It was predicted in 2008 by analysts from Kleiner Perkins that mobile will overtake fixed Internet access by 2014. As you can see from the chart below, that bold prediction has already come true.
Mobile now forms a vital part of every business’s strategy and everyone from marketers to developers wants to know how to serve their customers on mobile devices better.
“What’s not measured, can’t be improved.”
If you need to improve engagement with your customers, you need to monitor and analyze their app behavior. Mobile app analytics enables you to get insights on how to retain existing customers and acquire new ones. It has become an essential part of the app development process. However, out of 95% of the developers who add analytics to their app, only 5% of them know what to do with it. Also, the huge amount of numbers can feel overwhelming, so you need to have a plan to tame the multi-headed monster. This is reason enough, to show you six tips on how to master app analytics right.
Think Analytics before Your App Is Even Published
If you start thinking about app analytics, once your app is published in the app store, you are already too late. But what’s the need to hurry so much? This article from Andrew Chen, a mobile app analyst should help you decide.
An average app loses 77% of its Daily Active Users (DAUs) within the first three days after install.
The number goes up to 90% within the first 30 days. So, if you wait even one week before you set up your analytics, you won’t know why 80% of your users stopped using your app.
You should already analyze when you are testing your app in the Alpha and Beta phases. It will provide you with valuable feedback that will enable you to improve the first version for your app. A data-driven beta period will result in a better product at app launch, which is so critical for your app success keeping the above statistics in mind.
Bad Data Is Worse than No Data
Be careful about what you are measuring. Your future decision regarding new app features, ad spends for user acquisition and your app economics would be driven out of the analytics, that you measure. If base your decision on an incorrect metric, you are bound for failure.
For example, let’s say you measure user purchases by the number of clicks on the ‘Buy’ button. However, often it happens that a user might enter invalid card details or there might be a network error and the payment doesn’t go through. Instead, the correct event to measure would be the point of time, when the user has already paid and you send a receipt to the user.
“More Data Is Better” Doesn’t Hold True
Sometimes app entrepreneurs get too excited with app analytics and would want to measure everything. Not only that produces a huge amount data that can be overwhelming but also adds a lot of bloat to your app.
Remember your app size would adversely impact the number of downloads. Segment says your app downloads go down by 0.45% for every 1 MB increase in app size, provided your app size is within 3-99 MB bracket. In other words, if you increase your app size from 3 to 99 MB your app downloads would go down by 43%.
Also, measuring more events would increase your development time and cost which is always a scarce resource for app entrepreneurs. So, prepare in advance what you want to measure and target only those events. Draw your funnels on paper before you start the development work to add them to your app.
Which App Analytics Should You Focus On?
The metrics which you measure depend upon the type and functionality of your app. A gaming app might focus more on in-app purchases and time spent by the user. Whereas, an e-commerce app would be more concerned with the average purchase size and the point at which people abandon their shopping cart.
In general, for all mobile apps, there are three main categories of metrics to focus on.
The User acquisition metric is basically concerned with four main questions:
Who is your user?
Answer this question in as much detail as possible. For example, for the app Plantsnap, which identifies a plant from a user’s photo, the correct audience is, “A 35 to 55-year-old mom that likes to shop at a high-end store, who has a house fully paid for, a dog and her kids are teenagers.”” Actually, this should flow from your app idea validation stage and verified with the actual users boarded.
How do they find your app?
The answer can be - search in an app store, app’s external landing page, website, Facebook ads, Google AdWords, Twitter or tech publications like TechCrunch and Mashable. Tune has a great infographic on the same for an average app.
How many users download your app?
This is pretty straightforward. But note if a user downloads and then uninstalls your app it is still considered as a download. Combine it with current app installs to get a better view.
How much do you spend per user (also known as Cost of Customer Acquisition or CoCA)?
This determines the effectiveness of your app marketing campaign and will come in handy in the next stage – user monetization.
User monetization deals with one main question:
How much is a user worth to you?
This is often known as the Lifetime Value of the user or LTV.
For a paid app with no in-app purchases, this would be the price of the app. Whereas for a free app with in-app purchases this would be the sum of total in-app purchases over the user’s lifecycle.
A general rule of thumb that is used to check the profitability of your app is LTV > 3 times CoCA. If it’s not the case, it means you are burning too much cash to acquire users and you won’t be able to sustain it in the long run.
User Retention and Engagement
When measuring user retention and engagement, there are two main questions, you ask yourself:
How long do people use the app? (Engagement)
This metric varies with the type of app. A gaming app would want to increase the user time spent on the app, whereas a utility app would want to offer a quick solution that saves a user’s time. Decide what’s more important for you, depending on your app category.
How often do they come back? (Retention)
If there is just one metric you can focus upon, it should be this. Churning through a huge number of users isn’t a sustainable strategy for any app entrepreneur.
This is because it’s cheaper to sell to an existing customer than to get a new one. If you churn rapidly, the economics won’t be in your favor.
It was the focus on these two metrics that enabled Matt Hall and Andy Sum, the founders of Crossy Road, to get 50 million downloads in 90 days and earn $10 million in the process.
“Please innovate in your own free-to-play games. For a professional app, focus on retention, engagement and virality. Innovate the rest.” – Matt Hall
Learn from Your Competitors
A lot of action that you take based on your app analytics will be trial and error. That is, you would build some features and test to see what works and what doesn’t. In such a case, it’s straightforward to get bogged down with your own app analytics. However, you don’t have to do all the experiments with your own app. Often, it pays to check the analytics of your competitors and learn from their hits and misses.
For example, let’s say you have a paid app and you are trying to determine what price point would give you the maximum revenue. The best way to approach this would be to look at the top 5 paid apps in your niche and see how changes in price impacted their downloads. App Annie is one analytics provider which offers useful market data to help you take these calls.
Integrate with Data from Other Sources
App Analytics is just one of the sources of data for your mobile app. Apart from that, you would also generate data from your landing page, website and social media profiles. Combine all this data together to get a full picture preview of how your app or brand is performing.
Your landing page and website can provide useful information about which strategy is working for your customer acquisition. Facebook and Twitter are often the first places where users would complain about your app, which in turn can provide very useful feedback.
Data from social media can also offer you insights over what you are doing well for customer retention. For example, Zomato, a food order and delivery app, increased customer retention with excellent in-app support.
People are increasingly spending more time on mobile apps than ever before. In such an environment, it’s vital to use app analytics to measure every aspect of user behaviour to offer better service to customers.
Often, developers are trapped inside their own heads. What you think is important might be very different from how a customer uses your app. So, go ahead and use the 6 tips above to master app analytics, improve your user funnel and turn your app into a success story!