I have written many times about LTV (customer lifetime value) being the lifeblood for a successful business, as a new customer has to have a higher LTV than the cost of acquiring the customer, and how retention is the biggest driver of LTV. Given the importance of retention, a recent article by Google’s Adam Carpenter, Why the first ten minutes are crucial if you want to keep players coming back , provides great guidance on what to measure and then improve to have the most impact on improving retention.
Retaining new installs is arguably the most important driver for whether your product succeeds or fails. As Carpenter says, “retention is the primary metric, since if you can retain your new players, you can always figure out how to make money. If you can’t retain any players, you have no ability to make money.”
The metric to focus on is your day 2 retention (D2). According to Google’s data, median day 2 retention (number of users active on the day after they installed your game divided by the number of installs in your cohort) is 38 percent, while exceeding 46 percent puts your product in the top quartile (3/4 of all products would be doing worse than you if hit this target). Conversely, if your D2 is 22 percent, then 78 percent of the players you pay to acquire do not come back the next day. It is very hard to justify marketing spend if 78 percent is wasted.
What you should be looking at
While the amount of time a player spends in your game after they install it is important, the critical factor is the first ten minutes. If you divide Carpenter’s data by performance, the strongest games (top quartile) average Day 2 retention of 52 percent, with 22 percent returning the next day with virtually no gameplay the first day and then seeing D2 steadily increase with each successive minute played (see chart below). The second quartile has a similar curve but starts at a lower point. The key, though, is the impact from the first ten minutes.
The first ten minutes
In Carpenter’s analysis, performance is driven by how quickly in the first ten minutes you lose players. For games in the top quartile, retention starts out good and steadily improves. In the second quartile, retention is essentially flat across the first minute and a half, and then begins to increase steadily. In the third quartile, retention is largely flat for the first four minutes, then increases but more slowly than highly performing games. In the lowest quartile, retention declines in the first two minutes and does not start to improve until the fifth minute.
These early patterns have a strong impact on players. The worst apps lose 46 percent of their new installs by the fifth minute and this number increases to 58 percent by minute ten (so in less than ten minutes you have less than half the players you have spent money acquiring). The top games, however, only lose 17 percent of players by the fifth minute and 24 percent within ten minutes (retaining more than twice as many players as the lowest group).
How to improve your situation
Once you understand the importance of the first ten minutes, you need to focus on improving this performance. Carpenter explain this as avoiding retention flats and gorges. “The first pattern is called the ‘Flats’. This anti-pattern shows largely flat retention for up to 10 minutes, with the percentages only rising meaningfully after the 5th to 10th minute. The second is the ‘Gorge’, whereby retention appears to drop minute by minute for the first five minutes or so, and then begins to rise again.”
Once you review your data, you can understand if you are suffering flats or gorges. To alter the curves, you can then:
- Improve loading times. Evaluate your loading times, keeping in mind new players are particularly sensitive to long loading times (they are have not yet decided they want to wait). In my experience, even a fraction of a second will surprisingly have a bigger impact than many sexy features.
- Avoid large secondary download. You may improve loading times by creating a long secondary download but the impact can be equally damaging. Players, particularly those on a poor wireless connection, may abandon your game.
- Make the lobby intuitive. Allow players to find quickly the action (and the action they want) in the game. If you are using a tutorial, ensure a smooth transition from the tutorial to where your player wants to go.
- Enhance or eliminate the tutorial. Speaking of tutorials, they are largely a reason to leave a game; rather than enjoying the product customers are being sent to school. See if you really need a tutorial and, if you do, how you can make it more fun.
- Do not overload player with promotions. Your goal on D1 is to get your player back on D2, monetization is a bonus on top of this goal. If the player returns, you will have many opportunities to monetize them. Do not sacrifice D2 retention by distracting players with sales and offers, have them focus on enjoying the game. I prefer to have none or at most one monetization promotion on day one.
By focusing on a quick, fun experience, you are more likely to get your customer to return on Day 2. As the Google data shows, if you get them back the next day, you will enjoy greater long-term success. By increasing this one KPI, you will experience a disproportionate positive impact on your LTV.
- Retention is the strongest driver of LTV and data from Google shows the most important retention KPI is the amount of players who return on day 2 after installing your game.
- The strongest driver of D2 retention is how many minutes your customers stay/play within the first ten minutes of starting the app.
- To improve retention between the first and second days, make the early experience faster and more fun by improving load times (while reducing secondary loading), making your lobby intuitive, and not distracting your player with a bad tutorial or promotions.