8 Tips To Drive In-App Purchases

By: Kahuna | May 16, 2016 | Mobile Marketing

There were 226 billion apps downloaded in 2015. Billion. With a B. For brands across that world, that translates into a significant opportunity to spend more time with their customers and, in turn, capture a greater share of their wallet.

But the value of an app download isn’t immediately realized. Only 8% of apps downloaded are paid, which means companies are relying on alternative means of monetization. For many brands, especially eCommerce and retail companies, in-app purchases are the primary revenue driver. While mobile-influenced sales are a very real opportunity for companies with both an online and offline presence, it requires complex multi-touchpoint attribution model to accurately (and convincingly) show your mobile app’s value in that way.

Gamestop, for example, sees that engaged users of its mobile app are actually 2x more valuable than customers in the highest tier of its loyalty program. But, not all customers who download your app will get to this point. With average retention rates that hover at about 20% after 30 days, marketers are looking to increase the number of engaged users and drive more in-app purchases.

There’s no magic bullet to make this happen, but there are a few steps every company can take to help drive a greater number of new app downloaders to become in-app purchasers.

1. Understand your customers.

Customers are channel agnostic, and will often use multiple channels over the course of their purchase journey. To effectively serve your customers, you need to know them. That requires collecting the right data, and being able to stitch that data into a unified view of the customer across digital touchpoints. Understanding your customer’s cross-channel behavior will give you better insight into the typical paths to purchase your customers take. That’s extremely valuable because it can be used to design messaging that supports each step in a customer’s journey. It can also be used to determine when a customer doesn’t need a message.

If a customer is already doing everything you want them to do in the app, let them be. But, if a customer shows signs of churning, send them message to gently nudge them further along.

2. Automate the onboarding process & show value immediately.

We’ve written extensively about mobile app onboarding. From tips & tricks to case studies about how effective an automated onboarding process can be to long term retention and revenue. The net-net here is to get users engaging with the features you know are more likely to keep them around and, in time, inspire purchases. If, for example, you know that customers who add payment information within the first two weeks are more likely to become repeat purchasers, incentivize users to do so with smart messaging.

3. Personalize each and every message.

Personalized messages are 5 to 8x more likely to be opened. And because customer attention is at a premium on mobile devices, every thing you can do to drive higher re-engagement rates will be worthwhile in the long run. Savvy marketers will not just use data at face value. They’ll use it to draw conclusions about a customer’s favorite brand, category, destination, and so on to make their messages even more compelling. Just because a customer bought a toilet seat last, doesn’t mean that’s their favorite product or one they’d want it highlighted in a push message.

Getting personalization right pays off. Data shows that customers pay more, buy more frequently, and are more likely to recommend a brand when the messaging they receive is personalized to them.

4. Match promotions with customer interests.

Promotions are a great way to drive sales. Free shipping, extra loyalty points, and discounts — what’s not to like! And all have proven to be an extremely effective way for companies to boost cart sizes and drive conversions. But, there are a lot of offers out there. Every day customers are being bombarded with “15% off this” or “$10 off that.” How do you get noticed? Delivering targeted promotions that align to customer interests helps you rise above the noise in the inbox or on the homescreen, drive excitement, and prompt action.

5. Time your communications right.

Even the best, most compelling message won’t have an impact if it’s delivered when a customer is unable to engage with it. In a recent report, Forrester reported that only 7% of consumers agree that promotions are well timed with their needs. Time optimization, or the ability to automatically deliver messages when a user is most likely to engage, will drive a 5x increase in engagement, which translates directly to more time spent in your app and more in-app purchase opportunities.

6. Create incentives that are “win-win”.

In-app sales will likely be the clearest indicator of success, but relentless promotions to accomplish this will erode profitability and train your customers to hold out until the next weekly coupon is delivered. Value-driven marketers will see beyond the initial purchase and incentivize customers with offers that sweeten the deal on both ends while deepening the overall customer relationship. For example, Overstock.com offers 10% off when users create and account, plus reward points on all future purchases. Customers get a great deal on their first purchase, and Overstock gets a new loyalty club member. It’s a win – win.

7. Be prepared for when customers get distracted.

We’ve all seen the stats. Up to 70% of shopping carts are abandoned on mobile devices. Naturally, this is a big opportunity for companies to capture more revenue from customers that show clear intent to buy. Consumers appreciate a gentle reminder when an item is left in their shopping cart. The real challenge is determining the right time to follow up. You want to be careful to not interrupt a customer’s natural flow, but also make sure you don’t wait too long and lose the sale altogether.

8. Keep it simple!

When customers finally reach the point where they’re ready to purchase, companies must remove any and all friction points that may prevent the purchase from happening. More than 50% report actually abandoning purchases on mobile devices because the checkout process is overly cumbersome. Even worse: 63% of those consumers say they would not shop with a company again if they had a very poor checkout experience. This problem, while also present on the web, is exaggerated on mobile devices because of the small screen size.

There are two main ways marketers can simplify their process to avoid this very costly problem. First, connect your channels. If a user has an account with you and they’re authenticated, there is no reason that their personal information shouldn’t be available during the checkout process. Second, and closely associated with the first point, take any steps you can to simplify your checkout process. The number of clicks required in the checkout process is often inversely related to the number of successfully completed checkouts.

While there’s no guaranteed way to get customers to start making in-app purchases, following these 8 tried and true best practices will give you the best possible shot.

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