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App Churn Management: Turn AI-led User Retention at Scale into Reality
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App Churn Management: Turn AI-led User Retention at Scale into Reality

When Numbers Paint a Picture

Globally, there are about 3.5 billion smartphone users. It is no surprise that the mobile app industry is thriving. App usage and smartphone penetration is still growing at a steady rate, without any signs of slowing down in the foreseeable future.

A recent Deloitte survey discovered that an average American checks his phone more than 47 times a day, with an average of 4 hours per day on his phone. This was before COVID-19. Extended periods of self-quarantine have increased the screen time usage by 70-80%.

What’s everyone doing on their phones?

Well, 90% of mobile time is spent on apps.

There are about 2.87 million apps on Google Play Store and about 1.85 million apps on Apple App Store .

Have a look at this graph:

graph representing user's attention span

70% of the sessions are less than two minutes in length. This speaks a lot about a user’s attention span.

As a customer-centric app, you need to have an effective mobile marketing strategy in place to capture and maximize this short 2 minute attention window.

What is Mobile Marketing?

Mobile Marketing is all about having engaging interactions with your users through their entire lifecycle – from when they first hear/discover your app to when they become a loyal and repeat user.

To ensure that as a mobile marketer you streamline your time and effort to convert an app visitor into a paying repeat user, we recommend you use the AARRR Framework:

AARRR framework for mobile marketing

Here we will tackle the first three stages of the framework:

Acquisition:

Paying to acquire users might sound paradoxical. But unless you’ve created a viral loop that organically drives app downloads through strong word-of-mouth, you will have to invest a sizable portion of your mobile marketing budgets into acquisition efforts. You will be waiting forever and a day by the time your marketing and advertising efforts catch up.

Why’s that?

Rapid spread of misinformation, concerns over data privacy, and a deluge of marketing messages – all have contributed to a fundamental shift – Users don’t trust brands that easily anymore.

Users are also becoming more impatient, more demanding, and more independent.

The hard truth is that your users need you a lot less than they used to. All this makes acquisition harder!

According to a recent survey, on an average – it costs $4.45 to get a user to install an app across all app categories, $30.51 to get him to register an account, and $75.86 to get him to make a purchase.

All in all, you can see that Customer Acquisition Cost (CAC) is high and will only continue to increase.

Activation:

On an average most apps get deleted within 5.8 days after they were last used. So, having a strategy for user activation is vital.

App users will only take a couple of minutes to look around, so you have a very short time frame to answer the following questions for them:

  • Is this app trustworthy?
  • Is it useful to me?
  • Is it addressing my immediate pain point?
  • Will it continue to add value in the future?

If these questions aren’t answered clearly, a user gets frustrated, will go dormant or worse uninstall. Losing a user is like someone unsubscribing from your mailing list. They are gone, unlikely to return.

Once you’ve activated your user, you’ll need to focus on keeping them as a user for the long haul. This brings us to the most crucial stage:

Retention:

stacked bar graph representing average rate per month

According to Statista, you can see that the global average user retention, across app categories, drops to 29% 90-days post app install.

For your app to succeed, you can’t let the above stats become your reality. You need to track and analyze the right metrics to prevent this. You can’t afford to lose carefully acquired users – you’ve invested so much time, energy, and marketing dollars to make that happen!

This is why you need to focus on your App Churn Rate to manage user retention.

What is App Churn Rate?

Churn rate, is the number of users who stop using your app within a given period.

How do you calculate this?

App Churn Rate formulae

And now you need to have a plan of action – manage it and to ensure this metric is kept at a minimum.

Sounds daunting? With Smartech, it really isn’t!

What is App Churn Management?

App Churn Management is an end-to-end solution, powered by our AI engine – Raman – to help you predict and manage churn; i.e. uninstall, so as to drive user retention at scale.

This can be broken down into 4 steps:

  1. Define the time period in the above formula, for your app:

Generally, time period is the window within which your users are most likely to churn or uninstall your app (from the day of app install).

This period is relative to your app category, depending upon the frequency at which your users need to launch the app to access your product/service.

For example:

A Netflix user is likely to use the app every day whereas an Amazon user is likely to use the app every 15 days or even once a month.

So defining this time period for your app category or industry vertical is critical to get an accurate view on your retention metrics.

Once this period is rightly defined, you can move to the next step:

  1. Creating smart segments:

Raman helps you dive deeper at an individual user level to get qualitative insights around:

  • In-app interactions
  • Time spent on each app screen
  • Live app performance of each user in every session
  • The stage in the user journey – in which a user uninstalled your app

Use all the above data to predict user behavior and segment your users into 3:

  • Most likely to churn
  • Fair likely to churn
  • Less likely to churn
Raman dashboard

Once these segments are in place, it becomes easier for you to design and deliver targeted and contextual multi-channel marketing campaigns for each of these segments to arrest churn.

  1. Create actionable and targeted campaigns:

Once you have this insight your task of reducing churn rate becomes easier:

  • Identify the segment you want to target
  • Choose the type of campaign you want to run
Create actionable and targeted campaigns with the 'Raman' dashboard

Weapons to reduce churn rate:

  1. Choose the most relevant channel to re-engage your users: email, SMS, app push notifications, or web push notifications
  2. Use Mobile App Personalization to grasp the attention of a “Most likely to churn/Fairly likely to churn” user

Here are a few examples of brands that have aced re-engagement with users:

OTT: Netflix

example of a brand that has aced re-engagement with users: Netflix

Personalized Email Re-engagement:

Orchestrate hyper-personalized email campaigns, sending the user contextual user recommendations based on their viewing history – you can increase your CTR by 60-80%. Doing this will help you revive dormant users and improve retention rates in the long-run.

E-Commerce: Amazon

example of a brand that has aced Personalized Email Re-engagement: Amazon

Personalized Email or App Push Notification Recommendations:

Based on the user’s search history you can send personalized product recommendations with attractive discount deals via email or app push notifications. This will nudge the user to come back to your platform and complete the purchase.

4. Keep track of your app churn management performance:

It is very important to track the performance of your actionable and targeted campaigns using the following key metrics:

  • Accuracy
  • Churn Arrested
  • Opportunity Loss

Let us understand these metrics and why they are important to measure the effectiveness of the campaigns you created to arrest churn:

  • Accuracy: Shows you how accurate Raman was in predicting your churn model – it’s segments for the defined period.
  • Churn Arrested: Gives you the number of users who were likely to churn and did not churn as a result of your actionable and targeted campaigns deployed
  • Opportunity Loss: Gives you the number of users who actually did not use the app in the last time period you defined and who weren’t targeted with a contextual re-engagement campaign
Keep track of your app churn management performance

The Road to Retention

Can you arrest your churn rates by almost 10-12% and fuel higher revenue generation and marketing ROI?

Absolutely.

With the power of AI, App Churn Management is now a reality. Don’t merely speculate but instead take data-backed, timely action on accurate predictions.

Investing in this will actually save you a lot of money, do justice to your customer acquisition costs, and above all, will help you improve your user retention rates.

Get in touch today to take a giant leap towards fortifying your mobile marketing strategy.

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