How to Increase User Retention Throughout the App Usage Lifecycle

How to Increase User Retention Throughout the App Usage Lifecycle
App user retention

Acquiring app users is only the first step in growing a healthy user base.

Just like with any product, finding a base of paying customers is crucial to staying in business. You may have invested countless hours in building an app that merchants will love, and merchants may be eager to try it out, but once the trial period is over, what can make or break your app business is whether or not they stick around as a paid user.

With around 96 percent of apps on the Shopify App Store using recurring billing as part of their app pricing model, a significant drop in users means a significant drop in monthly, and ongoing income. Furthermore, in the app industry, research suggest that as little as a 5 percent increase in customer retention can lead to a boost in profits by 25 percent to 125 percent. As you build out new apps and features, this research also shows a 60-70 percent probability of being able to sell new features to current users, while this likelihood for new users was just 5-20 percent.

Even if your app offers an excellent service and is well maintained, users may drop-off for various reasons. Perhaps they failed to see the impact of your app, or no longer see the case for continued use. Perhaps their own business has changed or grown, and they feel the need to scale-up to a different offering. Although certain variables may be beyond your control, there are several user retention strategies you can employ throughout the app usage lifecycle, to help keep your clients engaged, and ultimately converting into loyal users.

Pre-install phase

A user’s experience with your app starts before they even click to install. You already know the importance of having a clear and detailed app listing page for driving installs, but your app’s description, visuals, and price points will set the stage for user’s expectations of ease-of-use and performance.

If you don’t carefully consider the following factors, you can find your app uninstalled before it has a chance to show its worth.

1. Determine a free trial period that makes sense

Free trial periods offer a great opportunity for merchants to try-out apps before committing any cash. When our Apps Data Analytics Team took a look at free trial periods and conversion rates, they found that in most cases, a seven-day trial period led to the most conversions from unpaid to paid users, after the trial period ended.

On one hand, this means that you don’t have to offer free services for very long before seeing a return on your efforts, but it does mean that this first week is crucial for merchants in deciding whether they want to continue using your app.

One exception to this is the category of apps that are tied to boosting sales. Just as the sales industry itself is known for ramp-up periods that give new sales reps time to start making sales, your sales app may also need a longer ramp-up time before the merchant can witness its impact. In our analysis of free trial periods to conversions, sales apps (eg. apps that assist with upsells) actually benefited most from a 30 day trial period.

2. Verify your pricing model

Price is a major factor in any purchase. With apps, pricing models can be flexible when using the Billing API; they can be built around one or a combination of the following models:

  • One-time charge. Makes sense for apps that perform an immediate action and require little to no merchant follow-up or upkeep.
  • Recurring app charges. Makes sense for apps that provide consistent servicing or support, month-after-month.
  • Usage based charges. Makes sense for apps in which merchant actions and incremental volumes result in additional time and labor required by you, the app developer.

As mentioned, this billing model is flexible, so you can adjust it in a way that you think works best for your clients.

For example, photo resizing app PixC will resize the first 400 images for free. After that, they give users the option of a usage-based billing model ($0.05 charge per image optimized) or a flat monthly fee ($19.99 per month for unlimited resizing). By giving users two different pricing models, they’re empowered to choose the option they think works best for their business.

Another approach is to use tiered pricing, based on volume. The sales app Product Upsell, offers a 30 day free trial, after which users can choose a plan consisting of four different tiers, based on the number of actions created by the app - in this case, number of views on upsell offers served in the app. By offering tiers, merchants with different sales volumes and budgets can take advantage of the app, and the developer can make sure that the services provided align with the work they put in.

Lastly, the tracking and reporting app, Better Reports, provides different price points that correspond with different Shopify plans.

You might also like: Why App Developers Should Use Shopify’s Integrated Billing.

3. Have recognizable branding

Many apps offer similar services for merchants, and it’s likely that in trying to find the best solution, merchants may trial similar apps but only continue with the one they enjoy most.

For example, there are numerous apps that provide pop-up based solutions. Below is a sample of some of these. Note how all five apps listed below use different fonts and brand colors. This way, merchants testing multiple apps can better distinguish and recall between options.

App user retention: Sales pop

App user retention: Pixel pop

App user retention: Privy

App user retention: Just uno

App user retention: Popup window

The first 24 hours

According to Shopify app analytics, 24 hours after installing an app, 14 percent of users on active shops have already opted to uninstall. This stat shows the importance of making sure to showcase your app’s capabilities on day one. For following strategies can get merchants engaged with your app, right from the installing.

1. Give users an initial action to perform

Providing an action to complete as soon as the app is installed can be a great way to create immediate engagement with the apps’ functions, and make users feel immediately invested in the app trial.

An app that does a great job of encouraging simple and immediate actions is Smile.io. Before a user even completes the onboarding process, they’re prompted to set their brand colors within the loyalty app.

App user retention: Set brand color
Before completion, the user is prompted to click the green button to set their brand color.
App user retention: Style your program
In this simple interface, users can quickly make an action, and become engaged in the app.

In addition to encouraging engagement through action, at the end of app onboarding users can click to see the app on their store. This helps to further provide visibility into how the app interacts with the merchant’s shop.

App user retention: See how the app looks
At the end of smile.io’s onboarding, users are encouraged to see how the app looks on their store.

You might also like: How to Improve Your Shopify App's Onboarding Flow.

2. Build a personal connection

When it comes to software, the human touch can go a long way. When you’re trying to get merchants to feel invested in your app (after all, you’re both entrepreneurs), putting a face to an app can make the app usage experience feel more personal.

Showcasing a human name and face immediately after installation can create a warm, personal welcome. When merchants install SEO Manager, for example, they’re greeted with a welcome video from the app company’s COO, Rhian Beutler.

App user retention: Welcome video
After installing the app, merchants are served a welcome video from SEO Manager.

As well, including a chat pop-up in your admin, with a name and face, can be another great way to let merchants know that there’s a person behind the app. For example, when merchants first install the dropshipping app Oberlo, they’re greeted with a chat window from the company’s founder.

App user retention: Oberlo landing page
Landing page of Oberlo, after initial install. Included is a chat pop-up from the app’s founder, in the bottom-right corner.

3. Provide additional tools and resources

With different merchants having different needs and technical know-how, it’s important to provide as many help resources as possible, and to make these easily discoverable.

SEO Image Optimizer by Booster Apps provides an FAQ link that conveniently opens up within the Shopify Admin. Aside from ease of access, this helps avoid context switching, and keeps the merchant on-task within the app.

App user retention: Setup page
Setup page within the app. Link to FAQ documentation is to the left of the input fields, and highlighted in a different color.
App user retention: FAQ page
When the FAQ page is clicked, it appears within the admin. Users can easily access the page and easily close the FAQ,returning to the app setup process.

Another app that provides help documentation in a clear and convenient format, is the rewards app Swell. Following the installation of the app, users are greeted with a chat pop-up from the app’s founder, which directs them to additional resources for learning more about how to use the app.

App user retention: Swell app landing page
Swell’s app landing page, where users see a chat pop-up after install.
App user retention: Swell chat message
Swell’s chat message expanded.

Swell does a great job of not only providing quick links to guides users on how to use Swell, they also indicate where to get help, how to ask for help, and the hours in which merchant’s questions will be answered. Through this clear and friendly approach to letting merchants know where they can go for assistance, the likelihood of merchants seeking further understanding before removing the app, increases.

The first 72 hours

In just three short days, you’ve already lost more users. One average, around the 72 hour mark, only 83.7% percent of apps are still installed on active shops.

Hopefully, your merchants have performed an action by now — but perhaps you can give them details on how their actions are tracking, as well as next steps. If the merchant has agreed to receive emails, you may want to send an email that contains:

  • Suggested actions they can take within your app.
  • Any reports or benchmarks (should the app have driven more traffic by now? Improve search rankings? Do you have any performance data you can share?).
  • Links to any documents, blog posts, or FAQ links.
  • Reminder that support is available, and how best to get in contact with you or your support team.

When the dropshipping app Oberlo sees that you haven’t made an action in their app in the three days after install, they send users an email that provides more information on how to best make use of the app’s function (dropshipping) as well as a link for finding tips and resources.

App user retention: Oberlo email example
Example of the email Oberlo sends inactive users, three days after they install the app.

As one of my wise friends once said to me, half of success is just remembering to follow-up.

As one of my wise friends once said to me, half of success is just remembering to follow-up. By looping back in with your merchants a few days after install, you can hopefully help keep them hooked.

You might also like: Show Merchants How Your App Drives Sales With Shopify’s New Marketing Events API.

The first week

In many cases, this will be when your user’s free trial period ends. This is the moment of truth — will they leave now that it’s the end, or will they stay on as a paying customer?

To help maintain goodwill with the merchant, you should remind them of the ending trial period. As mentioned above, try to share with them how the app has provided impact, and how they should continue to make the best use of the app going forward.

If the user does indeed choose not to continue on as a paid user, this is a good time to ask for feedback on your app. This will not only help give you direction on how to improve your app, but can also be a path to looping back to that merchant in the future, when adjustments or improvements have been made.

Between month one and three

The first month is complete, and on average, after 30 days 61 percent of apps are still installed on an active shop. After 90 days, 50 percent of apps are still installed. After three months, half of your users may be gone.

This may seem like a scary stat at first, but it’s actually above the industry standard for mobile apps and may simply represent that the users you have, are dedicated ones, who will stick with you as you grow your app business.

Around three months is also a good time to check in again with your users, to see if they have any questions, feedback, or improvement suggestions. By asking for ways you could make the app better, and showing that you appreciate their opinion, you’re killing two birds with one stone: gaining valuable insight for app improvements, while also making users feel more involved with your app and its growth.

At the end of the first year

One year as an app user — what a great milestone! Clearly this is a committed user, as only around one in three of your initial users will make it to the 365 day mark. This is certainly a relationship worth celebrating.

Clearly this is a committed user, as only around one in three of your initial users will make it to the 365 day mark. This is certainly a relationship worth celebrating.

You may want to send a special email to all one-year users, congratulating them on one year of using your app to improve their business. If you have a smaller user base, consider a more personal email.

Since you’d also like to keep your users around for the coming years, it’s good to communicate your growth as an app business. Highlight what features and improvements have been added to your app, and even tease your roadmap. If you have new apps in development, you may also want to include these merchants as part of a special “influencer group,” and allow them to be some of the first users of your new apps, and provide valuable input.

A loyal user base is an ideal user base

Being an app entrepreneur can be challenging. Having a loyal group of users who have been with your app for a long time not only keeps the lights on, but will help keep you bright and inspired, knowing that you have other entrepreneurs along for the ride with you.

If you’re a new app, you may just be focused on getting as many new users as possible, but as our data shows, those first few days with your app will heavily influence whether a user converts from trial to paid. For this reason, retention tactics such as encouraging early actions, making help documents readily available, and user follow-ups, are not to be overlooked.

And remember — word of mouth is a powerful thing. By focusing on user retention and creating loyal customers, eventually your customers will become advocates, and do the pitching for you.

Learn more about building Shopify apps

What have you found to be an effective user retention strategy for your app? Let us know in the comments below!

About the Author

Liz Couto is a Content Marketer for the Shopify Apps Team, whose professional background looks like an odd mash-up of Mad Men and Silicon Valley. She can often be found with a cat in her lap, and a coffee in hand.

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