App downloads are the first successful step to business growth, and the next important step is to engage users and make them use your app; that’s how you make money.
According to Inc. Magazine, over 80-90 percent of all downloaded apps are used once and then uninstalled. Therefore, if you want consumers to continue using your app, you must ensure that it keeps them interested and engaged. Keeping your users engaged and maintaining a long-term relationship is essential to your business growth.
This article will discuss user engagement metrics, why they are essential, and the top user engagement metrics to measure on your app.
What is User Engagement?
User engagement is an interaction between your users and the product. It measures how frequently and for how long your users interact with your app. The definition of user engagement differs depending on the category. For example, it’s a transaction for financial apps and order for ecommerce.
In the mobile world, user engagement relates to user participation with your app. Highly engaged users are happy customers; they are more likely to buy, return and share the app with friends and family. Therefore, every touchpoint a user experiences with your mobile app directly affects how engaged users are with it.
What are User Engagement Metrics?
User engagement metrics are the measurable variables related to user engagement on your app. These metrics provide you with information regarding the functionality of your app and will keep you updated on activities such as user engagement, conversion, retention, and churn.
In other words, engagement metrics show how much value users get from your app, which is a finite source of information on app engagement.
Why is it important to Measure user Engagement Metrics?
In simple terms, a product’s growth can determine by the level of user engagement. A user’s level of investment in a product directly correlates with the amount of time they spend on the app. It is important to measure user engagement metrics because it gives you insights that can help you determine what features of your product are performing well with users and which are not. They can also assist you in developing your roadmap for the future.
While measuring your users’ engagement, it’s equally crucial to understand their disengagement level.
User Engagement Metrics
User Acquisition Cost
The rate at which users are added to an app can demonstrate the efficiency of each marketing channel and highlight which ones produce the most profitable traffic. The user acquisition metric identifies the channels (organic, paid, social media, and a host of others) your users are coming from. You will better understand how to acquire new users if you can identify the sources of your interactions and downloads.
Rather than assume how much you spend acquiring new users, you can use this metric to determine the user acquisition cost and plan your marketing activities accordingly.
How to calculate user acquisition cost
User acquisition cost = Total marketing cost / Total acquired users.
User Activity (DAU/MAU)
In most cases, user activity can assess within a specific time frame, such as Daily Active Users (DAU) and Monthly Active Users (MAU). How many unique individuals are actively using your product at any given time can determine by tracking user activity using at least one of these indicators.
There is no proven statement that someone who has downloaded your app will utilize it. Your DAU and MAU statistics will help you understand how engaging or practical your mobile app is to users.
Depending on your app’s industry, user activity can change significantly. To assess user activity, initially determine what you consider an “active” user. You may identify how many daily, weekly, or monthly users you have once you establish what constitutes an active user for your particular product.
An event (a significant activity) occurs while a user uses the app at a given time. Events, however, are not merely restricted to the direct actions that users execute. It can be anything that takes place while a user is using an app, which might be valuable for analysis.
An event tracking involves measuring the significant activities made by users in your app. You are analyzing the actions of the users within your app. With this, you can learn the effective characteristics of users within your app.
The easiest way to determine whether an app is valuable enough to keep a user engaged or not is to look at session length. The amount of time a user spends using your app during a session is known as session length. It is a key metric that segments users to find out who uses the app frequently and appears to be the most engaged.
Evaluation of session length requires a thorough understanding of user expectations and behavior. Although mobile users spend an average of five minutes on an app, this quantity may vary depending on the type of business. A longer session length implies greater involvement.
How to calculate session length
Average session length = Total session length/Total number of sessions
This metric is different from session length; this gives you the amount of time a user spends in your app within a specific period. It also contributes to a better understanding of user behavior and app usage patterns.
Measuring the average amount of time a user stays on your app is vital. It determines a benchmark to evaluate each user, making it simpler to assess whether they are using your app for long or short periods.
The time users spend in your app daily, weekly, or monthly depends on session length and frequency. Users are more likely to engage with your app when they spend more time using it, which improves app quality.
The conversion rate is the proportion of visitors or interactions that result in an action that meets your app growth objectives. The measurement enables you to determine immediately whether a specific consumer touchpoint is operating successfully or not.
Suppose you want users to perform specific actions when using your product, such as visiting a particular page or using a distinctive feature. These activities are conversions that can monitor. Conversion rates measure many key moments in a customer’s experience.
How to calculate conversion rate
Conversion rate = Total conversions / Total interactions
One of the most crucial mobile app metrics is the stickiness ratio, which shows how much value users receive from your app when calculated over several months. The formula considers both DAUs and MAUs, and a more significant percentage indicates that more users find your app valuable and come back to engage with it.
As a user generates more sessions, the more engaged they are with the app; hence user engagement can determine by measuring how many sessions a user creates on the app.
How to calculate Stickiness
Stickiness ratio = Daily active users / Monthly active users X 100
Another important metric to measure user engagement is the retention rate. Using retention rate, you can find how many times users have visited the app during a given period. The retention rate can be reviewed monthly, quarterly, and yearly. Unlike any other costs, retention efforts do cost much.
The best strategy for mobile app growth is user retention. Retaining customers is more profitable in the long run than acquiring new ones. The mobile app retention rate indicates when customers start abandoning an app. The next stage is to understand why users are leaving, or more specifically, what behaviors are associated with low retention of users.
How to calculate the retention rate
Aggregate retention rate = No. of monthly active users / No. of installs
The churn rate is opposite to the retention rate, which measures the number of people who uninstalled the app. The decrease in retention rate can directly tell the results of the churn rate.
This allows them to understand why customers are leaving and what can be done to keep them.
The rise in churn rate can be the biggest problem when you cannot find why customers are uninstalling the app or canceling the subscription. It can be due to many reasons like the absence of an engaging content, issues with operating the app, or switching to other rival apps. The truth is that consumers come and go, even though all businesses aspire to have a loyal customer base and a zero churn rate.
How to calculate Churn rate
Churn rate = No. of customers lost/ Total no. of customers X 100
Net Promoter Score
Customer experience can measure by the Net Promoter Score, which also forecasts business growth. NPS is a metric that estimates users’ likelihood to suggest your product to a friend or family on a scale of 0-10. Here, the users are segmented into three categories, promoters, detractors, and passives.
Promoters are a company’s most loyal consumers, scoring 9-10 on the scale. They are more likely to serve as brand ambassadors, boost a company’s reputation, and improve referrals.
Passives are less likely to advocate a brand, scoring 7-8 actively. But they are also less likely to spread rumors about it. They are incredibly close to becoming promoters even though they are not considered in the NPS calculation.
Detractors are unlikely to promote your business or product to others, scoring 0-6. They are unlikely to stick around or make repeat purchases.
How to calculate NPS
NPS = %Promoters – %Detractors
Customer Satisfaction Score
Customer Satisfaction Score (CSAT) is a metric used to measure how satisfied customers are with a brand. Requesting the customers to rate the app or the specific feature is a part of customer satisfaction surveys.
A great customer experience program has many elements, but satisfaction is crucial. Customer satisfaction is a component of a larger system that promotes long-term client retention. It is a key performance indicator frequently used to measure how satisfied users are with the products/services provided by your app.
How to calculate CSAT
CSAT = Number of satisfied customers / Number of survey responses X 100
Customer Lifetime Value (CLTV)
Customer Lifetime value means measuring the value generated from a customer throughout their relationship with the app, from installing the app to uninstalling it. CLTV assists businesses in identifying the most valuable customer segments and ensuring that the cost of acquiring new customers is profitable.
By knowing CLTV, you can manage expenses contributed by you to avoid unnecessary losses in the business.
How to calculate CLTV
CLTV = Average value of conversion X Average number of conversions over a time period X Average customer lifetime
User engagement is a long-term struggle that you can only win by modifying your strategy based on the metrics you collect. Metrics on user engagement are essential for guiding you as you develop your product.
The success mantra to attract and retain users is optimizing and measuring for the right engagement metrics. Talk to our engagement consultants if you want to learn more about how to measure user engagement in your mobile app and how to improve it based on the results.
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