User Retention or Engagement?

Estimated Reading Time: 2 minutes.

So you have a new business, product or app and you obviously want to see how well it’s performing…. right? But, how do you measure the performance, is it through user retention or engagement? To many people, user retention and engagement mean the same thing. Although the two are related, there is a clear difference between the two. If you have any plans of getting involved in the mobile app industry, you should definitely be able to tell the difference.

Simply put, user retention is the act of getting users back to revisit your product, even if they aren’t actually completing any actions. User engagement, on the other hand, is measuring how much time an individual user spends on the product while completing actions or using certain features.

The problem is marketers nowadays will try to reach out to companies and emphasize their ability to “increase user retention”. However, you need to understand that an increase in user retention does not directly correlate to an increase in revenue. Many marketers will come in and simply utilize push notifications, re-marketing, and A/B testing. While these tools are incredibly useful, they don’t necessarily engage users and keep them wanting to do more when using the product.

Rather than spend thousands and hoping to see an increase in user retention, try to focus more on user engagement. User engagement is the umbrella that encompasses everything from retention, referrals, and revenue. Successful and high user engagement inevitably leads to user retention, which leads to an increase in revenue and referrals, both of which lead to growth.

Some easy and accessible tools to increase user engagement are:

1. App On-boarding: This process is a user’s first impression of your app, and if designed correctly, increases the likelihood of successful adoption. When an app is launched for the first time, the on-boarding process reinforces your app’s value and provides instructions that highlight key benefits and features.

2. In-app messaging/purchases: By giving users the option to message or make an in app purchase allows and incentivizes them to complete an action.

3. Individualization: It is important to cater and personalize the app as much as you can for each specific user. By doing this, you give users a sense of ownership and indirectly builds user loyalty.

4. Dopamine Labs: A venture-backed start up that is helping companies give their users the right burst of dopamine at the right moment through their API that uses AI and neuroscience in order to have them stay longer, do more, and monetize better.