How chat API boosts customer retention in mobile apps
Ever since the precipitous rise and fall of “app installs,” or acquisition, as the main metric for mobile companies, product owners and marketers have focused their efforts on customer retention. Here are some numbers you’ll see cited all over the internet:
- roughly 1 out of 4 people abandon an app after one use
- depending on your industry, the acquiring new users is 5x – 25x more expensive than retaining a current user
- a 5% increase in customer retention can lead to a 25-95% increase in revenue 
Whether these numbers actually describe your specific use-case, they’ve already had a mythological effect on the mobile industry. It’s common to think, “If your product can’t retain users, then it must be a bad product.” Our most recent story is therefore about retention.
There are now some classic hacks for increasing customer retention that require us to engage our users in meaningful and relevant ways (read: without spamming them). There isn’t space to cover all the retention strategies out there. Still, I’d like to move through a few of them here because it’s always helpful to reinforce old hacks that work.
Ultimately, though, I’d like to show that all these hacks replace and transform what would be conversations in face-to-face interactions. Of course, there’s good news on this front. Your app, even if it isn’t a social app, can boost customer retention by bringing that conversation back into your app.
On-boarding users for retention
First is good UX during an excellent on-boarding experience that educates the customer about your app and highlights its key or quirky features. This makes sense. If your customer understands how to use your app and how it adds value to their life from the get go, then it makes intuitive sense that they’ll be more likely to use it again without frustration or other obstacles.
Engage your users with targeted messages
Let’s say your on-boarding flow is so smooth that you’ve already educated the user on your app’s main features and directed them to a target conversion, but afterwards your user no longer opens your app. Here, retention dictates that you keep your user engaged. Enter the targeted message. If they agree to accept messages, you can intelligently ping a customer with content relevant to them. Here data on user-segments becomes valuable because you can direct them to the content that matters. So if I’m a Warriors or Cavs fan, then maybe I receive a message about my team’s score and it takes me immediately to a live video feed of the game, or a replay of Steph Curry’s half-court shot, or Lebron’s alley-oop. Great! That’s exactly what I want to see again and then share with my father-in-law, who likes the wrong team. Studies show that messages relevant to an event that I care about (say, the NBA finals) are even more effective attracting users back to an app.
Re-market to users, especially if they opt out of receiving messages
Targeted messages are a great way to reach customers outside the app environment, but they also require approval by the user. So how can you reach those people protective of their home screen? Various re-marketing tactics can work well. Take Instagram, for example. I am the world’s laziest Instagrammer. I haven’t opened the app in, say, two weeks. Instagram sends me an e-mail telling me I have 5 new followers and suggests I might like following Black Star. How do they know that (1) I either listened to Black Star in the 90s, or (2) I recently watched David Bowie’s new music video? Amazing…or creepy! Whatever, it works. I’m on Instagram again, and I am marveling at the 13 likes that I average per photo. This small example illustrates, too, that data can help make re-marketing extremely effective.
Customer retention appeals to feelings inspired by social interaction
So what’s that feeling? Why do I keep looking at the photos I posted to see who liked them? Well, it’s probably because I don’t get a lot of likes and I can see them all at a glance. But it’s more likely because Instagram makes me feel something. Inducing a feeling in your users is powerful for retention. We all know a range of these feelings—from the FOMO amplified by Facebook, to the satisfaction we feel when we share a beautiful picture from a hike, or the dopamine hit and excitement we feel swiping left or right on Tinder.
Create social interactions in-app with native chat
But let’s assume that’s not your app’s wheelhouse, or, at least, maybe it isn’t a social networking app. How can we buildout the range of your app’s feelings, powerful or otherwise, to retain customers? You might notice, for instance, that all my examples in the last paragraph trade in media that stand in for a social interaction. You don’t need to be a social app to be social or appeal to social feeling. Even if your app doesn’t facilitate a social interaction as its core product, you can still create an in-app environment where people can be social about it. Although there are many ways to do this inside your app, SendBird believes that behind every click, tap, purchase, or form is a conversation.
You can build opportunities to have that very conversation in your app environment by leveraging a chat API like SendBird’s. For one, chat creates meaningful opportunities to send messages to users. Since chat is asynchronous—that is, you can send a message and expect its recipient to respond in his or her own time—messages accumulate when users do not enter the app. A numbered badge above your app icon can indicate to your user that he or she has missed a message. This could be enough to pull them back into your app. But if they allow push-notifications, you can send a stronger message: “Adrianna sent you a message,” which could start them in your app right where they left off.
But why stop the conversation there? Remember that our products mediate—they re-package and replace—conversations that already take place in our everyday lives. Sure, not everyone wants to interact with another person when they’re, say, shopping. Obviously, with chat, they have the option to socialize without it being necessary (again, because of asynchronicity). But what if the user has a genuine question for service providers, or if they want to crowdsource information by chatting with other users, or if they want to share with family and friends? These connections create gravitational attractions and feelings that bring users back to apps, and create satisfying user experiences inside your app. Without chat, you leave your users to their own devices (pun intended). With chat, you can return excellent service and social feeling to the app environment.
Conclusion: Messaging creates satisfaction creates better customer retention
In the June 2017 volume of “Computers in Human Behavior,” psychologists conducted the first randomized controlled study about whether the support from text-messaging could compete with support in-person after a stressful experience.  They found, in general, that person-to-person interactions among emerging adults created more positive feelings than texting. But, crucially, they also found that satisfaction among text communication was generally high and, surprisingly, satisfaction was as high as in-person communication when it was among friends. Positive and negative feelings aside, messaging creates a high level of satisfaction. Given all the opportunities that chat creates to attract people to your app, the satisfaction generated could lead to a boost in retention beyond the classic growth hacks.
 See Caitlin O’Connell, “23% of Users Abandon an App After One Use,” Localytics Blog, May 2016, http://info.localytics.com/blog/23-of-users-abandon-an-app-after-one-use; Amy Gallo, “The Value of Keeping the Right Customers,” Harvard Business Review, October 2014, https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
 Susan Holtzman, et. al, “Emotional support during times of stress: Can text messaging compete with in-person interactions?” Computers in Human Behavior, Vol. 71, June 2017, 130-139. http://www.sciencedirect.com/science/article/pii/S0747563217300559
Alek is a Marketing Manager at SendBird. He received his Ph.D. in English Literature at UC Berkeley in 2017 and B.S in Mechanical Engineering before that. He loves to see problems clearly, find solutions, and tell great stories about them.