How to Prevent The Worst Type of Churn With Retargeting

Here is the dream: a user installs your app, opens to log in right after install and starts using the app often. Sadly, in real life, users’ behavior is not that straightforward. In the day-to-day jungle of app business, the fight is constant to keep your users in-app and engaged. Churn is the enemy. Why? Because retention drops can have a real impact on revenue, especially for businesses whose monetization is mostly based on in-app purchases and subscriptions.

So, when an app marketer invests so much in acquiring a new user and then that user churns, that poses a serious waste of resources. But, can one avoid this type of user churn?

Getting new and more users is the crux of the matter for app marketers. But getting an app install is just the beginning of a long journey towards keeping engaged and profitable users. This means the solution lies in preventing them from churning.

Churn is a behavioral phenomenon that can’t be 100% avoided, but it can be prevented. We know that an app user can uninstall your app and/or become inactive at any point in time and for diverse reasons. As advertisers, there isn’t much we can control when it comes to the product side of the mobile business. Still, there is an opportunity to tackle the other churn reasons related to the onboarding of a user and the messaging presented to the audience.

Here is what data tells us about churn and retention of an app user. Churn can happen very early on the user journey. Previous studies by Adjust show us that users tend to keep an app for just under six days before losing interest, login in for their last session, and then uninstalling it.

Let’s look at this overall app behavior by days post app install.

• Day 1: Apps usually show a high retention rate on the first day, followed by a drop-off on day 2. Reports estimate that close to 80% of users have churned the day after an app install. Advertisers look at a high retention rate on day one as a good predictor of a good retention performance in the long run.
• Day 3: Only an average of 13% of users interact with an app on the third day, making this a crucial time frame to re engage all users.
• Day 7: If we look at day seven, an average of only 12% of users is still active. A big chunk of app uninstalls happens in the first week, and it usually stabilizes after the second-week mark. This behavior tends to be present across different verticals, irrespective of their churn rate.
• Day 30: Within 30 days, an app can lose up to 90% of its acquired users. Within 90 days, this number rises to 95%. After one month has passed since the app install, the average retention rate for apps is 14%.

The data is clear: the majority of new app users will become inactive, and even uninstall your app, very soon on their user journey. The first few days post-install are crucial for retaining a user.

The worst type of churn

The worst kind of user churn is the one that is the hardest to recover from. It gives close to no chance to get a user back, or it becomes very costly to do so. From this perspective, the worst type of churn occurs when a new user drops out before completing the first intended action, which usually involves an onboarding process trial, such as a first tutorial completion, filling up a profile form, picking a goal, choosing a path or a theme, etc. The intended action will vary greatly depending on the nature of the app and the goals set.

At a stage when marketers are trying to build a valuable base of users that fully understand and engage with the app, retaining the maximum number of those users is crucial. A user that churns at a very early stage, right after install or during the first seven days, before they perform your intended action, indicates a significant loss: loss of the investment made in UA, no conversions, no ROI.

Why do we call this the worst type of churn? Well, the faster the churn happens, the less the user interacted with the app. Let’s picture this: as an advertiser, you know that your newly acquired users, both organically or via your paid campaigns, are high-intent, quality users. If these same users churn without even completing the first action, you intended them to perform; you’re technically losing high potential users. If these users are correctly retargeted early post-install, there is a much better chance to drive them down the funnel and increase their lifetime value potential.

Churn has two dark sides: either the user uninstalls the app, or they just become inactive. Inactivity can occur when there is a lack of or conflicting messaging, when the user journey doesn’t flow as intended, and for a myriad of other reasons. If your app onboarding is not sticky enough or presents a poor user experience, a user might drop off the app and decide not to come back. The user might lose interest in the app and simply forget about it and stop using it.

Users tend to try out many apps, but they don’t retain them all. They will usually decide which ones to keep pretty quickly. So if you can retain your users past the first steps of the journey (onboarding, reach a certain level, make the first purchase), there is a better chance they will keep engaging for longer after that. On the opposite side, if users don’t have a good “first impression” of the app and decide to uninstall, it will be harder to get them back to reinstall.

Churn happens. That is a fact. But there are measures to lower churn and increase retention rate, and ultimately an app’s conversion rate. The best way is to engage users from the very start, prompt them to reuse the app to prevent them from becoming inactive. And, retargeting is effective in doing just that: keeping your daily active users returning with more frequency, keeping them interacting and exploring the app.

As an app marketer, if one of your objectives is to increase DAU, retargeting is an excellent ally because it allows you to put ads in the eyes of users before they become inactive. Let’s take a gaming app as an example. You can use retargeting ads to prompt gamers to return to your app by introducing new skills or a new level, unlocking unique features, or giving them other perks that allow them to progress early in the game, and to entice them to explore and play more often.

Retention is a long term game that requires a keen eye for data analysis. And, retargeting is the well-oiled clog that will make your entire strategy function smoothly. Looking at the user churn rate and DAU early on allows marketers to understand their user behavior and see their progress. If a marketer can identify a high churn rate and pinpoint the probable causes of that same churn, it can better plan to tackle the issue, change course or optimize early on. Throughout this process, marketers can monitor retention and cohort reports and in-app event data, for clues on how to further optimize paid campaigns and fine-tune your audience segmentation.

The way forward is to work on identifying the causes of inactivity and churn, and cater to them individually using a well-thought-out retargeting strategy.

Let’s continue with the example of a gaming app with a segment of users that have installed the app but haven’t used it at all. A retargeting campaign can address this situation. It is possible to cater to the creatives used to incentivize the users to come back to the app. That can be done by using offers that focus on a special perk for the first signup/session, a daily login bonus, an exclusive character or level to play, or any other offering that can create a sense of urgency and curiosity. This type of approach ensures that users feel invited to explore and continuously challenged. Retargeting allows marketers to make these messages reach their users at the right time and with the right frequency.

Retention is essential to sustainable app growth, and retargeting is the not-so-secret tool that makes it possible. Here are a few sound recommendations to follow to prevent churn and keep your users engaged along the way:

• Identify the drop-off points during and right after the onboarding to identify the bottlenecks in the app journey. These moments of churn signal the key areas to improve.
• Rethink your app engagement loops to increase your user’s lifetime value. Plan to reach your users to guide them through the first intended action post-install.
• Focus on day one, day three, and day seven retention when planning your retargeting campaigns. Don’t wait until day 30 to reach your users.
• Keep an eye on your competitors’ performance when it comes to downloads, engagement, revenue, retention, paid and organic downloads, demographics, and average user engagement. Their users can show similar behavior as your users which allows you to spot patterns to optimize your retargeting strategy.
• Proactively collect user feedback throughout their journey. You can do so by using in-app surveys and polls. Your users will be able to give specific insights into how they perceive and use the app.

Not every app is the same, but all strive for the same goal: growth! If you are interested in testing new grounds, get a different perspective on your app retargeting campaigns, or discuss further how to prevent user churn, reach us at hello@remerge.io.