When it comes to mobile apps, there is a big difference between retention vs stickiness. Retention refers to the number of customers who return to an app after using it once, while stickiness refers to users who make more than one purchase.
Personally, I have found that retention is much more important than stickiness. I would rather have a small group of dedicated users who use my app regularly than a large group of one-time visitors.
Retention vs Stickiness: What’s the Difference?
Let’s talk about customer “stickiness”. This term refers to a customer who buys from you more than once, whether it’s because of price, quality, convenience, or other factors. It’s important to define why a person is making a repurchase or is continually using your product.
The key difference between retention vs stickiness is that stickiness looks at the transactional value while loyalty focuses on developing emotional relationships to encourage customers to come back.
Customer retention is the measure of how many of your clients continue to do business with you, or how much they spend with you, from one month to the next.
While an increase in customer retention can be a result of increased customer “stickiness”, they are not the same.
With more and more companies offering the same services, it’s becoming harder for startups to attract and keep their customers. That’s why it’s more important than ever for these companies to focus on customer stickiness, which is the likelihood that a customer will return to use their product.
A “sticky” product is a product that’s designed to deepen the relationship with the customers, encouraging them not only to return to your product but to make repeat purchases.
How do you design a sticky product? We’ll look at the difference between customer stickiness and retention, how that can benefit your company, and some ways you can make your products more “sticky.”.
What Is Customer Stickiness?
Business owners are always looking for ways to increase sales, increase retention rates, and build brand loyalty.
By increasing customer stickiness, businesses can increase the likelihood of their customers purchasing from them in the future.
If you work in any field that involves communicating with customers, knowing how to increase your customer’s level of “stickiness” could benefit you.
How Customer Stickiness Helps Grow Your Business
Customer stickiness is not the same as customer retention, but it impacts how long customers stick around. Here are a few ways that stickiness helps expand your business:
Reduce Churn
Increasing customer retention, or reducing subscriber attrition, is crucial to the health of any subscription-based business. Even if you’re great at converting free trial users to paid subscribers, if your customers keep leaving, your revenue will dry up.
If your customer retention is low, it’s like trying to fill a bucket with holes. Every time a customer leaves, you feel like you’re losing money. Improving your retention rate should be a priority if you want to keep a healthy business.
Retaining customers is one of the most important things your SaaS business can do.
Increase Upsells and Cross-Sells
The more that customers rely on your product or service, the more opportunity you have for upselling.
As a customer continues to use and subscribe to your low-tier product, you must keep them engaged with other, higher-tiered products. By ensuring your customer is satisfied with their initial purchase of your lower-priced package, you’ll create more opportunities to sell additional subscriptions in the future.
While the success of this is largely dependent on your account manager, keeping customers happy is a huge part of keeping them around.
Increase Customer Lifetime Value
Reducing your customer’s likelihood of churning will increase your LTV. You can do this by implementing strategies to increase customer loyalty, such as increasing customer retention, reducing customer acquisition costs, and increasing customer satisfaction.
As your LTV grows, you can invest more into acquiring new customers. A high ratio between your Customer Acquisition Cost (CAC) and your Average Revenue Per User (ARPU) is a good sign.
More Referrals
If you want to earn more business, focus on making your customers happy. Satisfied customers are more likely to refer new business to you.
One of the best and most cost-effective ways to earn new business is through referrals. Not only should your loyal customers refer you to other potential customers, but they should also be so loyal to you that they’d even bring you along if they ever joined another company. This is yet another advantage of having a sticky product or service.
Why Customer Stickiness is Important
Customer stickiness is important because it leads to more repeat business, more sales, and higher profit margins.
Repeat business from your customers can help you increase your store’s longevity.
It can help you build customer loyalty and increase your revenue.
Benefits of Increasing Customer Stickiness
Sales professionals, marketers, and customer service reps all want to provide the best possible experience for potential customers because they understand the benefits of building loyalty.
There are many benefits to increasing customer stickiness.
- Increase the lifetime value of your customers
- Improve customer loyalty
- Identify opportunities to upsell customers
- Provide customers with more value
- Increase customer referrals
- Improve your ratings and reviews
- Generate more sales
- Increase revenue margins
- Improve your return on investment from marketing campaigns
- Build stronger customer relationships
Customer Stickiness vs Customer Loyalty
While both loyalty and stickiness are important, they differ in several ways. Here are a few of the differences between customer loyalty and customer stickiness.
Customer stickiness is often based on transactional value while customer loyalty is based on a deeper connection to your brand.
Customer stickiness targets new customers and can be short-term, while customer loyalty is usually focused on long-term relationships with your brand.
Customer stickiness is all about high-value shopping, convenience, and relevance, while customer loyalty focuses on building emotional ties with customers.
Customer stickiness focuses on developing new relationships with customers, while customer loyalty strengthens pre-existing relationships.
App Stickiness Builds User Engagement
Making your app sticky means users return to your software frequently so you have more chances to generate revenue through in-app purchases or ad views.
A formula for increasing customer stickiness would look like this: Retention + Engagement = Stickiness.
While we know that the stickiness of an app varies by industry, we can share some general guidelines on what to consider when evaluating the “stickiness” of your application.
The first thing to look at is how many active users you have daily or monthly. This will tell you if people are sticking around or not.
MAU/DAU on its own is a useless number. But, when paired with other metrics, it can help you determine how many users are truly engaged.
Next, you’ll want to keep an eye on session length which tells you how long users spend in your app.
This is a good way of measuring how well your users know your app’s features.
Session length depends on what type of app you have. For example, media or entertainment applications will likely see much longer sessions as users watch movies or listen to music during their commutes.
A mobile banking app may see short sessions because users log in to check their balance or pay bills quickly.
The key is understanding what the average session length for your specific app should be and comparing that against your best customers to set engagement goals.
Once you’ve determined how much time users spend on the app, you want to ensure they’re taking action towards conversion. This doesn’t always mean completing purchases.
Defining what behaviors constitute conversions can help you measure how often users complete them. For example, if a user creates an account through the mobile app, that is a conversion.
Map out the paths your users will take once they download your app. To ensure that your users are as sticky as possible, you can design your marketing campaigns to drive them to take valuable actions.
You can set up custom events for each of your campaigns. By tracking these events, you can measure how successful your campaigns are at driving valuable actions.
Churn is another metric that determines the stickiness of an app. Your app’s churn tells you the rate at which you’re losing users in a specific period.
Reducing your user attrition rate will keep your user base stable, and lessen your workload in trying to acquire new users.
How you define “churned” can be unique to your mobile app, depending on your expected user behavior. If you’re a retail app and a user hasn’t purchased in over 60 days, that could be considered churn.
Measuring app stickiness means creating app experiences that help you retain your users and increase engagement.
By monitoring your daily or monthly app users and how long they spend in each session, you can better understand how your mobile app is retaining its users. By studying this, you can make changes to better engage and retain your users.
Conclusion
Retention vs stickiness: which is more important? Overall, retention is much more important than stickiness when it comes to mobile apps. Stickiness may get users to come back once or twice, but retention will keep them coming back again and again. So if you’re looking to build a successful app, focus on creating an engaging experience that will keep users coming back for more.
