Mobile apps have become an essential part of our daily lives. However, the reality is that many apps need help to retain users, leading to a significant mobile app churn rate.
According to the Buildfire statistics, in 2024, 71% of app users stop using the app within the first 90 days after download. This shows how important it is to make your app better and more engaging to keep users interested. Incorporating Nudges and gamification features offered by Nudge can significantly enhance user engagement and retention.
Globally, the mobile app market is expected to reach $6.3 trillion by 2024, with users spending about 2 hours, and 51 minutes daily on apps.
Churn rate directly impacts revenue, as a higher churn means fewer users to monetize. Lowering the churn rate by just 4% can increase revenue by $11,150 in six months. Understanding user behavior helps refine strategies for better retention and app success. Let’s discuss this in detail!
What is the mobile app churn rate?
The mobile app churn rate is the percentage of users who stop using an app over a specific period. High churn rates indicate that users need to find more value in the app to continue using it. To improve this, follow our Guide To Reduce Customer Churn – 10 Strategies With Examples
A high churn rate negatively impacts a business by reducing the number of active users, which directly affects revenue streams from ads, in-app purchases, and subscriptions.
For example, Spotify relies heavily on user retention for revenue. If Spotify experiences a high churn rate, it means fewer users subscribing to their premium service, leading to significant revenue loss. Reducing churn by improving user experience and satisfaction is crucial for maintaining and growing revenue.
Churn Vs Retention. What's the difference?
Churn rate is the percentage of users who stop using an app over a specific period. It highlights user attrition and indicates potential issues with the app’s value or user experience.
Retention rate is the percentage of users who continue to use an app over a specific period. It measures user loyalty and satisfaction, indicating how well an app retains its users.
Also read: Mobile App Retention Rate Stats and How to Improve Them for 2024
Key Differences
- Focus: Churn focuses on loss, while retention focuses on loyalty.
- Measurement: Churn rate is calculated by dividing the number of users lost by the total number of users at the start of a period. Retention rate is calculated by dividing the number of users retained by the total number of users at the start of a period.
- Impact: High churn rates negatively affect revenue and growth, while high retention rates indicate a strong, loyal user base and potential for increased revenue.
Example
For a streaming service like Netflix, a high mobile app churn rate means many users are canceling their subscriptions, leading to lost revenue. Conversely, a high retention rate means users are staying subscribed, reflecting satisfaction and steady revenue.
Churn is when customers leave; retention is when they stay. Nudge increases retention by engaging users with features like nudges, gamification, surveys, stories, and videos.
Formula to calculate mobile app churn rate
Did you know that 25% of users abandon apps after just one use? It's crucial to track and understand your app's churn rate to see if things are slipping out of control. If you've never calculated it for your business, here’s the formula you need:
Churn Rate = (No. of users lost / Total number of users at the start of the period) x 100
Daily churn rate tracks the percentage of users who leave your app each day. This metric is useful for apps with high daily engagement, such as social media or gaming apps.
Daily Churn Rate = (Number of Users Who Left Today/ Total Number of Users at the Start of the Day)×100
Example:
If your app had 1,000 users at the start of the day, and 20 users left during that day:
Daily Churn Rate= (20 / 1000)×100=2%
Monthly churn rate measures the percentage of users who leave your app each month. This is a standard metric for subscription-based services or apps with longer user engagement cycles.
Formula:
Monthly Churn Rate=(Number of Users Who Left This MonthTotal Number of Users at the Start of the Month)×100
Example:
If your app had 10,000 users at the start of the month, and 500 users left during that month:
Monthly Churn Rate=(500 / 10000)×100=5%
Annual churn rate tracks the percentage of users who leave your app over the course of a year. This is useful for apps with long-term user engagement, such as financial or productivity apps.
Formula:
Annual Churn Rate=(Number of Users Who Left This YearTotal Number of Users at the Start of the Year)×100
Example:
If your app had 50,000 users at the start of the year, and 10,000 users left during that year:
Annual Churn Rate=(10000 / 50000)×100=20%
How do I know if the mobile app churn rate is too high?
To determine if your app churn rate is too high, compare it with industry benchmarks. Generally, a monthly churn rate below 5% is considered healthy. High churn often indicates issues with user experience or value proposition.
Monitoring churn alongside metrics like user feedback and session length provides a clearer picture. A low churn rate signifies higher customer retention, increased revenue, and stronger brand loyalty. Reducing churn is crucial for sustainable growth and long-term success.
Nudge helps B2C industries lower app churn rates by sending personalized experiences and in-app messages that match user behavior and preferences, keeping users interested and happy.
With automated campaigns and A/B testing, Nudge fine-tunes communication to meet user needs effectively. It also provides insights and collects feedback to quickly address any issues, leading to constant improvements and a better user experience, which increases retention rates.
Understanding the mobile app churn rate across different industries can provide valuable insights into how your business compares and where improvements can be made. Here’s a detailed look at the average churn rates for various industries:
How to Analyze Mobile App Churn
Know What Churn Means: Churn basically means when users decide to leave your app. It could be they haven't used it for a while, they deleted it, or they stopped paying for it.
Collect Data:
"Data really powers everything that we do." - Ginni Rometty, former CEO of IBM
To understand why people are leaving, you need to gather information about how they use your app. This includes things like what features they use, how often they open the app, and if they're paying for any extra stuff.
Utilize Nudge’s feature of surveys to instantly receive feedback from users.
Sort Users: Not all users are the same. Some might use your app a lot, while others might only use it once in a while. Sorting users into groups helps you see if certain types of users are more likely to leave.
Look for Patterns: Once you have all this data, you can start looking for patterns. Are there certain things that often happen before someone leaves? Maybe they stop using a particular feature or they don't open the app for a few weeks.
Study User Behavior: It's important to understand how people are using your app. Are there parts that are confusing or hard to use? Are there features that people really love? Identifying these helps pinpoint why users might be leaving. Here are 10 key mobile app user engagement metrics you must measure to gain these insights.
Listen to Feedback: Users often tell you why they're leaving reviews or messages. Pay attention to what they're saying. If lots of people are complaining about the same thing, it's probably something you need to fix. You can use an in-app survey feedback feature on your mobile app to get feedback instantly.
Compare Users: Compare the people who are leaving with the ones who are sticking around. What's different about them? Maybe people who use a certain feature are more likely to stay, or maybe younger users are leaving more than older ones.
Predict Who Might Leave: Using fancy tools, you can predict which users might leave next. This helps you focus your efforts on keeping them around.
Do Something About It: Armed with all this information, it's time to take action. Fix any problems you've found, make your app better, or give users a reason to stay.
Keep Checking: Churn is an ongoing thing. Even after you've made changes, keep an eye on things. Keep checking how people are using your app and keep making it better based on what you find out. It's a continuous process of improvement.
Strategies to Reduce Mobile App Churn Rate
Reducing the app churn rate means keeping your users happy and engaged so they don't stop using your app. Here are some simple strategies to use:
Improve Onboarding Experience
Ensure that first-time users have a smooth and enjoyable experience with your app. Use Nudge’s onboarding tours, checklists, and in-app messages to give clear instructions and easy-to-follow guides. This helps users see the value of your app right away.
Enhance User Engagement
Keeping users interested in your app is key to reducing churn. Regularly update your content, add new features, and send personalized notifications. Nudge’s gamification tools, such as point systems, challenges, streaks, and referrals, can encourage users to interact more. Fun features like quizzes, polls, and casual games like Spin the Wheel and 8 Ball Pool also help keep users engaged.
Here are 7 user engagement strategies to achieve your goals, along with 30 top user engagement tools to improve app experiences.
Provide Value
Always give users what they need and solve their problems. Use Nudge’s scratch cards, coupons, and coins to offer special content, discounts, or rewards. This keeps users coming back to your app.
Optimize App Performance
Make sure your app works well on all devices. Fix any bugs or issues quickly to avoid frustrating users. Use Nudge’s spotlight feature to highlight important updates or fixes.
Personalize Communication
"Think like a wise person but communicate in the language of the people."
- William Butler Yeats, Former Senator of the Irish Free State.
Use data to understand your users and send them personalized messages. Nudge’s in-app messages can help you send targeted offers and recommendations based on user’s preferences and behaviors.
Collect and Act on Feedback
Encourage users to share their thoughts and listen to their suggestions. Use Nudge’s feedback survey to gather this information and make improvements based on what users want.
Offer Incentives and Rewards
Keep users motivated with rewards and loyalty programs. Use Nudge’s gamification features like scratch cards, coupons, and coins to give discounts, coupons, or special access to loyal users or those who refer new users.
Implement Retention Campaigns
Create campaigns to bring back inactive users. Use Nudge’s in-app messages to remind users why they liked your app and encourage them to return. Gamified referrals and streaks can also help keep users active.
Provide Excellent Customer Support
Be ready to help users with any questions or problems. Offer support through live chat, email, or a help center. Use Nudge’s coaches to provide in-app assistance and tips.
Monitor and Analyze Metrics
Keep track of important metrics like retention rate and churn rate to see how well your strategies are working. Use analytics tools to understand trends and areas for improvement, and adjust your strategies as needed.
Conclusion
Understanding and reducing mobile app churn is crucial for the success of your app. By implementing strategies like improving onboarding, enhancing user engagement, and continuously delivering value, you can significantly lower churn rates.
Incorporating nudges can play a vital role in this process by guiding users effectively and keeping them engaged. If you're looking to overcome app churn and boost user retention, Nudge offers powerful solutions. Book a demo today to see how nudges can transform your app experience.