App engagement metrics: 5 essential metrics for subscription apps
Effective monetization begins with an engaged user base.
If users of your app are not staying engaged and coming back to your app, then you’re going to struggle to build a business.
There’s a constant balance of areas vying for your attention: Do I drive more growth and downloads? Do I optimize my pricing and monetization? Do I focus on driving more app engagement?
As your app grows and matures, you’ll have flywheels in motion for each of these areas. But in your app’s early stages, engagement is where you’ll likely devote most of your time. In the words of Nir Eyal (thanks to Babbel’s Sylvain Gauchet for sharing this gem), “engagement is more important than growth, at the early stage”, otherwise users will leave and your app is a leaky bucket.
Your app engagement optimization begins with monitoring the right metrics. For subscription apps, those metrics also need to include monetization and revenue so that you can qualify the engagement you’re seeing.
By the end of this article, you’ll have an understanding of which metrics subscription apps can measure to understand user engagement (and how to measure them), and how to use these metrics to drive more user engagement and ultimately revenue.
We’ll be covering five metrics in this guide:
- Session length/depth
- Conversion rate
- Churn rate
- Realized lifetime value per customer
How is app engagement measured?
Before diving into the specific metrics, it’s crucial to understand how app engagement is measured. Figuring out app engagement is about understanding how users interact with your app beyond just downloading it. It’s a blend of seeing what users do in your app and how this affects your business goals. Let’s break it down:
Key aspects of engagement measurement:
- Usage frequency and duration: It’s crucial to track how often and how long users engage with your app. Tools like Google Analytics for Firebase are perfect for monitoring these patterns.
- Depth of interaction: It’s more than just opening the app. What are users actually doing? This helps you understand how engaging your app is and find which features really grab your users’ attention.
- Retention insights: If users keep coming back to your app, that’s a good sign. It shows they’re really interested and that your engagement tactics are working.
- User feedback as a guide: User reviews and ratings give you valuable information about how your app is seen and how happy users are with it.
- Monetization and conversion metrics: For subscription apps, how users engage is closely connected to making money. Metrics like conversion rates and lifetime value (LTV) are key to seeing how user engagement leads to revenue.
With these key aspects in mind, let’s dive into the five critical metrics that will give you a complete view of your app’s user engagement.
1. Daily active users (DAU) / monthly active users (MAU)
These are fundamental indicators of an app’s health and user engagement. For subscription apps, maintaining a high level of daily or monthly active users is critical for sustained revenue. We begin with active users because they fuel the metrics that follow.
Defining active users is a flexible process, tailored to your app. It hinges on the analytics tool you use and how you configure it. Advanced tools like Mixpanel or Amplitude offer precise control. They allow you to define what actions qualify a user as “active”. This is crucial for accurate insights. The criteria for “active” users can vary widely and it depends on your app’s specific features and goals. In the early stages of your app, you might set a broad definition. For example, simply opening the app could count as active. As your app matures, you might refine this. You could consider users active only if they complete certain key actions. This approach ensures your metrics evolve with your app’s growth and development strategy.
Data-driven engagement: Focus on strategies that drive regular and meaningful user engagement. Utilize product analytics tools to identify which app features or content are most engaging. Personalization plays a key role here — by customizing user experiences according to their preferences and behaviors, you can enhance user retention and encourage more frequent app interactions.
Remember, for subscription apps, consistent user engagement is a key driver for sustained revenue growth.
2. Session length/depth
Session length and depth complement the monitoring of your active users. They focus on the quality of each session, not just ongoing engagement. For subscription apps, this insight is key. Understanding user behavior in sessions is crucial. Longer and deeper sessions often link to higher subscription rates. They also correlate with lower churn. This means understanding these metrics can guide improvements.
Measuring engagement: Session length refers to the duration of a user’s interaction with the app in a single sitting, while session depth looks at the levels of engagement or the number of interactions within the app during that session.
Predicting subscription likelihood: Longer session lengths and more in-depth engagement typically suggest a higher value proposition for the user, increasing the likelihood of converting free users into subscribers.
Tailoring user experience: Analyzing session data can help in identifying which features or content keep users engaged. This insight is invaluable for tailoring the user experience to encourage longer and more frequent interactions.
Strategic improvements: Knowing the trends in session length and depth helps you better your app. This could mean improving specific features, making the user interface simpler, or adding new content that appeals to your audience.
If you’re using RevenueCat, you can integrate with a number of analytics platforms to see how product engagement metrics like daily/monthly active users and session length/depth relate to your subscription metrics.
3. Conversion rate
Conversion rate answers this question: How well does your app convert downloaders into trial starters or subscribers? Broadly, it’s about the percentage of users moving through different stages of your funnel.
Understanding conversion funnels
For apps with trials: If your app offers a trial, focus on the “trial start” conversion rate. This is about turning downloaders into trial users. Then, there’s the “trial conversion rate“: converting these trials into paying subscribers.
For apps without trials: If you don’t offer a trial, your focus is on converting downloaders directly into subscribers. This is crucial if your app operates on a freemium model.
Optimizing trial length for better conversion
Trial length can greatly affect your conversion rates. Shorter trials might lead to lower conversion rates than longer ones. But, the ideal length varies based on your app’s context and user engagement strategy. Learn more about effective trial conversion rates here.
Maximizing download-to-paid subscriber conversion
This is key, with or without a trial. Studies show most apps have conversion rates below 2%, with top apps hitting around 4%. This gap shows the importance of working on your conversion strategy. Engaging users post-download is vital. This could be through a trial, free features, or an effective paywall. Clearly demonstrating your app’s value and its standout features is crucial in leading users to subscribe.
4. Churn rate
Churn rate measures the percentage of active subscriptions lost during a given period that have not yet resubscribed. This metric is crucial for subscription-based models — a stable or declining churn rate signals a healthy, growing business. Reducing churn and retaining users is essential for maintaining steady revenue.
New user churn vs. subscriber churn: New user churn refers to the overall loss in your app’s users while subscriber churn (which is the churn we mean in this article) refers specifically to subscribers becoming non-subscribers. Both are important but they represent different outcomes. When it comes to reducing new user churn (and turning new users into trials and conversions), onboarding is vital. We’ve teamed up with OneSignal to provide an onboarding messaging tutorial to help get you started.
Segmentation for insights: If you segment your churn data (like you can do in Charts) by factors like country or subscription duration you can identify which subscriber segments have the lowest churn (which could be an indicator of stronger product-market fit).
Win-back ideas: You can do your best to keep users engaged but it is bound to happen that some users will cancel. A cancellation doesn’t have to mean a loss, however. You have plenty of win-back options to experiment with, such as offering discounts to lapsed users or using in-app messaging and cues to remind users of the premium features they’re due to lose when their subscription expires. We’ve put together a list of win-back campaign ideas to inspire you further.
5. Realized lifetime value per customer (LTV)
Realized lifetime value (LTV) per customer is a crucial metric for subscription apps. It measures the actual revenue generated by a customer cohort over their relationship with the app, providing a comprehensive view of customer value. Realized LTV is often used in the same way as average revenue per user (ARPU), however, ARPU measures revenue over a specific period of time rather than a customer’s entire relationship with the app.
Defining realized LTV: Realized LTV per Customer is calculated by dividing the revenue (minus refunds) generated by a customer cohort by the number of customers in that cohort. This metric evolves over time, reflecting changes in customer behavior and monetization patterns.
Strategic insights from realized LTV: Utilizing LTV data can directly inform your user engagement strategies. By identifying features or content that contribute to higher LTV, you can refine your app to better align with what users value most, enhancing engagement and, in turn, driving revenue growth. Over time, as you improve your product, you should be
Optimizing pricing with realized LTV: Realized LTV should be your standard measure for judging pricing experiments, providing insights into the long-term revenue impact of various pricing strategies. RevenueCat Experiments makes this possible by tracking Realized LTV across different pricing variants, enabling data-driven decisions to optimize your subscription pricing for enhanced customer value and revenue growth.
What is a good engagement rate for apps?
When it comes to engagement rates, there’s no one-size-fits-all answer. It’s like asking, “What’s a good temperature?” — it depends on the context. For apps, a “good” engagement rate varies widely depending on the type of app, its user base, and its specific goals.
Understanding engagement rate variability:
- Different strokes for different folks: Just like how social media apps and productivity apps serve different needs, their engagement rates are measured differently. A daily use app like a social media platform might expect much higher engagement rates than, say, a weekly meal planning app.
- Engagement goals: What does engagement mean for your app? Is it daily logins, completion of key actions, or content sharing? Your app’s purpose decides what a good engagement rate looks like.
- Industry benchmarks: While specific numbers can be elusive, industry benchmarks can provide a rough idea. However, these benchmarks should be taken as guidelines, not gospel.
The best place to find benchmark numbers for your monetization and subscription metrics — which, as we’ve seen in previous sections, are important measures of user engagement — you should review our State of Subscription Apps report.
Wrapping up on app engagement metrics
Each app engagement metric we discuss gives a unique look at how users engage with your app. They help you figure out if your app is useful and solves a user problem. Metrics like LTV include elements of monetization and revenue. This approach takes you a step further. It helps you understand if your app is not just useful, but also valuable.
Are there particular metrics where your app excels or falls short? What do these patterns tell you about your users and your app’s value proposition?