What is Churn rate?
Churn rate (rate of attrition) is the percentage of users who stopped using your app within a specific time period. For an app to grow, the number of retained users must be higher than the number of users who leave.
Why Churn Rate Matters?
Churn rate is important in mobile apps because it's a way to measure how quickly you're losing users and suppresses growth.
The more DAUs you lose, the more expensive it gets. You end up scrambling to add new users who can keep the income flowing. The success of your app lies in managing that churn rate and converting the users you already have.
It's important to note that every company manages customer churn in a unique way. You need to choose the metrics that make sense for your executives and then monitor what's happening to your user base.
It's the leaky bucket analogy: as uninstalled users drip out, you're struggling to refill your bucket by adding new users. And that gets expensive fast.
- Acquiring a new customer is 5-25x more expensive than retaining one
- Reducing churn by just 5% can boost profitability by 75%
- Improving retention has a 2-4x greater impact on growth than acquisition
- The probability of selling to an existing customer is 60-70%, but only 5-20% for a prospect
But that's not all. Churn rate also impacts key business metrics like customer lifetime value and retention rate.
Together, these numbers can help you build more accurate forecasts for growth, revenue, and scaling your business. They show how your app is performing now and what to expect in the future.
Every mobile app struggles with their customer churn rate. If you recall, the average mobile app loses 77% of its Daily Active Users (DAUs) within the first 3 days after installation.
And yet, the lifeblood of an app lies in retaining users. Without having a stable number of users, and without converting them, there can be no future for your app and no growth for your brand.
Solution to decrease your app uninstall rate
Find out the main reasons leading your users to uninstall by asking for user feedback and using mobile analytics features like funnels and flows to understand how users navigate your app and where the friction points lie. Uninstall tracking is another must-have analytics tool that will help you understand why people delete your app - and even predict user churn.
Here are some effective strategies to get you started:
- Optimize onboarding
- Leverage push notifications
- Personalize
- Consider deep linking
- Take advantage of in-app messages
Optimize onboarding.
If your onboarding process doesn't immediately showcase your app's core value, users will churn. Keep the onboarding process focused on benefits. Strip down complexity, limit the number of steps, and get users to experience your app's aha moment as fast as possible.
Leverage push notifications. Send triggered push notifications to a user's home screen to encourage repeat visits, engagement, and purchases. With a personalized approach, these notifications can reactivate users who are at risk of churning.
Personalize.
With personalized interactions and relevant messaging, users feel like you’re actually speaking to them. You can’t take a one-size-fits all approach to engagement campaigns. Take advantage of behavioral data like search and purchase history, device type and location, and user preferences to customize interactions.
Consider deep linking.
Mobile apps operate on URIs instead of URLs. That means deep links (or direct links) can take users right to a particular screen inside your app. These links can launch an app from exactly where a user left off, or take them to a specific product page. It’s a simple way to majorly enhance the user experience.
Take advantage of in-app messages.
Use in-app messaging to welcome new users launching your app for the first time and help them discover new features. Or display a personalized promo when they view a particular product.
How to Calculate Churn Rate?
You can calculate churn a few different ways, depending on what you need to know.
In some cases, you may want to find your monthly rates to get a closer look at monthly growth and retention. Other times, you may want to calculate your annual rates to see how growth is evolving year over year.
You can just look at a couple of monthly and annual calculations in action.
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