A retention rate gives a number to the percentage of users who still use an app a certain number of days after install. It is calculated by counting unique users that trigger at least one session in one day, then dividing this by total installs within a given cohort.

Retention rates help you understand how well your app is performing over time, per user. Generally speaking, a higher retention rate is better overall because users who stay active for longer provide more engagement, as well as greater monetization opportunities.

Retention rates are also useful for understanding why many users disengage from apps, and where you stand in the grander scheme of app performance. This can help pinpoint what you can improve and how to extend your users’ lifetime value (LTV).

With your analysis, you could look at how retention develops in your app over a 30-day period. If retention drops at a certain point, a goal may be to increase the number of users who are interested and engaged enough to retain past that date. In gaming, this is often the end of the onboarding period. In verticals like e-commerce, you could find out when purchases occur and optimize for that point in time.

Retention rates give you a potential insight into the longevity of your app. It’s also important to note that benchmarks for retention rates will change depending on app vertical. For example, users may install a travel app before their flight, use the boarding pass and then uninstall once their journey is complete. In this case, a lower retention rate after Day 7 wouldn’t be a cause for concern because it’s common behavior for that vertical.

There are a number of ways to improve retention rates, such as: