The Secret Fix for Mobile App Customer Retention

Customer retention is one of the biggest challenges marketers face with mobile app deployments. Even as average retention rates have increased since 2009, they still hover around the 35% mark 90 days after download according to a Flurry analysis published in October 2012. Retail, entertainment and business apps all fall in at 35 percent and under for average customer retention.

When it comes to measuring mobile app success, however, many marketers choose to ignore retention rates and other critical indicators. Instead of trying to improve retention by tracking repeat users, time in app, and specific in-app activity, companies focus on vanity metrics like app downloads, registered users, and mobile traffic.

These stats don’t tell the whole story. While vanity metrics may sound good on paper, they don’t accurately portray progress against business objectives like improving brand loyalty and increasing overall revenue.

The first step in fixing the mobile app retention problem is acknowledging the situation and understanding why it exists.

Few, if any apps are perfect on day one, but the rush to bring an app to market, and an inability to know precisely how audiences will respond, both put pressure on companies to launch apps whether they are ready or not. Worse, once an app is launched, there is very much a “fire and forget” mentality, or at least an assumption that the only way to get feedback is through app store reviews. At that point, if the reviews are bad, many companies abandon ship, and start all over with a new app.

The decision is a poor one.

Why invest resources a second time if there’s no way to optimize the app experience? And even in the unlikely event that an app is perfect at launch – and gets stellar reviews – it won’t be forever. The reality is that users get bored, app environments change, and consumer wants and needs evolve.

So if an app isn’t likely to hold users’ interest over time, what’s the answer to improving retention? The key is ongoing optimization. While optimization hasn’t been an easy proposition for mobile apps to date, the situation is changing; both in terms of the technology on the market, and the aggregated experience available from companies who have learned to optimize apps successfully.

Experience is Everything
The single most important factor to consider when optimizing an app is how to make the experience easy and relevant to consumers. In a study conducted by Harris Interactive, 69% of consumers agreed that if a brand-name mobile app isn’t useful, helpful, or easy to use, it results in a negative perception of the brand.

The good news is that even the smallest changes to an app can make a big difference in outcome. Improving the flow of activity can be as simple as adding a tip on the home screen, adjusting the text of a call to action, or changing the screen layout to make important features clearer and easier to use. By testing different scenarios – running A/B tests that compare one version of a single variable with a second version – companies can discover which changes improve results.

Walmart recognized the importance of user interface changes recently during the pilot program for its new Scan & Go app. The company introduced the app in select stores in late 2012, but discovered that customers were confused by the difference between the app’s shopping list function and its Scan & Go shopping basket. To simplify the experience, Walmart added a mode allowing items to be scanned directly from the shopping list into the basket where they are automatically checked off. This UI change funnels users more quickly through the product selection process, and, since customers are less likely to abandon an item once it’s placed in a shopping basket or cart, it should logically lead to higher overall conversion rates as Walmart’s pilot continues.

On a smaller scale, A View From My Seat began optimizing its app recently with the help of ongoing A/B testing. The company, which uses crowd-sourced photos to show the perspective from different audience sections at sports and entertainment venues around the world, has implemented dozens of small changes to its mobile app based on user response.

The company tests different app layouts, and then pushes out the highest-performing version to all of its customers. Within the first two months of employing this strategy, A View From My Seat saw mobile app usage increase by 22%. Simple adjustments like adding images to the search results screen and offering a link to post photos on Facebook and Twitter have improved engagement and directly increased A View From My Seat’s revenue.

Beyond understanding the impact of UI changes, another crucial success variable with app optimization is making updates smooth and transparent to users. Apps shouldn’t require manual updates that take time to download and install. Delayed gratification can lead to app abandonment, particularly when a user has an immediate task to accomplish.

Instead of pushing out manual batch updates, companies should deploy changes automatically and seamlessly as needed. This used to be difficult if not impossible to do, but the introduction of new Mobile Experience Management platforms makes it easy to publish updates instantly. The benefit is faster time to action for consumers and a lowered risk of abandonment. If a user wants to research a product or add an item to a wish list, instant updates ensure there’s no waiting involved.

Fresher is Better
Keeping mobile apps fresh through ongoing optimization is the most critical component to increasing mobile app customer retention rates. Testing and optimization are widely accepted practices in the website development world, and they are no less valuable in a mobile app environment. A mobile app should be a managed experience rather than a one-off download, and with the technology and expertise available today, any company can achieve that goal. By keeping apps fresh and relevant, companies can not only increase customer retention rates, but drive user engagement, ramp up conversions, and ultimately improve the bottom line.

Bob Moul is CEO of Artisan Mobile.

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