Small business owners are often told they need a mobile app to drive sales, boost brand visibility or just bring potential customers into the door of a brick and mortar store. But do apps really serve their purpose for the majority of businesses? It’s a question that should be on every business owner’s mind as a new study emerges creating a much more nuanced picture of app use.
App Abandonment Findings
According to the new data from analytics firm Localytics, about 23 percent of mobile users abandon an app after their first use, a slight improvement from 25 percent in 2015.
The findings are based on data gathered from Localytics’ user base of 37,000 apps.
App Retention Rate
App abandonment findings aside, the study reveals some interesting data about user retention. It shows user retention has improved to 38 percent, up from 34 percent in 2015.
While the numbers indicate slight improvement, it’s important to remember that businesses still need to do a lot to avoid churn and to convert more users to loyal customers. That’s because a large number of users (62 percent) will use an app less than 11 times, the study found.
Takeaways for Small Businesses
A surprising highlight of the study is that just two years ago, only 20 percent of users were abandoning apps. It’s perhaps not difficult to understand what must have gone wrong.
To begin with, businesses operate in an increasingly competitive marketplace today. In this crowded marketplace, consumers have a shorter attention span and too many options to choose from. To succeed, companies need to focus on customer engagement.
The Localytics study also points in the same direction. Its data shows using push notifications, in-app messages, email or remarketing is helping companies boost customer loyalty. In fact, user retention is as high as 49 percent for users who have push notification enabled.
Businesses need to focus on mobile engagement to create more value for their users. The first step is to formulate a clear mobile marketing strategy. Is there a real need for an app? How soon can it be launched? What kind of content will be used to make the most of it? These are some of the questions that businesses must answer before developing an app.
Boston-based Localytics supports more than 6,000 customers and reaches 2.7 billion devices and 120 billion data points monthly.
Image: Localytics
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