Determining The True Value Of An Engaged Mobile App User
Acquiring mobile app users is one thing; but acquiring engaged mobile app users is another altogether. Let’s say for a moment your brand has just launched an ecommerce app meant to make shopping easier for customers. It’s appealing to potential consumers because it securely stores their payment and delivery information; so, all they must do in the future is pick out the products they like and hit check out. But now you’re focusing on marketing this ecommerce app— and your campaign has acquired Customer A and Customer B. Your efforts have paid off, right?
Well, it’s hard to tell using this information alone. You see, Customer A could log into the app once, buy an inexpensive trinket and exit out. The app may sit dormant on their mobile device, or they may soon delete it to free up space. Meanwhile, Customer B buys a modest cartload, signs up for push notifications to hear about future promotions, then returns a week later to shop again. It’s clear that your relationship with Customer B is a more rewarding engagement for both parties. Why? Because the customer lifetime value (CLV) is higher for people who engage with your app repeatedly over time.
Many marketers get stuck on customer acquisition costs (CAC). While it’s an important metric to be sure – it compares your ad spend to the number of new customers acquired due to those marketing efforts – it’s not the whole story. Getting people to download and install your app is just the beginning of the journey. It doesn’t dictate how the rest of a user’s interactions will unfold.
It’s more useful to consider the value of the customer over time. How long do they continue to interact with your brand? Do they purchase premium content or access? Are you acquiring people prone to engaging with apps like yours, or are you spending money on marketing that captures “one and done” buyers?
The best way to meet your post-install goals — that is, actions by users who engage in events after initial installation – is to participate in mobile analytics. These metrics will let you know what’s working and what needs a little extra optimization. For example, let’s say you’ve decided to target users who match your established user base, also known as a “lookalike audience.” The ability to use mobile analytics to compare different segments of your audience will help you refine your campaigns, so you don’t waste money serving ads to people who are more likely to have a low CLV.
Setting accurate post-install goals means evaluating what each user action is worth to your company. For instance, someone creating a personal profile on your dating app is worth something because it demonstrates they’re likely interested in interacting with others or revisiting the app periodically. But enrolling in a paid plan so they can unlock potential dates in their area is worth even more—and choosing the best premium paid plan with all the perks has an even higher value. It’s all relative, and first your brand must define what each action is worth, so you can accurately track the worth of your users over time.
In a world where only about one-fourth of apps downloaded to devices using iOS are retained for a day or more— and only 3 percent of apps downloaded to iOS devices see regular users after 30 days — it’s more important than ever to do what you can up front to target the right kind of users. The true value of an engaged mobile app user is that they keep providing value over time. In other words, it should be a relationship, not a one-time transaction.
Start by determining the expected CLV of users by putting a price tag on post-install events like subscriptions, in-game purchases, comments, orders and more, then compare it to CAC to assess how your campaigns are going. After all, the ultimate objective is to get and keep high-value app users.