1

Introduction
3
Retention
1 and key engagement metrics 4

2 App user onboarding

11

3 App user journey

16

4 Segmentation
21

5 Personalization
24
Push notifications, SMS, email
6 campaigns, and in-app messaging 27

7 Referrals, reviews, and loyalty programs

30
Remarketing and retargeting
32

Conclusion
35

About Business of Apps

36

2
Introduction
To succeed in the dog-eat-dog app world these days, it’s not enough to just create
an impressive app with stellar functionalities and interface. Don’t get me wrong,
nailing your app is important, but it can only get you so far.

If you think that creating a great what it means to launch, maintain, and
app and investing in user acquisition sustainably grow an app.
efforts (with a pinch of ASO for
discoverability and visibility on the app To tell you the truth, developing and
stores) are all it takes to grow a mobile launching an app and acquiring users
app and become the next big hit—well, are really just the beginning of the
then you only know half the story of journey.

“So, what comes next then?”

I hear you ask, a hint of frustration in your voice—well, user engagement…
I graciously and benevolently answer.

With millions of apps saturating engagement comes in—to rescue your

the app market and with rising user app from churn and abandonment and
acquisition costs, retaining and help you retain users long-term.
engaging your existing users has never
been more important. So, join me as I dive deep into the
seven most important app engagement
Picture this: a user downloads your trends and strategies to keep an eye
app, they start using it, play with it for out for in 2024 to ensure that your app
a while and then they close it—never stays top of mind with your users and
to open it again. It’s an all too common that your UA efforts don’t go to waste.
story, unfortunately. This is where app

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1 Retention
and key
engagement
metrics

Retention is the bread and butter of the mobile app world; it’s part and parcel of
all your growth efforts; it’s the ultimate goal of all your campaigns. Retention is on
everyone’s minds and mobile markets, app developers, and product managers alike
are all trying to figure out how to master it.

4
And with rising user acquisition costs, it’s no wonder—it’s simply cheaper to retain
and re-engage existing users than to acquire new ones, and by a considerable
margin.

But what is retention? Well, let’s find out…

Definition: The simpler

version:
Mobile retention is the number
of unique users that launched Retention is the total number
your app at least once during of users still using your app
a specific day/week since after any given period of time.
installation OR the total number Retention rates are most
of users that launched the commonly measured after Day 1,
app for the first time during a Day 7, and Day 30.
selected date range.

The retention funnel and phases of user retention

5
An app’s retention rate is measured by comparing the number of users an app has
at the beginning of a given time period with the number of users the app has at the
end of that time period.

Retention rate formula

Explore app retention benchmarks and learn more about

retention rates here.

A high retention rate is indicative of a healthy app that offers its users a positive
user experience. In other words, retention is the foundation for user engagement
and an app’s sustained growth and a pivotal part of an app’s user lifetime value
(LTV).

User lifetime value (LTV)

User lifetime value is a key engagement metric to grasp. It

represents the monetary value of any given customer that you
have gained. Getting to grips with this will allow you to create
an effective loyalty program and enable you to determine how
much you should spend to retain your different cohorts of
users, from your most valuable ones to the ones bringing in the
least revenue.

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 LTV formula

A low retention rate, on the other hand, shows you that there is some problem with
your app that you need to address. When exactly users tend to churn can indicate
a variety of problems. For example, high churn on Day 1 can suggest that there are
some problems with your onboarding process–but more on that in a second.

Active users and DAU/MAU ratio

The term active users refers to the number of unique users

who engage with an app during a predetermined time period.
It is a critical metric that allows marketers to measure growth
and churn.

Measuring your active users is most often done on either a

daily or a monthly basis, whence we get the two holy grails
of app engagement: DAU and MAU. DAU (daily active users)
measures the number of unique users in a 24-hour period,
while MAU (monthly active users) refers to the number of
unique users in a 30-day window.

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 DAU/MAU ratio

Now that we have our DAU and our MAU, it’s time to put
them to work. By dividing your app’s MAU by its DAU, you can
calculate your DAU/MAU ratio or how “sticky” your app is, aka
how often your users return. Comparing this metric over time
will help you see how effective your engagement campaigns are.

Users who have dropped out are said to have churned. Churn rate is used to
identify how many of your users are lost in a predefined time period. It generally
includes both people who have uninstalled the app and those who haven’t opened it
in months, even if they still have it installed on their mobile phones.

To calculate your churn rate, take the number of users lost during a given time
period and divide that by the number of users that you started with at the
beginning of that same period. The resulting percentage is your churn rate.

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 Churn rate formula

Session length and time spent in-app

Knowing how long the average user spends on your app can
help you determine how successful it is. Session length refers
to the amount of time users spend in an app each time they
open it.

This definition could be a bit misleading, however, as there are

many different apps—some apps (e.g. streaming audio apps)
may also include time spent streaming in the background, while
always-on apps (e.g. kiosks) generally have built-in timeouts in
their session models.

On the other hand, time spent in-app is the overall time spent
by a user in the app. There are a couple of useful metrics
to keep in mind when discussing session length and time
spent in-app. These include: time per session, time spent
per session over time, average number of sessions per user
in a predetermined time period, time spent per N number of
sessions, and session interval.

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Having a high retention rate shows you the level of user engagement with and
loyalty to your app. Generally speaking, if users keep coming back, it means you
are offering them a positive, useful, and rewarding experience. Good retention also
drives revenue and boosts your app’s profitability and longevity, guaranteeing a
steady source of income and opportunities for further growth and expansion.

Additionally, retention marketing In other words, treating your users

is very cost-effective and uses well by offering them rewarding app
fewer resources compared to user experiences increases the likelihood
acquisition. of getting referrals.

Finally, retention done right can Now that we are familiar with what
actually also help with user acquisition user retention is, let’s find out how
efforts, as satisfied users are more to boost it. The best place to start
likely to tell their friends and family is… well, right at the beginning of a
about their positive experiences. user’s journey within your app—the
onboarding phase.

Learn more about mobile app retention here.

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2 App user
onboarding

The onboarding process is the first impression a user will have of your app—if you
lose them here, you are probably… most likely… certainly… never getting them
back.

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Startling statistics from the third quarter of 2022 reveal that Android apps had
a Day 1 retention rate of 22.6%, while iOS apps stood at 25.6%. These numbers
underscore a harsh reality: a significant portion of users (around 75%, in fact)
abandon apps within the first 24 hours.

App abandonment

Source: Pixalate

If you fail to impress your users right determines its fate. It’s the maker
from the moment they first open and or breaker of user experience
start using your app, the chances of and a prerequisite for long-term
them churning and never coming engagement and user loyalty.
back exponentially increase. A good
onboarding journey sets you apart
from your competitors, helps users It’s the very first impression, the
discover the value of your app quickly make-or-break moment, a chance to
and sets them up for success. showcase the value you bring to their
digital lives.
To put it bluntly, a user’s first
interaction with your app basically

12
magine app onboarding as a first date, where your app must charm and impress
your users as quickly and uniquely as possible if there’s to be any hope for a second
date, aka a second session. Or as a grand audition, where your app must prove its
worth and usefulness in addressing users’ needs and challenges.

But what exactly is app onboarding?

What is app onboarding?

App onboarding is a carefully choreographed series of steps that new users
embark upon before they can fully experience your app and its full potential. This
pivotal process can encompass educating new users (explaining to them how your
app works and what its core functions and functionalities are), helping your users
set up an account, and gathering consent for collecting user information, essentially
laying the foundation for a fruitful user-app relationship.

App onboarding

Asking for consent, Source: OneSignal

Setting up an account, Source: AppsFlyer Explaining features, Source: OneSignal

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Learn all about app onboarding, the different types of
app onboarding there are, and how to do it right here.

Why is app onboarding indispensable for user

engagement?
When users need an app for a specific purpose, they rarely download just a single
one. Instead, they download several, experimenting to find the one that truly
resonates with their wants and needs. (This is also why most users have so many
apps on their phones but only use a few.)

In other words, users sample various apps, swiftly deciding which ones merit their
time, often within their first session in an app.

“
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

Explains Ankit Jain, formerly the Head of Search and Discovery for Google Play.

Retention curves on Android

Source: AndrewChen.com

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Crafting impeccable mobile app onboarding is a game-changer, as only seamless
onboarding ensures high engagement and robust retention during those pivotal
first hours and days.

The strategy lies in designing

When it comes to app onboarding,
onboarding experiences that
the single most important thing to
prompt users to take actions known
remember is that by the end of the
to bolster initial engagement. With
onboarding process, users should
historical in-app behavior data, you
have ‘discovered’ your app’s value.
can identify actions correlated with
You want to give them a good
high engagement and ensure they are
reason to come back and show them
encouraged during onboarding.
how your app addresses and solves
their problems, incentivizing them
to return. In other words, value
discovery, formed and consolidated
during those initial hours of app
use, is the foundational stone upon
which habituality (i.e. regular app
sessions) can be built, transforming
a one-time user into a loyal one.

In short, app onboarding is the keystone for app engagement. It shapes a positive
user experience, imparts a deep understanding of an app’s features and advantages,
and increases the likelihood of users returning to the app.

By seamlessly guiding users through your app’s functionality and offering valuable
tips, a well-designed onboarding mitigates user friction and bolsters user
satisfaction. Effective app onboarding also fosters trust and loyalty, paving the
way for increased user activity within the app, better app reviews, and higher
ratings–but more on that later. For now, let’s turn to the app user journey.

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3 App user
journey

A user has downloaded your app and you’ve onboarded them. So, what comes next?

If you’ve done your job right during onboarding, they will keep coming back for
more time and time again, until your app becomes a staple of their daily routine.

This is where we should talk about the app user journey. The app user journey
already contains in itself the onboarding process, but it also includes all the steps
that come before and well beyond onboarding. So, let’s talk about it.

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Definition: In a nutshell, the app user journey refers to the series of steps that
users take within an app as well as the ways they interact with it—from the moment
of discovery and app install to the point when they achieve the goals they set out to
achieve when they first downloaded your app.

App user journey flow

Source: Medium

Simple enough, right?

Well, as with so many other things in life, it’s easier said than done—developing
a killer user journey takes countless hours of app development and meticulous
analysis. It involves dissecting user behavior to identify and mend any weak points
that hinder users on their path to success, i.e. achieving their goals.

When we speak of weak points, we refer to any stumbling blocks, UX and UI

inconsistencies as well as any other sources of hesitation and confusion for users
that might prevent them from exploring further and diving deeper into your app.
To avoid losing any users and tanking your engagement rates along the way, it’s
paramount that you identify and eliminate any and all pain points.

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Mapping your app’s user journey empowers you to effectively address these pain
points. It will also enable you to efficiently streamline and optimize your app’s UX
and UI, which, in turn, will have a positive effect on your app’s user engagement
and, ultimately, your users’ lifetime value (LTV).

App user journey stages

Source: AppsFlyer

For mobile marketers, it’s crucial to showcase an app’s

functionality and benefits, i.e. its value, to users.
Why does the
Understanding why users install your app allows you to
app user journey
optimize their experiences, shorten the time from install
matter? to purchase/subscription, and fix UX and UI issues that
cause users to churn. As your app’s user base grows and
new in-app features and functionalities are introduced,
mapping the user journey becomes increasingly important
for marketers and product managers.

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 Instead of considering your users as an abstract mass,
a user journey map helps you visualize your app from
What is the the user’s perspective, enabling you to focus on their
purpose of unique experiences and interactions within the app. A user
an app user journey map can highlight areas in need of improvement,
journey? but also areas where user expectations align with your
business objectives and the direction your app is already
going in, allowing you to conciliate your users’ varying
expectations of your app.

Why is it App user journeys unlock your app’s potential by helping

important to you understand user behaviour and revealing pain points
understand and user desires. Using insights gained from mapping
your app’s user your user journey, you can uncover critical issues before
journey? they turn into major problems, and optimize your
app’s design and functionality to cultivate long-lasting
engagement with your users.

How can Visualizing and mapping the user journey provides

mapping crucial insights for streamlining and optimizing the
the user user experience, reducing friction points, and driving
journey help conversions and engagement. It’s possibly the best
strategy to increase engagement and enhance your app’s
improve app
performance.
performance?

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 Start mapping your user journey once your app starts
gathering steam and you have collected enough users, but
When to build before your user base grows into the thousands or your
a user journey app experiences viral success. It’s best to start mapping
map? the user journey in the early days of growth; this allows
you to understand your crucial touchpoints, ensure high
levels of user satisfaction before your app gets too big, and
discover untapped opportunities before scaling up.

How to map your user journey in 8 key steps

Source: AppsFlyer

Learn more about the app user journey, its stages,

and how to map it here.

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4 Segmentation

We now have a good understanding of what retention is and how it works. We

know why the onboarding process and the overall user journey are so important for
having a high retention rate. So, then what actual strategies can you use to make
the onboarding more engaging and the user experience more fun? Fear not,
segmentation is here to the rescue.

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 App user segmentation

App user segmentation is the process of dividing your app users into distinct
groups based on shared characteristics, traits, and behaviors. This allows you to
create targeted marketing campaigns, personalize user experiences, and optimize
your app’s functionality to better suit your users’ needs and wants.

Segmentation enables you to The first step to app user segmentation

understand your app’s audience is to gather data on your audience.
better. By breaking down your users While it may seem obvious to
into cohorts, you can identify their segment users by demographic, it’s
specific needs, preferences, and best to segment them based on
behaviors. This, in turn, allows you multiple traits and characteristics.
to create personalized experiences These include demographics, in-app
(e.g. personalized messaging across behaviors, lifecycle stage, localization,
multiple channels) that meet those preferred device, and more. This will
needs, which can then increase user help you understand how different
engagement, retention, and revenue. segments interact with your app.

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 The four main ways to segment app users

It’s worth noting that app user segmentation is an ongoing process. So, it’s very
important to keep testing and iterating until you’ve achieved the desired results.
Additionally, remember that users are dynamic, so your segmentation should also
be dynamic. You should keep an eye on any changes in habits, demographics,
motivations, and trends to continuously refine your user segments and the
campaigns based on those segments.

Learn more about segmentation, its benefits, and our

best practices for segmenting your audience here.

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5 Personalization

You’ve segmented your app app audience—well done! So, what’s next? Now,
it’s time to use your shiny new user cohorts to personalize your app’s user
experience—that’s what’s next.

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Broadly speaking, mobile app personalization is the process of enhancing the
user experience and all messaging around your app with user-specific data—
from user interests, demographic and behavioral data to location and time zone.

The app personalization pyramid

App personalization aims to present App personalization comes in many

users with experiences that are different forms—push notifications,
customized to their specific needs and personalized in-app recommendations,
wants rather than a broad, generic special offers (e.g. discounts for high-
experience. The ultimate objective interest products, loyalty programs),
is to increase app engagement by and more.
making a “wow” impression with your
users.

It’s important to keep in mind that personalization isn’t the same as

segmentation. As you’ve outlined above, segmentation is the process of identifying
specific types of audiences based on psychographics, demographics, location,
behaviors, device preferences, and more. After you’ve collected the relevant data
on your users, you can then proceed to create your user cohorts or segments and
deliver app experiences that each cohort is most likely to respond to.

There’s no personalization without segmentation.

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In other words, segmentation is an important prerequisite to personalization.
It’s nigh impossible to deliver any sort of personalized experiences at scale without
segmentation.

• Improved user engagement and

retention
Benefits of • Better user experience
mobile app • Unique messaging
personalization: • Increased user loyalty
• More in-app conversions

Learn everything you need to know about app

personalization here.

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6 Push notifications,
SMS, email campaigns,
and in-app messaging

We’ve mentioned already that one of the best ways to personalize the app
experience is to offer unique, tailored messages on all channels. Let’s have a look.

27
 In-app messages

Communicating with your users is key, and we’ve already seen how important
it is to communicate your app’s value from the moment a new user opens it.
Personalized and intriguing in- and out-of-app communication can be a great
conversion tool for you to add to your marketing tool belt.

Messages examples

From push notifications, SMS, and email to in-app messages, the sky’s the limit
when it comes to getting users to engage with your app.
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 Push notifications

You can remind users of actions they’ve

forgotten to complete, promote a sale,
or simply give them a gentle nudge to
engage with your app again after a period
Cineplicity 1 hour ago of inactivity. Just remember to keep things
Thanks for installing Cineplicity! Check
out our new releases and use the code
short and sweet, as too much messaging
FIRSTRENTAL for a free movie night
could quickly become irritating to users and
is, in fact, one of the top reasons why people
uninstall apps.

Want to know more about in-app messages, push notifications, SMS, and email?
I’ve got you covered—simply click on the links.

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7 Referrals,
reviews, and
loyalty programs

With so much effort being put into acquiring and engaging new users, long-term
users can sometimes get lost in the mix. But loyal users often spend more than their
newer counterparts, so keeping them happy is crucial.

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Membership programs, reward systems, and value-driven clubs are all great
loyalty programs that you might want to consider to keep your long-term user base
happy and engaged.

Consider also asking them to leave you a review—they likely have lots of positive
things to say, and the reviews will go a long way in helping you acquire new users.
You can also offer them a small incentive for leaving you a review.

And finally, don’t forget to implement The veterans get a small reward,
a referral program to allow your keeping them happy and satisfied, and
veteran users to invite their friends in you also get some newer users. Now,
return for a small gift-talk about killing make sure to go back to step one of
two birds with one stone. this guide, repeat everything we’ve just
talked about, and secure yourself the
loyalty and continued engagement of
yet another user.

Want to learn more about rewards

and loyalty programs, referrals, or
reviews? Follow the links provided
and thank me later.

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8 Remarketing
and retargeting

Here’s the thing, when I said we would be covering the top seven trends and
strategies in app engagement… Well, I’ve actually got an extra eight one specially
for you. So, let’s talk about remarketing and retargeting.

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We’ve been talking a lot about retaining and engaging users, but let’s face it—you
will lose users, there’s no way around it. You can’t please everyone after all and
not all your marketing campaigns will be as successful as you might initially have
thought.

So, what happens when you lose a user (i.e. when

they churn)? Is that the end of the road?

OF COURSE, NOT.

Even if a user churns, it’s not App retargeting refers to the practice
necessarily a lost battle. There are of delivering personalized ads to users
always effective methods you can use who have previously interacted with,
to re-engage them and bring them visited, or installed your mobile app.
back to your app. From personalized The main goal of app retargeting is
ads, targeted email campaigns, or to re-engage users in various ways,
perhaps a good old SMS to giving such as encouraging them to revisit
incentives/gifts to inactive users, your app’s content, reinstall the app if
there are plenty of remarketing they had previously uninstalled it, or
channels you can use to help you win complete specific actions within the
back some of your churned users. app, like finalizing a purchase that was
previously abandoned.
By far the most popular type of
remarketing is retargeting, so let’s talk
about it briefly.

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 App retargeting user journey

The essence of app retargeting lies in employing customized strategies to

entice users to re-engage with your app and guide them through the complete
user journey. Leveraging insights gained from previous interactions with
users provides valuable knowledge about their preferences and interests. By
understanding why they may have sought similar services elsewhere, you can tailor
your retargeting efforts accordingly.

Retargeting step-by-step

Retargeting campaigns aim to remind customers of your brand, put your app
top of mind, and cultivate positive in-app behaviors that result in improved user
engagement and increased conversions. By leveraging retargeting, you can break
through the noise generated by all the other apps on a user’s phone and inspire
desired actions within your app.

Learn everything you need to know about retargeting here.

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Conclusion

This is where we come full circle and arrive back to where we started—retention,
aka the linchpin for user engagement. Everything we’ve covered so far has been in
the service of retention.

Every step you take—from a stellar onboarding to killer loyalty programs—is meant
to ensure people love your app, get value from it instantly, and stay hooked in
the long term, which is ultimately what defines app engagement and determines
success in today’s app ecosystem.

Engaging users is no easy feat; it takes time, effort, sweat, tears, and a lot of failed
campaigns—but I can guarantee you that nailing your engagement strategy will
most certainly be worth it, and the feeling of satisfaction you will get will be
incomparable. The engagement process is tough and often frustrating but is in the
service of a greater goal—just remember that trial and error and a lot of patience
are the name of the game here.

I hope this short guide has given you some insightful ideas and new avenues for
user engagement to explore going into 2024 to ensure that your app stays top
of mind with your users and that your next engagement campaign is a big-time
success.

If you have any questions or suggestions for us, don’t

hesitate to get in touch:

DETAILS BELOW.

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About

Business of Apps
Business of Apps is the leading B2B media and information
platform for the global app industry. Our site reaches 500k
users a month and has become the essential resource for people
building, marketing and monetising mobile apps.

The Business of Apps is operated by Soko Media which also runs

the App Promotion Summit series of events and the App Growth
Awards.

We are based just outside of London, UK and have been trading

now since 2012.

Our mission is to connect and grow the app industry and create
unrivalled opportunities for our team.

Our values: Contact us:

• Collaborative and friendly We’re always open to feedback,

• Always learning questions, and opportunities for
• Committed partnerships or contributions.
• High performance

You can get in touch with us here.

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