With more than five million apps in the two-leading app stores1, app publishers are making larger investments in app development and user acquisition. Most are failing to achieve success, as demonstrated by the average app losing more than eighty percent of their users within just seven days of downloading the app.2 Will your app do better? Many try to do better by adding features to their app with an unrealistic expectation that the next feature delivered is going to engage users and improve user retention. Adding features without understanding which features users value results in more disappointed users that may never come back to the app.
Ankit Jain, CEO of Quettra (acquired by SimilarWeb), provided his observation on the user retention pattern displayed in the data Quettra collected on more than four million Android app users.
“Users try out a lot of apps but decide which ones they want to ‘stop using’ within the first 3-7 days. For ‘decent’ apps, the majority of users retained for 7 days stick around much longer. The key to success is to get the users hooked during that critical first 3-7 day period.”2
Six Steps to Discovering your Retention Hook
So how do you get users hooked on our app in less than seven days? The answer is to perform a cohort analysis to discover your Retention Hook. The cohort analysis has six steps:
Step 1: Identify your cohorts. Group your users by the pattern of actions they take within a specified period of time. Invest time in this critical first step to ensure that you identify all possible cohorts. Some cohorts may not be obvious or appear to be too small to be relevant at first.
Step 2: Measure how long each cohort remains active in the app. There are several ways to measure retention. It is important to match the retention measurement methodology to the expected usage patterns necessary to achieve your app’s objective.
Step 3: Analyze the retention measurements and build a hypothesis of the Retention Hook from the cohort that remains active the longest.
Step 4: Test to validate the hypothesis on a larger group of users.
Step 5: Modify your app to guide users through the Retention Hook.
Step 6: Repeat the process to refine the Retention Hook or discover a new Retention Hook.
Discovery of a Retention Hook Fueled Facebook’s Growth Past Larger Incumbents
When Chamath Palihapitiya was leading Facebook past MySpace in user growth, he focused the team on long-term sustainable growth instead of trying to create a viral experience.3 Cohort analysis uncovered the now famous 7 friends in 10 days ‘a-ha’ moment. Tests revealed that when users achieved at least 7 friends within 10 days of signing up with Facebook, they realized the value of Facebook in their lives and were 85% more likely to return to the app. Guiding users to this ‘a-ha’ moment (retention hook) provided a clear and measurable objective to direct the actions of the user growth team.
Cohort Analysis Can Uncover Surprises that Deliver Dramatic Results
Your cohort analysis may deliver surprising answers. Calm, a simple mindfulness meditation mobile app, used a cohort analysis tool, Amplitude, to discover their Retention Hook.4 At first glance, you would think that doing a meditation exercise, the core feature of the Calm app, would be the Retention Hook. What Calm discovered was that a few users of a minor feature buried on their Settings page had a retention rate that was three times of those who didn’t set a reminder. This is why it is important to carefully consider the actions that users are taking within the app in Step 1 of your cohort analysis.
Since the group of users was so small, Calm was uncertain of the causality of this behavior, so they conducted an experiment. They prompted a group of new users that finished a meditation session to set a reminder. Forty percent of those prompted set a reminder and demonstrated a similar retention rate of three times those that did not. Calm released a new version of the app that prompted new users to set a reminder which dramatically improved their user retention.
With Only 3-7 days to Engage, You Must Know Your Retention Hook
Think of the times you have downloaded a mobile app. If the mobile app didn’t deliver an engaging experience or obvious benefit, did you keep using it? Did you keep upgrading to new releases until it did? Or, did you abandon it and delete it? Why would you expect users to behave any differently than you do?
The challenge is to suppress the urge to build new features until you understand what is causing your users to engage with your app. Cohort analysis is a tool that can help build that understanding.
If you would like to learn more about how discovering your retention hook would improve your user retention, you can reach Kevin Struthers at [email protected].
1 https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/
2 http://andrewchen.co/new-data-shows-why-losing-80-of-your-mobile-users-is-normal-and-that-the-best-apps-do-much-better/
3 https://ryangum.com/chamath-palihapitiya-how-we-put-facebook-on-the-path-to-1-billion-users/
4 https://amplitude.com/blog/2016/07/14/calm-increased-retention-amplitude/
