What is best way to drive retention and loyalty for mobile apps?

employee-retentionThis morning one question on Quora caught my attention and I had some thoughts.

A Localytics research study last year found that 26% of apps are used only once after being downloaded. As a result, we are starting to see a concerted effort to shift away from incentivized downloads and towards engagement with focus on overall customer lifetime value. App engagement and retention strategies depend on a wide spectrum of variables.

1) What is the app itself? is it a game? A utility? A content reader? A social engagement platform? An mCommerce shopping tool?
I’d categorize these as falling into one of two buckets: either “time-saving” or “time-killing” tools. Each one of these executions solves specific yet different user needs- and hence will require differing retention strategies. Time-killing apps are typically games or content (readers). The obvious answer for maximizing user retention here is to make sure that the game/content is of high quality. Games account for the vast majority of time spent on mobile phones. So, this is both good and bad news. Good because it is a high-impact activity, and bad because as such it’s becoming such a cluttered category – and thus makes it harder to stand out. Bottom line, make the game engaging, simple, and easy to “get into” – and make sure that the reward to challenge ratio is designed for maximum engagement. This gets into a whole discussion about game-dynamics that is a lot deeper and more complex. There is an outstanding article on mobile games from the NY Times that you should read. Utilities are a dime a dozen unfortunately (how many expense tracking apps are there now? Or battery notifiers?)

2) What is the business goal that the app is designed to fulfill? Is it for brand awareness or brand support? Is it designed to drive store traffic? Is it designed to drive direct revenue (through app purchase – or in-app purchases?) is it built in support of a product launch? Is it a customer service tool? This is a KPI-based question – and speaks to the means by which you will measure overall success of the app. Again, the answers to these questions will reveal varying methods for retention. It may important to note that in-app purchases now account for the majority of app revenues. However, this trend is generated by users being committed the initial app experience for a good amount of time before those purchases roll in. So, overall, if your goals are strictly financial (you want the app to make money), then trends indicate that getting the app out for free initially – and then waiting for the content/usage to seed – is the way that is working best now. Freemium as a rule has been a tried and true method for longer term customer engagement – and it holds true here as well. For brand awareness, this is a tougher one. Why would someone invest a great deal of commitment to a brand message? Typically they won’t, unless the value of the app content is so rich that they simply can’t get enough of it. That’s why a lot of brands are now turning to Utility Apps as a means of driving brand lift and loyalty. The investment is high however. Solid utility apps are an expensive proposition and need to be update frequently. But users are loyal – if the app solves a time-saving or efficiency problem effectively. I use a lot of utility apps personally – few of them are from brands – and would pay more for new features if they were introduced.

3) Who is your audience? Different types of users consume apps in different ways. While app types tend to follow audiences (for example, games are TYPICALLY developed for younger audiences, while finance apps are TYPICALLY built for professionals, etc) all sorts of apps are consumed by the entire audience spectrum. Know your audience. This is key. Invest in research. Look at app usage trends. Do focus groups – even with a core group of friends or co-workers. App developers make the mistake of assuming things about audiences (adults don’t like games, or kids don’t use utilities, etc) that do not prove out in reality. What are your target users habits and behaviors? Where do they live (urban or rural?), what is their income?

4) Test. Test. Test. So much of this is going to be trial by fire. Learn what you can, plan accordingly, commit to a strategy and set it free to the wild. Once the app is in market, the usage data will reveal a great deal about what tweaks are needed. I highly suggest (almost insist) on including a Flurry API for measurement and assigning someone to monitoring and analyzing results.

5) Market the crap out of it. People need to know that the app is there. How else are users going to get engaged? Social Media channels are good – but you will need to get a seed base first so the advocates are recruited. Reviews, posts, PR, organic discovery – these are the golden idols of a solid marketing strategy – but critical mass is needed to gain momentum. Again, so much of this is accidental unfortunately.

6) Quality!!! It’s a highly Darwinian market out there now – only the good survive the long haul, so make sure your app is good. Apple’s submission criteria while draconian is a good thing in that there are built-in quality assurance parameters that developers are forced to adhere to. Android’s lax oversight makes it easier (too easy in my view) for developers to dump garbage into the eco-system. Android’s marketplace may offer a good starting point for testing – but there is no better retention strategy than an excellent design and user experience. Hire talented people that understand app design. Adhere to best practices. Look at your favorite apps – and the most successful (look at Path – great design) and follow the lead.

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