What is Retention Rate?

Retention Rate is the percentage of users who return to your app after their first use, over a given time frame.

Consider this scenario: if 1,000 users install your app on Day 0 and 300 of them open it again on Day 7, your Day-7 retention rate is 30%. It shows how sticky or valuable your app is to users.

How does it work?

The formula is:

Retention Rate = (Returning users on day X ÷ Total users who installed on day 0) × 100

Retention is typically tracked in daily buckets:

• Day 1 retention (did they come back the next day?)
  
  

• Day 7 retention (a good signal of early value)
  
  

• Day 30 retention (long-term engagement)

Some apps also look at rolling retention or N-day retention, depending on the use case (e.g., daily-use apps vs. weekly-use apps).

You can also break retention down by cohort, acquisition channel, region, and platform to identify what’s driving stronger performance.

Why it matters

Retention is one of the most important health metrics for any app. It answers the question:
Do people find this app valuable enough to keep using it?

Strong retention means your product solves a real need. It increases LTV, improves ROAS, and reduces pressure on constant acquisition.

Poor retention, on the other hand, leads to high churn, wasted ad spend, and stalled growth. That’s why early-stage teams obsess over retention before scaling.

If users don’t come back, nothing else matters.