cohort allows you to gain a deeper understanding of user behavior, and determine possible causes for significant changes or trends.
Cohort analysis is where you determine how users who downloaded your app around the same time compare with other clusters of users.
Tracking your retention rate is also useful for revealing growth trends and forecasting potential revenue. The metric can even inform your high-level planning.
What are the key benchmarks for app retention?
Given the number and variety of apps available today on iOS and Android, it’s difficult to pin down a baseline app retention rate across all categories and platforms.
However, we can combine data from a few research studies to get a solid figure.
- In a study of more than 1,000 apps on iOS and Android, Statista found that the average day-one retention rate is 25.3%
- Among apps using Adjust technology, the average day-one retention rate was 26.5% across all verticals
- AppsFlyer took a sample of 6 billion installs and found an average day-one retention rate of 24.33%.
In other words, anywhere around 25% seems like an average benchmark for day-one retention.
Another key milestone in user loyalty is the end of week one. Compared to that first day after installation, day seven retention rates tend to be much lower, but many developers run retargeting campaigns to encourage further engagement. According to Adjust, the average day-seven retention rate is 12%.
Regarding long-term retention, it’s a good idea to look at day 30. Market research shows that if someone sticks around this long, there is a good chance they will continue using your app.
In terms of benchmarks, here are some average day 30 retention rates:
- 5.7% from Statista
- 6.5% from Adjust
- 3.36% from AppsFlyer
So, it looks like a good benchmark for day 30 retention is around 5% across all verticals.
Trends in mobile app user retention
Of course, global averages only provide a very rough target for app retention. To figure out whether your app is performing well or underachieving, it’s necessary to take a closer look at the numbers.
For example, most studies show that app retention is currently slightly higher on iOS than Android. It’s worth noting that rates fluctuate over time, as well. On iOS, retention rates have been increasing recently, while Android saw a 16% drop in day 30 user retention within the last full year according to AppsFlyer.
Retention rates also vary worldwide; Japan has an average 30-day retention rate of around 5.8%, while in China, only 1.22% of users stick around for a month. Retention rates are considerably higher in developed economies compared to the rest of the world.
Mobile app retention benchmarks by industry
While the trends mentioned above are noteworthy, the best way to segment retention rate data is by industry,
App store data shows that different categories see wildly different rates. To calculate a good retention rate, it’s essential to compare your app with others in the same industry.
To help you calculate a reasonable target for user retention, here is a list of key industry benchmarks:
Shopping and marketplace apps
Mobile users seem to prefer marketplace apps over other forms of e-commerce.
According to Statista, general shopping apps see an average day-one retention rate of 24.5%—a little below average. The day seven benchmark is 10.7%, while the average shopping app sees a day 30 retention rate of 5.6%, or 4.83% according to AppsFlyer.
Marketplace apps like Amazon, eBay, and Poshmark tend to see much healthier retention rates.
The average day-one retention rate in this sub-category is 33.7%. The average day seven retention rate is 16.1%, and the day 30 benchmark is 8.7%.
This is because these platforms offer a very diverse range of products, meaning shoppers are more likely to make multiple purchases.
Financial services and fintech apps
New users of banking apps usually have capital at stake. Some people will be reluctant to commit at first, but users are unlikely to drift away once there is money involved.
Statista research shows that traditional and digital banking apps have a combined day-one retention rate of 30.3%.
Day 7 retention rates here are 17.6% in total, while the combined day 30 benchmark here is 11.6%. This is one of the highest industry benchmarks around.
Apart from banking, financial industry users aren’t quite loyal. Overall, finance apps have an average retention rate of only 22.7%, although Statista says that this rallies to 5.8% by day 30. AppsFlyer offers a lower estimate of 4.51%.
Digital health and medical apps
With medical and digital health apps, the day one averages here are 20% and 20.2%, while the day seven averages are 7% and 8.5%.
For day 30, the figures from Statista are 3.5% and 4%—although AppsFlyer quotes a lower figure of 2.78% for health and fitness.
Apps in this industry that manage to retain more users generally add social features, like the option to compare data with your family or share experiences with other users.
All gaming apps see high retention rates initially. Statista puts the day one figure at a generous 28.7% for hardcore games, rising to a sky-high 32.2% for hyper-casual games. This shouldn’t come as a surprise, as most of these apps aim to deliver a burst of excitement.
However, some users quickly become bored or frustrated, leading to a rapid downturn in user engagement. By day seven, user retention falls to between 7.9% and 12.6%, with the higher benchmark fueled by the addictive nature of social casino games.
By day 30, the benchmark for retention falls to between 2.3% and 5.4%, with casual and mid-core games seeing the biggest tail-off of monthly active users.
Social media and community apps
Retention rates across the social media app category are fairly close to the global average. They start at 26.3% for day one, dropping to 9.3% by day seven. Statista puts the day 30 average at 3.9%, while AppsFlyer quotes 3.11%.
Social apps tend to lose engagement when they deliver a poor user experience, either in terms of in-app functionality or from the perspective of creating a healthy online community.
Using a tool like Sendbird makes it easier to provide a smooth social experience without spending much time on building.
Media and entertainment apps
As a whole, media and entertainment isn’t a strong category for user retention.
The average app in this genre holds on to 22% of users on day one according to Statista. By day seven, the average rate is 8.2%. The day 30 retention rate for entertainment apps is listed by Statista at 3.8%, and at 3.22% by AppsFlyer.
That said, certain niches within this category fare considerably better than others.
For instance, apps that deliver comics see the highest day-one retention rates of any category at 33.8%. In comparison, streaming apps and video players are well below average, with retention rates of 4.7% (via Statista) and 1.73% (AppsFlyer) respectively.
Productivity and utility apps
Persuading new users of productivity and utility apps to stick around is really quite hard.
Productivity apps see a day-one retention rate at a meager 17.1% according to Statista, while utilities don’t do much better at 18.3%. The day seven averages for these categories are 7.2% and 6.8% respectively.
By day 30, the average retention rate among productivity apps is listed at 4.1% by Statista, while AppsFlyer offers a more conservative 2.81%.
Things look even tougher for utilities, with day 30 retention estimated at 3.4% by Statista, and 2.44% by AppsFlyer.
Hotel, travel, and lifestyle apps
User retention in the lifestyle and travel categories is partly influenced by the service or product offered. For instance, people may only use hotel apps for one vacation a year.
This partly explains the relatively low retention rates. Statista’s day one retention benchmarks range from 16.5% for food and drink and 20.9% for general lifestyle. Day seven is a little kinder on all those recipe apps, but travel apps only retain 7.6% of active users.
The day 30 outlook is a little better, perhaps because this captures regular travelers and keen home chefs. AppsFlyer puts food and drink at a healthy 3.93%, while Statista’s estimate is 3.9%. Meanwhile, general lifestyle apps should aim for 4.5%, and travel apps should hope for 3.6%.
How to boost your app’s user retention rates
The benchmarks listed above provide a rough yardstick for success in terms of encouraging app engagement. But whether your industry’s retention rate is above or below the average, it’s worth trying to push it higher.
Here are five proven steps you can take to improve your mobile app retention rate:
1) Make your app more interactive
If you want to retain more active users, you need to give people a reason to keep visiting your app. For example, adding group chat and social features will encourage people to check in regularly with old friends, or connect with new ones.
You can introduce a chat feature now for free using Sendbird.
2) Add push notifications
Adding push notifications to your product allows you to nudge users with gentle reminders and hints about new features.
3) Improve onboarding
If users struggle to see the value in a new app, they will quickly toss it aside. Improving your onboarding experience can reduce the number of people who become frustrated or lost in the first few days, leading to better long-term retention.
Making it easy for users to get live support can really help.
4) Create a re-engagement strategy
You probably have a clear app marketing strategy for attracting new users. But what about a strategy for re-engaging with existing ones? For example, you could use retargeting via email or social media, send out product updates via push notifications, or even deliver special offers.
Better app retention is within reach
App retention starts with user experience. Sendbird can help you achieve a great one. Our chat API allows you to add in-app messaging with minimal effort, meaning users can spend more time interacting with other humans.
Sign up with Sendbird today for a free trial, and discover how easy it can be to improve your user engagement.