Upgrade Your App Monetization Strategy
The mobile app business is a serious business but generating an application and monetizing it is the major challenge.
Launching an App on a store is your first step for monetization. You integrated your Ad Network SDKs, made settings for IAP, and now waiting for making profit.
We all know that you need to engage your users for longer time to enhance your monetization, and also to be able to make marketing campaigns over higher CPIs with higher install rates.
So the question is how to track engagement of your users.
Most important metric to measure how much your users are engaged with your app is Retention Rate.
Retention Rates indicate the percentage of your users revisiting your app after a certain period of time.
Mainly, there are three types of Retention Rates;
a) Classical Retention
Classical retention rate gives a number to the percentage of users who opens an app after a certain number of days following the install.
Day 7 Retention Rate
If we say, for instance, Day 7 Retention Rate, it means the ratio of the number of users who installed your app 7 days ago and revisited your app on day 7.
For instance, here in this chart, it shows that you acquired 100 user on the Day 1.
On Day 2, 30 of them revisited your app, on Day 5, 23 and on Day 7, 20.
So, here Classical Retention for Day 5 is 22% and D7 Retention is 20%.
b) Range Retention
The classical daily retention approach only looks at users that connect at a specific day after the install date, while range retention looks at those returning during an interval of time, like in a weekly or month.
For instance, if you had 100 new installs in first week and next week 30 (unique user) of them entered your app again, then your weekly range retention for this period is 30 percent.
Range retention smooths out some of the day-to-day noise, and good for looking at trends or patterns over a longer period of time.
Here, you can see an example of Classical Retention (Upper image) and Weekly Range Retention from Firebase platform.
c) Rolling Retention
Another common type of retention is Rolling Retention.
Remember here if same user entered your app on Day 8 and Day 10, this user will be counted only once.
Rolling Retention helps you to understand with how many customers you’ve successfully built a long-term relationship.
What does Retention Rate Tell Us?
Retention Rates are important to get an idea about the engagement of your app for three reasons;
Firstly, it demonstrates the stickiness of your app. Secondly it helps you to calculate Life Time Value of your users (Click Here to learn more about LTV). Thirdly, certain patterns within Retention Rates tells a lot about the dynamics of your app. Let me get into details a a bit for you.
For instance, Hyper-Casual and Casual games should have high D1 retention rate. A High Day 1 retention doesn’t guarantee a success but a low one means most likely it is going to fail. Therefore, you can use Retention Rates at testing stage of your app.
If your Day 1 Retention is higher than 40 percent, it means you are on the right path, continue with the development. If it is higher than 30 percent, still you have a chance, so work on your Prototype and test it again. If it is lower than 30 percent, before too late kill your game and work on another.
Most of your users doesn’t rate your app on Stores or write comments, but they vote with their feet! Retention Rates are the main metric pointing out the satisfaction of your users.
So, always track the retention of your app, compare different types of it and figure out what does they say about the dynamics and potential of your app, use this feedback and go back to the development to make it better!
Have a fantastic day!