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Earlier, app developers would measure the success of apps based on analytics. The statistics would determine the popularity of the app as well as provide feedback to the developers. Then came a time when an app’s download count and ratings were used as a basis to determine its success. Back then, these were the key mobile app performance metrics that everyone kept track of.
It wouldn’t be wrong to say that the days of measuring app success by the number of downloads and ratings are long gone.
Today, there are much better ways of gauging your app’s success. The metrics detailed here are vital; they can help you draw insights about your app and tell how well it is performing. In today’s increasingly competitive environment, it is important for developers to stay informed of how their app is behaving, how users are engaging with the app, and which areas they need to improve upon.
To help you keep track of the important stuff, here are five indispensable mobile app success metrics that every publisher should know inside and out.
1. Average Revenue per User (ARPU):
The Average Revenue per User is the average amount of revenue generated by an app in a given timeframe over the number of active users within the same timeframe.
Calculating ARPU is rather varied for each mobile app category and revenue model, and thus, comparison to determine app success becomes rather useless.
However, some comparisons are possible, and prove useful in determining the success of your app. For revenue models, the ARPU can help you learn more about the revenue being generated as a result of your advertisement campaigns, in-app purchases, subscriptions, etc. for making comparison somewhat easier.
Why does ARPU matter?
The ARPU is helpful in calculating the average revenue being generated per user. This figure is very important because of its resourcefulness in other metrics.
Once the ARPU has been calculated, you can use it with other metrics to better understand your app’s success. ARPU works best when combined with the Cost per Loyal User (CPLU) and with Retention.
When used with CPLU, ARPU provides you with better knowledge on how to optimally budget you advertisement expenditures and marketing campaigns. If the ARPU is greater than CPLU, you are doing things the right way. In other words, your mobile customers must generate more revenue than what it costs to acquire them.
When used with Retention, ARPU can help you find out the lifetime value (LTV) of loyal customers. Say, a user generates $0.40 per month on average and is retained for one year, the predicted lifetime value of that person will be $4.80.
2. Cost Per Install (CPI), Cost Per Loyal User (CPLU)
The Cost per Install (CPI) is calculated by tracking ‘paid installs’ instead of organic installs, i.e. the acquisition costs for those customers that installed your app in response to seeing an advertisement.
According to Fiksu:
- CPI for iOS dropped to $1.32 since last month, but increased 26 percent since August last year.
- On Android, CPI decreased to $1.91, dropping 30 percent in August but increasing by 103 percent from last year.
The Cost per Loyal User metric is the cost of acquiring a loyal user for marketed apps (paid campaigns). A loyal user is one who opens your app at least three times. The CPLU is actually derived by dividing the advertisement expenses over the number of new loyal users acquired in response to ads.
According to Fiksu:
- The CPLU Index rose to an all-time high of $4.04 in August, 2015.
- This represents a 36 percent increase month-over-month and 117 percent rise year-over-year.
Why do CPI, CPLU matter?
As said earlier, CPI and CPLU are best used when combined with ARPU to calculate the return on investment for your paid campaigns. In order for your campaigns to become meaningful, your ARPU must be greater than the CPLU. Most stakeholders fail to make sense out of this, but make a note that your costs to acquire a user must be well below the amount of revenue generated by the user if you are to profit.
3. Engagement: Keep them in the loop
Engagement, unlike other metrics listed here, has no set definition or a predefined formula to figure it out. Only in the context of the mobile app and its mobile marketing strategy can we define engagement. It is better to understand how users are interacting with a particular mobile app, and by understanding user behavior, you are better able to find out the elements that appeal more to the users, or what elements are unnecessary.
Having said that, engagement is most often thought in terms of the desire to use an app much frequently, and longer.
Although engagement itself does not rank as a metric, there are several other concrete metrics that converge underneath its umbrella. They are discussed as following.
- App screens per session: How many different screens of your app does a customer launch in a single session? The more screens are launched, the more engaging your app is.
- Session interval: How frequently do users launch your app?
- Session length: In a single session, how much time does a user spend in your app on average.
- Interactions: What portion of the total number of customers are prompted and reached out? How many customers respond to the message or prompt?
- Conversion rate: What percentage of customers complete an action within your app?
- Opt-ins: What number of users sign up for additional notifications and alerts?
- Opt-outs: How many customers request fewer notifications or alerts?
Engagement too varies by the nature of the app and by its category.
Why does engagement matter?
Satisfied users are your app’s staff of life, and this is why user experience is the foremost concern for most app developers. The more engaging the user experience is, the more likely it is that your app will be referred to others. Stellar reviews and positive, healthy feedback are what all developers crave for. Besides, engaged customers are likely to bring in more profit for the app, and add to the loyal user base.
With the help of efficient analytics tool, you can divide your users into segments, narrowing down more engaged users to reveal recurring behavior, and analyzing their movement within the app to gain helpful insights. This narrowing down of user behavior will inform of you of what actions are the most engaging, how long users stay engaged on your app, and how their engagement levels change over time.
4. Crash Reports
As said earlier, user experience matters. One most important mobile app metric you must track is the crash reports, as it is directly proportional to user experience.
Very frequent crashes will put your app in poor taste, and garner a discontented user base. This is true for all apps, no matter how engaging, entertaining, or resourceful the app is; it won’t last long if its users have to experience constant crashes.
You must review crash reports more than often to know how frequently and why your users reach a dead end. By frequent checks, you can be on top of the issues that inhibit your app’s success.
5. Retention
Retention is the estimation of users returning to your mobile app on a defined basis, i.e. how many users actively use your app after a week, month, or year.
Two particular formulas used for determining the retention rate are: aggregate retention, and retention over a
specified time.
Aggregate retention is calculated by dividing the number of monthly active users over the total number of app installs during the same period.
Determining the retention rate over a specified time requires you to note the total number of users you have managed to retain at the end of a given period, and divide it by the number of installs at the start of that given time period.
On average, an app is able to retain 40% of its users after one month, and a meager 4% at the end of a year.
Why does retention matter?
Knowing the retention rate of your app indicates the success of your app, and your current user-base. Apps with hundreds and thousands of downloads might look successful to the eye, but may not have much active users to boast about.
By continuously increasing CPLUs and CPIs, mobile development companies can cut costs while boosting results, and drive the same growth from acquisition to retention.
Conclusion
It is important for you to develop a better understanding of these metrics as it gives you more control and authority to drive your app’s revenue stream. With these, you can:
- Provide more value to every user in order to increase revenue, and hence increase the ARPU.
- Through effective and targeted marketing campaigns, decrease Cost per Loyal User (CPLU) and increase your profits.
- Engage more customers, increase the monthly active users, and hence increase revenue.
- Keep a check on the app performance and crash reports to provide an uninterrupted and streamlined user experience. This increases the probability of retaining a user and converting it into a loyal user.
- Design your marketing campaigns and strategies around user retention, rather than acquisition, in order to increase profits.
To sum it up, engaging users is an extremely daunting task, retaining them is even more difficult. Apps that fail to deliver instant value and a captivating initial experience, face a major challenge of retaining users. It is pertinent to mention here that keeping track of your metrics will help you tweak your app better, and ensure the app’s success.
Your decisions regarding your app should be data driven, and you must know when, and where you can make changes, and improve. Each change should be reassessed, its usage and effect will determine what your next move should be.
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