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Why You Should Start With Churn Analysis For Your Mobile App

“On average, only 25-40% of new customers will re-launch an app after the first week. This number diminishes as time goes on, ultimately falling to 4% one year out.” (Source)

Customer churn can be defined as a metric that quantifies the number of users who have uninstalled an app in a particular time period.

When it comes to mobile apps, the churn rate is an important metric as it helps you measure the pace in which you’re losing your active users. The more users you lose, the more expensive it gets to keep your app running.

An average mobile app loses 77% of users in just 3 days. By the end of a month, 90% of the original users are lost. (Source)

On average, 65% of a company’s business comes from existing customers. Acquiring new customers is 5 times more expensive than retaining existing customers (Source). The fact is, by increasing customer retention by 5%, you can increase your profit by at least 25%. (Source) The expense incurred in operating costs is also lesser as there is no need to convince an existing customer to choose your products/services over your competitors – thus saving both time and money. Even a slight drop in the churn rate can benefit your business in a great way. By measuring and analyzing churn, you can prevent and sustain it in various ways.

How to measure churn?

1. Monitor churn numbers on a regular basis

Measuring the churn rate is the first step that you should take. Churn rate refers to the number of users who stop using your app for a specific time period. A successful app is one where the number of new customers is greater than the number of customers who uninstall the app.

You can also track your monthly or annual churn rate to know where your app stands.

2. Find out where users are dropping off

The next step is to figure out where your users are dropping off. You can analyze your funnel reports to have a clear understanding of how users are navigating your app and exactly where they stop before making a conversion. You’ll get answers to common questions like why are you losing users after the onboarding process or what exactly users were doing before they became inactive.

These data points will help you decide on your next course of action to see how you can change your app user’s path from churn to conversion.

3. Identify the causes of churn

Once you have located the dropoff points, it will be easier to understand the main reasons why your app is being uninstalled. It could be because of poor customer service, bad onboarding, lack of customer success or other natural causes.

A survey states that the top 3 reasons for app uninstallations are forced social logins, privacy concerns or intrusive advertisements. (Source) When you know why users are abandoning the app, it becomes easier to optimize their experience to prevent it.

Reduce Customer Churn

Once you predict it, how do you prevent churn?

1. Re-engage with users who are slipping

The most important step for every business to prevent churn is to identify the customers who are about to churn and strategize ways to keep them on board. There are various tracking tools available that can help track app uninstallations and churn analysis.

Apart from that, a simple way to understand a customer is about to churn when you see that they are not using your app too often like they used to – be it consciously or unconsciously. Re-engaging these loyal and profitable customers is important as it is also more likely that they are the ones who will respond to what you have to offer – be it a phone call, a special discount or package.

Customer segmentation plays a very important role here. Segmenting visitors based on their interests, preferences, actions, progress, and results make it much easier to send targeted messages or offers to keep them engaged. User retention platforms like SmartKarrot have the SmartSegmentation feature that helps you segment your audience with the utmost ease and then customize your engagement actions.

2. Personalize your marketing strategies

If you’re reaching out to your loyal customers for the purpose of re-engagement, it shows that you’re investing your time to help them get the most out of your service. Therefore, for this purpose, a generalized approach is not going to work. There needs to be a sense of personalization in your marketing strategy. You can personalize your message in the following ways –

  • Contextual Marketing – Every user may have a different reason to use your app. For example, if you have a news app, there can be some users who are only interested in articles related to sports while some may only browse for business news. Providing the right content to the right customer is integral to keeping them engaged.
  • Location-based Marketing – Personalized messages based on the user’s current location are an effective way to capture user attention in her context. It not only improves overall user experience but also opens up options for increasing app revenues. With high relevance and precision timing, this personalization method can easily draw attention and keep your users engaged.
  • Rich push notifications – Push notifications are an effective way to engage with users in real-time by sending them regular updates and reminders about what your app has to offer. With personalized messages, animations or images, push notifications makes your message attractive; encouraging users to take the desired action. You only have to ensure that the message you send out is relevant. Use a push notification service provider such as SmartKarrot to send the right message through the right channel.

                                 Source: createanet.uk

3. Go through your app value proposition

In order to prevent churn, your most important weapon is the app itself and the value it provides to the users. So, go over your app value to see whether your customers are using the app for the same purpose you created it in the first place. With millions of apps on the app stores, you need to have a compelling value proposition for users to choose your app over others.

You can also analyze the user’s actions on your app to observe if the functions they are looking for to use in the app are highlighted in the app interface. Remember that the app value proposition needs to be iterated over time so that you stay ahead of the competition – your answer should always be ‘yes’ when you ask yourself if the world really needs your app.

4. Make use of predictive analytics

Predictive analytics actually helps you look into the future and analyze users that are more likely to churn. With the help of this prediction, you can shift your focus from being reactive and take a proactive approach to engage with your app users. By sending out the right message at the right time and to the right person can help you influence their next course of action.

Understanding the problem of the app users and providing customer-centric solutions can be easily done with the help of AI. Machine learning algorithms to extract knowledge from app users and generating solutions can help bring a great positive change in your churn rates.

Customer churn is important to consider as it has a direct correlation with your revenue. Reducing churn by focusing on customer retention is a better and profitable strategy when it comes to growth than spending only on new acquisitions. Using a customer churn analysis platform like SmartKarrot provides a comprehensive set of features for user retention and engagement. With cross-device targeting, minimal coding and the option of infinite scalability, it can take your app to new heights.
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Responses

  1. Avatar
    Sara Lloyd

    No surprise to see the top 3 reasons for app uninstallations here, this is something I suspected long ago and have since changed the way my apps are designed. I try to keep them simple and clear with no login required unless necessary, this varies between apps. I’ve reduced the amount of ads, too. Just one anchor ad which can be clicked away and definitely no interstitial or timed ads. If anyone is like me, they just close the app and uninstall when they pop up.

  2. Avatar
    Zack Wyatt

    I haven’t monitored churn rate at all since the launch of my app a few months ago, I just see positive numbers for downloads and uninstalls and have been happy with it. This article is correct, though. I should start monitoring churn among other metrics if I’m serious about my project. I have no idea why people have uninstalled and I need to find out so improvements can be made. Good tips here and I’ll be working even harder from now on, thanks!

  3. Avatar
    Tracey Webber

    Good article with some important advice. I combat with an interactive tour of the app to ensure users know where everything is and what they can do. Next, I use push notifications to entice those who have been inactive for 24 hours to claim a small bonus. It has been working well and I’m happy with the figures I see. I can imagine contextual and location-based marketing will help a lot more, good suggestions!

  4. Avatar
    Dean Baker

    Churn was tough to manage for me. My service was kind of a one-and-done type deal, people would get what they needed and leave. After adding some more features and introducing some retention methods such as gamification and a loyalty program, the issue has mostly gone away. The tools offered by SmartKarrot here will definitely help you, too.

  5. Avatar
    Paul Fowler

    Oh, I couldn’t agree more with this. When I discovered what churn was and started tracking it, I quickly found that a lot of people stopped using the app at the same point. The layout was bad and confusing but I didn’t think so at the time. Since redesigning and implementing in-app points, churn is much lower.

  6. Avatar
    Freddy Lashley

    I’ve discovered churn recently and how to track it. Now that I have access to this data I can see what customers are at risk and why, very invaluable information which has helped me fix problem areas on the app and reach out to users encouraging them to come back. These tips are great as well, location-based marketing might work really well for me.

  7. Avatar
    Patrick Langley

    Churn was a nightmare for us in the early months of our app but we didn’t know it was going on until we read about it and started to track it. The data helped us discover some rather poor design choices and other confusing elements which have since been remedied. Improvements are showing but there’s still more to be done, I like the idea of location-based marketing to improve the experience a little more.

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