What metrics are most important to my mobile app business?
Great question, Carl — this is both an easy and difficult question to answer. There isn’t a one-size-fits-all set of key performance indicators (KPIs), but what follows is a primer that will provide a few things to think about.
Obviously downloads are a key metric for any app provider, but the number means nothing without context. “Downloads only enable an app to succeed, they do not indicate actual success,” says Brant DeBow, EVP of technology at BiTE Interactive. “Too many brands are still concerned with ‘eyeballs,’ treating apps as if they are a TV ad.”
Apps present a unique opportunity for brands, and they should not be treated as an app version of the website. The best apps have “stickiness” and offer something inherently valuable to users. Think about it: Your brand has the opportunity to be in the palms of users practically 24/7, and it should not be wasted. Your app should bring something fresh and exciting to the table, enhancing the customer experience and boosting loyalty and brand affinity. For example, MLSworked with Double Encore to develop an app, which could have been a channel through which to check scores and watch games. Instead, the app was built to be a soccer fan’s ultimate companion, immersing the fan in soccer culture and offering information and an experience that the website didn’t offer. “This is what makes an app ‘sticky’ — that ‘gotta have it’ experience you can’t get anywhere else,” says Emily Grossman, inbound marketing and community manager at Double Encore.
When you start thinking about “stickiness,” you realize how much app usage trumps app downloads, as usage suggests enjoyment, utility and value. “There’s a large dropoff between downloading an app, opening an app, signing up and then using the app,” says Pietrzak. “It’s more important to focus on people who get through these first steps and engage with an app on a regular basis.”
Of course, engagement metrics will vary depending on your industry vertical. Each business should have specific goals for its app, and then base success on the metrics that are most relevant to those goals, says Ashley Twist, mobile innovation strategist at Engauge. For example, H&R Block’s key metric is how many users schedule an appointment, but an ecommerce app is more interested in conversions, average purchase size and the point at which people abandon their shopping cart.
“There is no right or wrong in terms of what data a business should be analyzing,” says Twist, adding that organizations should strategically set business goals and determine what success would look like, for specific features of the app and for the app as a whole. Solstice Mobile CEO J Schwan offers a few sample goals:
- We hope to reach X number of session after six months
- Conversion from scanning the barcode of a product should have X% conversion rate
- Example: Implementing an enhanced support section of the application may decrease call center volume, therefore lowering operating costs
In addition to specific goals, you should have a flow in mind that you hope users will complete — register, refer friends, share content, purchase an item, link to social networks, et cetera. “These need to be tracked in such a way as to identify which users are successfully completing these flows,” says Localytics CTO and co-founder Henry Cipolla. “Perhaps more importantly, it is critical to understand which users did not complete those flows and what those users did instead.”
Now, without further ado, here are some of the most important KPIs to pay attention to when assessing the success of your mobile app.
“Truly successful apps offer a clear solution to a problem their users face
“Truly successful apps offer a clear solution to a problem their users face, with success affirmed by users visiting the app repeatedly,” says DeBow. “The worst thing for an app is to get relegated to the ‘app icon graveyard.’”
But beyond pure usage, you need to know who is using the app and how they’re using it. What’s your demographic? What’s notyour demographic? How frequently are users opening your app? Are they opening during the day or at night? Are people using the app on smartphones or tablets? Android or iOS? What’s their flow through the app?
Getting a sense of these engagement metrics will provide insights into how the app is used, letting you know where you should double-down and where you have weaknesses. This information can help you allocate resources for strengthening the app to drive greater engagement and, thereafter, revenue. “It is extremely important to do cohort analysis and be able to measure engagement by different cohorts and determine a predictive conversion model — from acquisition to engagement to monetization,” says Milind Gadekar, CEO and founder ofCloudOn.
2. Lifetime Value
“The tried-and-true metric for a marketing initiative is Lifetime Value (LTV), and it holds true for apps as well,” says Grossman. In short, LTV is the value of a mobile user as compared to a non-mobile user — if your mobile user is more loyal, spends more, and/or evangelizes more than your regular consumer, your mobile strategy is working.
How you quantify “value” depends on your vertical — a news app may value ad impressions, a music app may value time spent listening to content, a retail app would value purchases, a game may track in-game currency. The point is that knowing the value of various consumers means you can compare users and identify key segments of successful users as well as cohorts that need improvement, says Cipolla.
3. Retention Rate
It’s great if your app is the hottest thing of the moment, but you won’t be satisfied when the fleeting obsession ends. Strive for longevity, and pay attention to the app’s retention rate, specifically the one-, seven- and 30-day retention rates. “Retention is one of the biggest challenges of mobile apps today, as 65% of people stop using them three months after install,” says Cezary Pietrzak, director of marketing at Appboy, adding that an early indication of retention will also help you determine the app’s viability in the market.
Plus, app store rankings are becoming more sophisticated and focusing more on retention and engagement, so we’ll start seeing fewer flash-in-the-pan apps on the charts. “This is a good thing for consumers since retention and engagement are much better indicators of app quality,” says Timothy Sullivan, VP of product at Boxer. But it also means your app has to be really fantastic to rise to the top.
4. Active Users
Anyone can download an app, but it takes a special kind of app to compel people to use it with regularity. Your monthly active users (MAU) or daily active users (DAU) are your key users. They like your app, they use it a lot, and they may even rely on it to get them through the day. You need to learn everything about this cohort and how they’re using your app so you can create a more engaging app and convert more users into active users.
5. Session Length
There’s a difference between opening an app when you’re in line at a store and spending an hour using the app on your commute home. Just like pageviews versus time spent on the web, session length on an app can help mobile strategists “quantify the depth of a person’s relationship with an app,” says Pietrzak. You want a sticky, compelling app; stickiness lends an app toward longer sessions.
6. Average Revenue Per User
It’s great to have an engaged user base, but you probably created an app to drive revenue in some way. You might eke $100 out of your top 100 users for a cool $10,000, but if you have a user base of 15,000 people, that’s not a very impressive sum. You have to look at the whole picture, and the average revenue per user (ARPU) indicates the value of an individual to your app business.
“Revenue” will be based on the app’s price and/or in-app purchases and conversions, but when you’re determining the ARPU, keep in mind that app users shop across several channels. “To simply look at what they are buying in-app and ignore the increase in overall spend is a mistake,” says Andrea Cohen, senior marketing manager at GPShopper. She says her experience working with brands like The North Face and bebe show that app users spend 15% more online and 25% more overall on an annual basis.
7. App Launch / Load Time
Your app takes six seconds to load? As Internet wisdom tells us, “Ain’t nobody got time for that.” Time is of the essence, and it’s your responsibility to make your app loading experience as efficient and frictionless as possible, says Peter Galvin, SVP of marketing at SOASTA. Users should be able to launch the app, load new pages and make purchases seamlessly without thinking, What’s taking so long? If they have time to think that, they’ve probably already jumped to your competitor’s app.
8. User Acquisition
One way to acquire new users is to study how existing users found your app, whether through organic search, paid advertisements, in-app referrals or word of mouth. People are drawn to different kinds of apps for different reasons, and it’s useful to know the best way to reach your target audience. Guy Rosen, CEO of Onavo Insights, cites how aggressive paid advertising has helped Candy Crush convert more than 20% of U.S. iPhone owners to active players of the game.
9. User Experience / Happiness
Are people spending five minutes actually extracting value from your app, or are they trying to find the page they’re looking for, tapping through pages in a frustrated state? Just because someone is using the app doesn’t mean they’re enjoying the app. Of course, you can scope out reviews and ratings on app stores, but you can also use tools like Helpshift and in-app messaging to get feedback about crashes, bugs and UI using that feedback to enhance the user experience.
There you have it — nine important mobile app metrics to know. Before you dive into the analytics of your mobile app, be sure to determine the few KPIs that are most important to your business, and focus on those. “Tracking too much data won’t improve your business, but taking action on key insights will make a difference,” says Pietrzak.
What did we miss, and what KPI does your company pay most attention to? Tell us in the comments.