The main reason for developing a new app is attracting new users. You would like your app to be the most downloaded app on app stores. Because more the users, more revenue, right? Well, apparently, this logic turns out to be wrong. According to new research, nurturing your current loyal customers lead to greater profits; 80% of a company’s revenue comes from 20%.

Thus, it would be wise to invest the time and money on customer retention increase of spending the same amount in acquiring new users. Evidently, what matters is the quality of users, rather than the quantity. Here’s why:

A GROUP OF DEVOTED OPINION LEADERS

Your early adopters or early users are so loyal to you that they will convert their friends, family, and coworkers into co-loyalists of your app — only as long as they are happy with you. The best thing about this approach is that it is cheap; referrals are the most inexpensive growth channel.

RATINGS COUNT

If you please your existing customers, it will definitely reflect on your ratings. Psychology goes something like this – if your app is rated one star by users, nobody will look at it or consider buying it. On the other hand, if it is rated five stars, you company will be able to make a decent earning.

ALL ABOARD

Your existing users are valuable because they are already on board. They have successfully passed through all the blockage points in user acquisition funnel. They did not lose interest and did not stop using the app. Since they have made it past one or more blockage points already, chances are that now they will give a greater commitment to your app.

Although the benefits of focusing on retention are way too high many businesses still pay more attention to expansion. Of course, you should try to expand your business, but not at the cost of your current customers. Before you try to spread your app like wildfire, nurture the loyal flame of your current users.