Standard retention metrics feel misleading when users download but never actually engage.
Trying to figure out better ways to measure who’s really sticking around versus just inflating numbers with ghost users.
What retention calculations actually correlate with revenue growth?
Skip day 1 retention entirely. Focus on day 3 and day 30 retention of users who complete a valuable action. Most apps see 60-80% day 1 retention but only 20% day 3. The drop tells you everything about real engagement. I measure retention based on users who hit a milestone that correlates with payment. For subscription apps, that’s usually completing setup plus one core workflow. For transaction apps, it’s viewing inventory or adding items to cart. Revenue retention matters more than user retention anyway. Track how much revenue each cohort generates over 90 days.
Try measuring retention from the second session instead of first install. Users who come back once have already shown real interest.
I look at weekly active users who performed your money action at least twice. This gives me a much cleaner picture of who might actually convert later.
The retention rate that matters most is usually tied to your specific monetization model, not generic day counts.
Day 7 retention usually matters more than day 30 for predicting who will pay.
I track what I call “engaged retention” instead of just install retention. Only count users who hit your core action within the first session.
For most apps I’ve worked with, this means tracking users who complete onboarding AND use the main feature. Cuts your retention numbers in half but gives you data that actually predicts revenue.
Also started measuring retention cohorts by acquisition source. Organic users from search usually have 2-3x better month 1 retention than paid social traffic. Helps you see which channels bring real users versus just downloads.
The metric that correlates best with revenue growth is usually day 7 retention of engaged users. If someone makes it a week while actually using your app, they’re likely to stick around and eventually pay.
This covers the math behind retention calculations that actually matter for business health.
Only count retention after users create something in your app.