What is User Retention? How to Optimize User Retention

01/04/2020 1051
Customer Retention

According to a statistic, the cost to have a new customer is 7 times the cost of retaining an old customer. User Retention is always necessary that businesses have to do, because of that, the rate of User Retention is a remarkable figure. As you track this number, you know when you need to make significant changes or strategically shift to achieve growth goals.

What is User Retention?

Customer Retention means the retention rate of users. This refers to the ability to retain customers of the company or product or application for a specified period of time. Most services, e-commerce platforms, and other businesses can measure this ratio by calculating the percentage of customers who return to buy and use your service or application.

If this ratio is low, it could be a sign that your product or application is poor for customers or the user care after they download the application is not good. Customer retention is also a factor in calculating the average value of a customer.

What is Customer Retention Rate – CRR?

CRR is an indicator of the percentage of customers who buy or use the services of the business in a given period. Depending on the type and nature of the business, businesses can calculate the CRR by different time periods: year, month, week, etc Usually, this period depends on the shopping cycle or the level of often that a purchase/sale is made.


(CE – CN) / CS x 100%

CE: number of customers at the end of a given period.

CN: number of new customers during that period.

CS: number of customers at the beginning of that period.

CRR is an important indicator to decide how well the customer service quality of the business, how fast the growth of the business. The greater the level of customer retention, the stronger the development of the business. Moreover, we all know that having 5 new customers costs a lot more than retaining an old customer. So if you can encourage loyal customers to stay with your business longer, you will maximize your revenue.

Customer Retention
Customer Retention means the retention rate of users

CRR helps businesses assess the quality of their applications, thereby having appropriate strategies to retain users and grow businesses.

How to optimize User Retention

  • Provide more value than users expect

The first step to improving your user retention rate is to deliver more than your customers expect, which means going beyond the task to please existing customers.

It is true to say that depending on the size of your business, your application, the tactics you use will vary, but here is a basic rule: what else can you do to let people know that you consider them to be customers in addition to the purchases. You should make different choices for users. Thanks to that, they will feel very comfortable to choose according to their preferences. The choice here may be a variety of products and services or a variety of methods for handling complaints about users.

  • Making a good first impression

For users, the first impressions are very important. Businesses that ensure these factors will help leave a good impression in the user’s mind, thereby improving the ability of users to return. Even with large businesses, they also send emails, even hand mail to customers to express enthusiasm, thanks to customers who have trusted and used their app.

  • Give users a specific route

There is no denying that Using a new product or application for the first time can confuse users. If the user finds it difficult to use your product or service, they will quickly lose interest.

In fact, you should create a guide or a roadmap to guide users to learn the features and characteristics of the application. This will make it easier for you to grasp users’ feelings and expectations, so you can easily provide the additional information they need about the application.

When users feel they achieve what they expect with the help of your business, they will use your services, products, applications longer. Therefore, there is no denying that orientation and customer care are very important.

  • Develop a loyalty program

Loyalty programs are an effective way to increase CRR. People understand that by signing up for a loyalty program, they can get more value every time they use the app.

Allow customers to redeem accumulated points for real rewards, which can be any deal you can afford. Bonus points also drive users to use the app, prompting them to take further action to appreciate the app experience again. Deploy gratitude gifts and favors for longtime members on birthdays, holidays, etc.

On the other hand, please always giving preference to close users is a way for them to come back and use your app when needed. Of course, you still need to calculate how the incentive can still stimulate users to use the app without making yourself losing a lot of money.

user retention
User retention is the use of available tools to increase the interaction/service utilization of existing users/customers

In addition, one of the ways to stimulate users’ interest is to run sweepstakes. In fact, these programs attract a large number of users to join and this is also one of the effective marketing methods.

  • Collect customer information

Gather details about the actions your users take, such as the content they care about, the things they share, then use that information to provide a personalized experience.

It is possible that when users feel that the business cares about their needs and goals, they are taken care of with the best services based on their desires seriously and practically, they will become loyal users. That contributes to promoting business and customer relationships, helping users to trust and use the application long-term.

  • Proactively communicate

The fact of the matter is that by reaching customers before they need it, you are succeeding in giving customers the best experience. Please proactively send customers information about your products and services. It is possible that customers are looking for more and want to know if what you offer fits their needs in the long run, but they do not know-how. At that time, you need to send your customers the necessary information and encourage them, making them more interested and positive.

  • Frequently ask for feedback from users

The frustration of the users is the cause of the user leaving your app. In order to find the cause of user frustration, you often need to get feedback from them. Such regular customer feedback surveys also show that your business is always striving to develop and improve the quality of its products and services.

  • Improve competitive advantage

What are you doing differently to compete with your opponent? Is your application good enough to retain users, not to leave you to find other competitors? To retain customers, you need to improve your competitive advantage, which are the differences that help you stand out from your competitors. That will make the customer choose you, not another app or product/service provider. There are many ways for you to improve the advantages of your business such as: reducing the prices of products according to a specific roadmap, improving after-sales service, offering creative and reasonable PR advertising strategies.

Use analytics tools to better understand the users’ wishes in their way. Once you understand the users (know what services are needed for them without asking directly), the company will have more reasonable solutions to meet the needs of the users more.

You need to research and develop CRM (Customer Relationship Management) solutions in addition to continuing to use existing solutions. Paying attention to the synergies between strategies, processes and the necessary information is a way to ensure that the campaign is on track and succeed.

User Retention is a seemingly simple task but it is a problem for any business. In order to maintain a good user base, you need to apply the above methods appropriately. Besides, you should also add other methods depending on the situation of your business!

All in all, put simply, User retention is the use of available tools to increase the interaction/service utilization of existing users/customers with the ultimate goal of increasing revenue/value for business. User retention also includes stimulating and interactive activities for users who have previously used the product or app service through this article, I hope you can better understand what User Retention is and how to optimize Customer Retention quickly and effectively.


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