Simple metrics to track in app user acquisition funnels (appiterate.com)

Ever wondered why Facebook bought Instagram for $1bn? Why did it offer $3bn for Snapchat?

One major reason is because they have insanely amazing traction and pose a threat to Facebook. They have the right set of features and are very easy to use.

So, how did they become so addictive?

Because they clearly identified who their users were, measured everything they did, understood what their users wanted and modified their apps to suit their taste. In other words, they have optimized their user acquisition funnel.

That’s why it is important to track the following metrics to improve your app’s user acquisition funnel. They give a good sense of user behavior, tell you where to look for growth and how to refine your app accordingly.

Downloads or Signups

It is the number of people who have downloaded or signed up for your app. Initially, you can start by looking at number of downloads or signups every day or week. But, as you grow, it is important to view this app metric by type of device, location, etc or other details to understand your important user bases. You can also break it up by other demographic details like age, gender etc, if you collect any such information after signup. You need to clearly identify the most responsive source of signups in order to maximize it. Or else you will be targeting the wrong audience and adding features which are ineffective.

Google has recently integrated Google Analytics into its Google Play Developer Console. You must definitely use it to track the above metrics and monetize your apps faster. It helps you create referral flows and also shows the distribution of your users.

Usage

One of the most common complaints of app owners is that users download or signup for their app and stop using it after a period of time. It is important to measure how frequently users use your app. This app metric can be tracked in multiple ways. You can check how many times a user logs into your app every day or week. If they remain logged in all the time, you can track how many times users use your most important feature.

For example, Whatsapp is a messaging app. For them, the number of chat messages are way more important than images uploaded, or groups created or contacts made. If they track this over time, they can be assured that users use their app frequently. Similarly, every app stands for a single most important feature. It is important to measure how frequently users use that one feature every day or every week. This app metric should be tracked for each user like average number of chat messages or uploaded images per user. The higher this app metric, the more the usage!

Retention

This app metric makes or breaks your app. It tells you how many are repeat users. You can define retention rate as the number of existing users who login every week or month. As mentioned above, if they are logged in all the time, you define it based on usage. You can track out of total users who logged in last week how many logged in this week. Or out of total users who uploaded images last week how many uploaded images this week. The higher this app metric, the better it is.

Retention is different from Usage. Usage is an app metric for a typical user or while retention is the number of users using your product over time. It is possible to have users who use your app a lot for a short time, meaning high usage and then stop using it completely meaning low retention. It is also possible that users don’t use your app much on a daily basis, meaning low usage but keep coming back to it regularly, meaning high retention.

As you grow, you can go a level deeper. Segment your users and track retention by user groups over time. Usually, grouping can be based on common characteristics like location, age, gender, etc. or user activity like people who place orders on weekends, during nights, etc. You can then look at retention across different groups of users over time, which is also known as Cohort Analysis.

Another proxy for retention is to check how many users have chosen to make the most recent updates. The higher the number the more people are willing to continue using your app.

Load time is also a crucial app metric to that makes people to leave your app. No one likes to use an app which takes a long time to load. A very simple way to measure this is just by observing how fast your app loads on your own smartphone. If the load time is high, you will need to track which part of your load process is causing the delay.

Paying customers

This is the most important app metric but also the easiest to measure. It is the number of people who pay for your app. You can look at weekly or monthly trends over your entire paying universe. As you grow, you can segment it by customer type based on location, age, gender, etc. This will give you an idea about the kind of users who are willing to pay for your app. You can further segment paying customers by channels of revenue like in-app ads, plan upgrades, ad platforms etc. Then, use this to optimize your paid converts and target similar people.

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You must be wondering how to do all this. Information about Usage, Retention & Paying customers is always present in your app database. Think about it. Every time a user sends a message or uploads an image, you store information about that in your app database. Every time they log in or make payment you store that information too. Otherwise, you can simply create a table in your app database which contains user id and funnel state. Update the state value for a user based on his/her action. Then you just need a dashboard/analytics tool to get these trends for you automatically every time.

You can get number of users at each stage and create a user acquisition funnel which looks like the one above. You can always add/modify the stages based on your app to get more details.

Improving user acquisition is what will differentiate your app from the crowd out there. It will lead to strong user group and growing revenues. Else, you will end up with a few signups but no stickiness and not much monetization.