Tag Archives: user acquisition

Lifetime Value of Users

Understanding the Lifetime Value of Users

Not all users provide the same value to an app. Multiple casual users provide different benefits than a few dedicated ones who constantly use the app, for while all users are important, the ones that continually use it provide more to an app’s success than those who just download it.  This is why it’s necessary to understand the lifetime value of app users, from those who download an app and never open it to “super users” who use it on a daily basis.

This lifetime value is determined by looking at three important benchmarks:

  • How much they spend
  • How long they use the app
  • How many new users they bring in

Each benchmark is important for determining an app’s success and long-term value.

This does not mean that short-term users aren’t valuable. Users that spend nothing but bring in several new downloads can still provide value. This is also true for a user who spends a great deal but stops using the app after a few weeks.

Average User

The value of the “average” user is the mean value from all users, ranging from those who never spend a thing to the few who provide the vast majority of profits. This is the baseline from which all other values are determined.

While the numbers will fluctuate based on the company, Forbes estimates that the average revenue per app user comes in at around $3. However, this value is offset by apps that bring in a large amount of revenue, such as Google. The median value, which is closer to what most apps will see, is less than $2.

When considering these numbers, the app’s cost per user must also be deducted, which makes the value significantly lower. Successful apps can see millions of users on a daily basis, causing a large quantity of these “average” users to contribute at a high value.

Despite having so many average users, their combined lifetime values will most likely never amount to the value of a single “super user.”

Super Users

The highest-value users, referred to as “super users,” are those who use the app on a daily basis and constantly spend money on it. These users contribute most to the app’s success in terms of profits and bringing in new users.

Super users make a small fraction of the app’s users, based on the Pareto Principle, or the 80/20 Rule. This rule states that 20 percent of users will create 80 percent of the profit within an app. Super users themselves are a small percentage of that 20 percent, yet they create the majority of the app’s profits.

In terms of monetary value, super users will spend far more than the average user. Microtransactions create the biggest divide in this regard. The super users are those who will frequently make in-app purchases in addition to using the app consistently, with some paying tens of thousands of dollars to unlock everything. They also tend to invite their friends to join, thus providing more value.

The super users provide the highest lifetime value. A single one may spend more than hundreds of other users combined, even though they only make up a fraction of an app’s user base. This is why it’s important to pay attention to these users, but still not neglect the other, more common users, who provide their own value.

Frequent Visitors, Infrequent Spenders

The two most common users are those who use the app often but rarely spend anything on it and those that use the app rarely but tend to spend when they do.

These users are ones who browse a shopping app but wait for a sale, or those who use the app only when they know what they want to buy. They’re the users who play a mobile game but don’t buy any microtransactions, or listen to a music app and sit through commercials rather than upgrade.

There is value in these users. Having active users is important to the success of an app, even if they make purchases less frequently. Their numbers still count towards total users and can compensate for their lack of activity with high spending or vice-versa.

It is possible to convert these users into higher value users. Special discounts and deals can encourage them to spend more per visit or to visit more frequently. Using limited time offers is a great way to attract infrequent users.

While this group may not provide the same value as super users, they still contribute to the 80% of users that help make an app successful.

Download and Delete

Unfortunately, some users who download an app do not stay long enough to contribute to its success. They’re the ones who use the app once then forget about it, or worse, delete the app without even using it. Since they do not spend any money on the app and they’re not active or bring anyone new, these users provide no value.

In order to limit these users, it’s imperative to have strong user retention strategies. This means providing them with good service and an easy flow from the start. Make the onboarding process smooth and quick, provide value early on and give incentives to use the app.

Without focusing on retention, you may find more users slipping into the “no value” category. Even those who provide a good initial value can have a lower lifetime value overall if the app fails to keep them coming back in the long run.

To Conclude

The lifetime value of a user is determined not only by how much money they spend but also by the time they expend on the app and how many users they bring in. While super users provide the greatest value in all three benchmarks, they make up only a small percentage of an app’s user base. The remainder of an app’s value comes from the average users who should not be neglected. This is important to ensure long-term success and a steady retention rate.

 

app-marketing-services

What Marketing Services Should You Expect From an App Agency?

With so many companies offering app marketing services, evaluating not only the providers but the service can be overwhelming and even subject to circumstance and debate.

There are; however, several common services that marketing agencies should offer and demonstrate strength with as they are crucial to mobile app ROI.

Marketing Strategy Development

App developers can expect just about any app marketing service to offer assistance with marketing strategy development.

Some companies offer initial marketing strategy development and ongoing strategy development as two separate services while others combine the two; however, successful app marketing starts with a jointly built strategy.

Marketing strategy development is not something that an app marketing service does in a vacuum, but works collaboratively with the marketing, design and development teams or project management staff.

After the marketing plan has been created, quarterly reviews (at least) with the marketing agency should be scheduled to re-evaluate and adapt the plan to market changes and customer feedback.

App Store Optimization

The way in which an app is listed differs depending on which platform it is sold on.

Google Play has different rules than Apple’s app store; however, both stores offer opportunities for creators to optimize an app’s title and description so that the app will be highly visible both in the app store and on Google’s search engine.

Given that the app stores are the main way users discover and search for mobile apps – ASO should not just be an offering but a primary strength.

Of course Gummicube leads with enterprise-level app store optimization and also partners with some of the world’s largest marketing agencies to provide ASO research, tools and data to compliment and extend their offerings.

Other Forms of Optimization

As mobile apps have taken over how we interact with almost every facet of our lives, the path to apps and the content in apps have started to grow as well.

Partnering with thought-leaders in your niche, building new channels for acquisition and engagement outside of the mobile app, and even traditional SEO efforts are starting to become a bigger part of mobile app marketing plans.

Increasingly, the same forms of marketing that are employed to sell other goods and/or services online are used to create awareness of mobile apps as well.

Many of these “off-app” efforts can have a positive impact on ASO as well, as Google uses social signals (“backlinks”) in their Google Play ranking algorithm.

The partnership with a thought-leader has the potential to drive downloads and a strong social signal as measured by links from their site and social accounts to your app store listing!

Data Analytics

Between offline and online marketing efforts, website analytics, and now mobile user and app store data – it is easy to drown in numbers.

Your app marketing service provider should help you navigate through mobile app and app store data to uncover actionable insights.

In many cases, data collected in the mobile app and from the app stores can help identify and prioritize issues and opportunities.

This data includes not only number of sales but also geographic location of buyers, which days the sales were made on, how many people actually use the app on a regular basis, why and where users drop off, which features are the most popular and what potential users are searching for.

While an app creator may be able to gather this data without professional help, app marketing companies (should) do more than just register and compile data.

Market Research

Market research goes beyond collecting and analyzing stats.

It may involve conducting surveys, running focus groups, analyzing competitor performance or using app store data to research the preferences and needs of a company’s target audience.

In any case, it is a useful way to determine how an app can successfully reach its target audience and how to optimize or adjust for discovery and use.

Market research – specifically app store research using app store data – can help a company stay ahead of competitors by locating areas of demand or weakness ripe for solving.


 

There are many cases where working with several marketing partners or agencies is not efficient (time or expense).  If you have a significant investment in mobile, or your company sees the opportunity in developing mobile apps – your marketing partners should be able to address at least the above.

If they don’t have convincing answers or approaches to address the mobile opportunity, consider partnering with an agency just for mobile until your current partner either catches up or you move to a more modern agency.

mobile app promotion

5 Steps For App Launch Success

You’ve spent months, perhaps even years, developing an app that you know is the best thing since sliced bread.

Your team has poured heart and soul into this project and cannot wait until launch day.

However, without an effective pre-launch strategy for your app, it will more than likely flop.

To be sure your app launch goes swimmingly, follow these top 5 steps for app launch success and mobile app promotion.

1. Begin Marketing Early

Many app developers wait to market their product when their launch date gets close.

This can turn into a major mistake as they are wasting valuable time. Ideally, the marketing of an app should start when development begins.

From day one, you should also begin to develop a marketing strategy and implement it as soon as possible. Experts suggest viewing your marketing efforts as a crescendo; something that will start out small, grow over time, and peak with the release of your app.

It’s never too early to start building a loyal fan base for your app.

2. Consider Exclusivity

You can create a buzz around your app if you choose to focus on word-of-mouth marketing.

For example, Spotify started in the USA by invitation only. The exclusivity of Spotify got people talking about this app and got people sharing it. This strategy ensured people wanted it and made people feel important if they had it. Spotify’s creators lit a match and sat back to watch the world catch fire with their exclusivity.

You could do the same with your next app.

3. Make Sure Your App is Optimized

If you want your app to be found, you need to optimize it to be found in the app store. If your potential audience cannot find your app, it is worthless.

Make sure your app has keywords in its title to help it be found as well as relevant keywords placed in its description. This marketing step is so important that app development companies have added app store optimization as a step in the development and marketing process.

4. Incorporate Calls to Action on Social Media

Another key to increasing your user base will be to include social calls to action within your app.

Many existing apps have found clever ways to do this. Users can post their game progress or newest virtual fashion accessories they have developed on their Facebook page or they can share the route they took on their morning jog and how many miles they conquered.

Building a social action call into your app will create free marketing for you. Friends and acquaintances on social media platforms will see your app posted on a page and want to find out more.

Many people also enjoy an app more if they have the ability to share something they have done with it on a social media platform.

5. Get Beta Testers

Along the same lines as exclusivity and word-of-mouth is beta testing. Select some users to get on board with your app early and grant them beta testing rights.

Not only will this step give you feedback before your app is released to the general public, but it will also help spread the word about your app’s release and help build excitement about it.

Having exclusive beta testers can make other potential users want your app even more as people always want what they can’t have yet. In addition, people want to be able to say they were a beta tester for the greatest new app or that they got in on the ground level when an app hadn’t even been released to the public yet.

Beta testing is a way to not only add more users but also to build a base of loyal users.
While you may want to focus solely on your app development and not touch its marketing until closer to the launch date, you need to start now and incorporate the aforementioned steps into your app development. Doing so will make it more successful in the long run by builder a larger, more diverse, and loyal fan base.

Choosing App Store Keywords

Choosing App Store Keywords

Choosing app store keywords for an app’s store listings has at times been viewed as the holy grail of app store optimization.

The thinking was that finding the magical combination of low competition, high traffic words would drive heaps of organic traffic to even the worst of mobile apps.

While keywords are a big part of ASO, Gummicube considers the initial selection of keywords as much less important than the building of a complete acquisition funnel, and the ongoing optimization of target keywords and phrases as they support the funnel.

The goal of app store optimization is not (only) greater visibility, but the organic acquisition of new users.  

Aim for Relevant Coverage

By changing the key performance indicator of successful ASO from “rankings” to “high LTV users acquired”,  the role keyword selection plays in the ASO process becomes clearer (and is often missed by app marketers).

We don’t want traffic, we want traffic that is likely to convert to downloads and users.

App marketers should aim for relevant coverage of keywords and phrases.

The app store algorithms are getting smarter.  Low conversions relative to position in a search result signals to Apple and Google that users are not finding your app relevant for that specific search.

The fields that have the biggest impact on search rankings are limited – with character limits on the app name/title, the keywords field (Apple) and the short description (Google Play).

Why use that valuable space targeting keywords and phrases that are not ultra-relevant to your app and prospective user?

Use App Store Data

There is and has been a lack of transparency in the app store search algorithms.  Reverse engineering the algorithms  is made harder due to a complete lack of details on app store search data.

Neither Apple or Google share search traffic or download data by category, phrase or even daily volume.

To fill the void for marketers, several companies built ASO tools using Google web search data as a proxy for app store search data.

The thinking was “something is better than nothing”.

Many optimization efforts based on web data didn’t produce results.

Meanwhile, investments in collecting proprietary app store data and working with large clients and their global app portfolios started to show the differences between how users search the app stores vs how they search the web.

Don’t take my word for it – search for “malls” on the web and then again in Google Play.  Both are using Google search, but one returns the local malls in a map, maybe a definition or items in the news, and the other returns mall-based games and shopping companions.

User intent is just different when searching the app stores.  Using web search data to optimize an app store listing doesn’t make sense.

Investing in app store optimization is the foundation of mobile app marketing, and provides a measurable long-term ROI.

Partner with an app store intelligence service like Gummicube to identify how your target market is searching the app stores, and create a plan for an optimized listing.

Build Phrases

In tracking the app stores for over 5 years, we have found 80% of app store searches are for  multi-word, features-based phrases.

That’s “cheap flights” or “zombie rpg game” or “free photo editing”.

The phrases you identify as being used by your target market when searching the app stores are likely made up of several, recurring words.

Breaking these phrases into individual words, and removing duplicates – you are left with a sort of “keywords bucket”.

If there were no constraints on the app store listing fields that impact how an app is indexed, we would be done. Just dump all of those keywords into the name and keywords field or short description.

But there are constraints (which is a good thing!).

Character limits help Apple and Google determine what is most important or relevant to the app from the publisher’s perspective.

Working with roughly 100-180 characters to build the optimal mix of words of various lengths targeting phrases of varying relevance and value is complicated.

Software that incorporates app store data can help you pick the optimal mix of words based on target phrases, category and app store competition.

Competing Apps

Speaking of which, what if the phrases we are targeting has 100’s of competitors also vying for ranking in search?

There are so many variables that determine the strength of the competition that the number (quantity) of competitors is almost meaningless.

Simply, not all competition is equal.

Relevance matters. Ratings, reviews, time since last update, downloads and conversion rates all impact how strong each competitor is for a specific search term.

The best approach given how hard it can be to evaluate competition in the app store is start with a keyword bucket that builds phrases extremely relevant to your app and its best or primary features. Adjust and optimize for those words and phrases that your app ranks well for and continue to build on your strengths.

App store optimization, and especially selecting app store keywords and phrases, requires an on-going investment in making small adjustments and improvements that grow to big results.

A word of caution:

Targeting keywords that are trademarked (Disney, MLB, Superman) will get your app rejected, removed from the store or at best have the keywords removed.

Similarly, including words in an app name/title, keywords field or description that is unrelated will also put your app at risk of rejection, removal or flagged for keyword spamming.

Learn more about selecting keywords and app store optimization.

Steps for Better App Store Rankings

4 Steps for Better App Store Rankings

A modern strategy of content marketing is investing in one great piece of content per week or month rather than posting daily articles targeting keywords. There is so much content being pushed on blogs and social media properties that to be discovered, read, shared, used – the content needs to be the best post for a given topic.

For example, Gummicube saw that most app store optimization guides were either lacking, incomplete or inconsistent with what we were seeing in the app stores with our clients. We thought we could build the best ASO guide and did.

This ASO Guide serves as a primary piece of “cornerstone content” for Gummicube and helps both introduce and educate clients and prospects.

(For those wondering, this approach is called the SkyScraper technique among other names.)

What does this have to do with apps?

Well – the same is true in the app stores. There are millions of apps available for download, how does your app find its way to the top of an app store category or relevant search results (without buying installs)?

Step 1 – Build the Best App for the Specific, Targeted Features

Your app needs to be the best option for the features, benefits, and solutions your app provides.

A narrow focus delivered beautifully is often better than mediocre at everything. The best “photo-editing app, using stickers and posting to Instagram” is better than the 50th best photo-editing app.

You likely already know the specific, differentiating features of your mobile app(s). You probably already know how they stack up vs the competition in the app stores. Before deciding to add new features – take a hard look at how your app converts app store views to installs and users.

If app store rankings are poor, it may be your app isn’t the best option for potential users. This ultimately results in low conversions and signals the app store algorithms that your app is not a good result for that search.

Step 2 – Invest in On-going App Listing Optimization

Feeling good about the benefits your app provides, and is the best option for a specific feature set?

Time to make sure every relevant search has a chance to see the magic you are providing in app form.

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There are essentially two parts to the app store ranking algorithm:

    1. how an app is indexed
    2. where it ranks

Apple and Google don’t share the specifics of how their respective algorithms work. In fact, they often make changes without providing guidance.

This is very different than how Google manages web indexing and ranking of websites, often sharing details of expected changes to their algorithm months in advance and even naming the change or addition (Penguin, Panda etc..).

What an app is indexed for is driven a great deal by the app store listing. The words and phrases used in the app title, descriptions and Apple-only “Keywords” field gives Apple and Google an idea of what your app is about and its features.

Because app listing fields have character limitations, building an optimized app listing requires finding the most relevant words to describe the app’s key features.

Rarely are the best combination of keywords and phrases discovered in the first attempt, but rather continually and incrementally improved upon over time, with small adjustments made to changing market sentiments after a proven app listing foundation has been established.

Invest in the process, as organic traffic received as the result of an optimized app listing not only provides the foundation for the rest of your app marketing efforts, but is also much less expensive than paying for installs in the short and long-term.

Step 3 – Improve Retention and Engagement

For websites – terms like “bounce rates” and “time on page” (or “session length”) hold special meaning to web marketers/SEOs.

High bounce rates or low session lengths signal to Google that a user clicked a link in the search results, didn’t find what they wanted or didn’t continue to engage with the content.

How a site performs relative to other sites in the search results impacts where Google ranks the website in future searches.

While how users search the app stores is dramatically different than how they search the web (and what they expect in results), these concepts apply to mobile apps as well. Specifically, the signals conversion rates, retention (deleting the app after x days) and engagement (number and length of sessions) send to the app stores.

Improving retention and engagement will not only improve user LTV but your app store rankings as well.

There are several strategies outside the scope of this post, including notifications, gamification, social sharing and a great UI.

Step 4 – Use Your Data

Compared to web analytics, implementing and working with mobile analytics is a bit more challenging. For websites, add a code to your home page and the Google spider will index all of your pages and provide all sorts of data.

With mobile apps, every screen (or state) and button must contain an event in order to be tracked.

Once set up, the combination of app store provided data (Google Play and Apple Analytics), app store intelligence data (macro and micro app store data used for ASO and research), and app analytics (what’s happening in your app) can provide a plethora of actionable insights.

The data will tell the story, but you need to know what to look for, and what levers to pull to affect change.

Low conversions from app store views? A/B test your creative elements or test with a focus group. Reevaluate targeted keywords and phrases.

Great conversions but low visibility? Consider modifying targeted keywords and phrases for more focused coverage of those that are driving discover.

Encouraging app ratings and reviews, creating incentives to share your app and developing channels for user acquisition and engagement outside of the app can have an impact as well, but starting with the above 4 steps will provide the foundation to make incremental improvements that have a lasting effect.

Small, seemingly insignificant monthly improvements of only 5-7% each month result in a doubling after 12 months. That is – 5% better conversion, 5% better visibility, 5% better retention.

A focus on the above steps is more likely to result in monthly improvements of 20% or more, providing significant ROI and creating a long-term competitive position for your app.