What makes a healthy mobile app? How can your marketing efforts improve the health of your app before it’s too late? Industry standard tells us that we can measure an app’s success by the number of installs, but this metric has been leading marketers astray. Here at Kahuna, we believe in diving deeper and redefining success based on engagement and conversion.
True success of an app can be typified by the valuable and engaged users on your app – the people who are taking action that improves your real business outcomes. How does relying on number of app installs help you achieve this goal? Unless you have a paid app, not a single cent of revenue is generated after an app download. If the analysis stops here, we are left with a very blurry picture of an app’s success at the very beginning of the user journey.
What’s wrong with app installs?
Marketers should not focus on optimizing for app installs; this is just the beginning, and we must clearly understand what a healthy app looks like to achieve long-term success. This was a major theme of the MobileBeat conference last week, where nearly one thousand mobile enthusiasts flocked to learn best practices from industry leaders. Kahuna CEO Adam Marchick took to the stage with Brian Mead, Yahoo’s Director of Product Management, to share the best practices of their work together. Brian and Adam chose to focus their talk on mobile engagement, as mobile apps can only achieve success when their installs become engaged users.
At MobileBeat, many industry thought leaders highlighted the shift in focus from user acquisition to engagement. This was emphasized by Google’s Jason Spero when he spoke on the latent potential of mobile, highlighting the importance of using mobile to achieve downstream goals (such as purchasing, product engagement, and loyalty). Apps should be a core strategy of your business, mentioned Spero, built with a purpose and given the opportunity to provide real value to users, and engage them in the process. In order to encourage this, apps must understand mobile users as people, not devices, to create a truly valuable experience.
Airbnb’s mobile growth team leader, Gustaf Alstromer, also emphasized the role of mobile with respect to user engagement. Alstromer mentioned the importance of facilitating real-time communication and bookings through mobile, mentioning that for many of his users, using the Airbnb mobile app is a daily occurrence. What advice did he have for other mobile growth professionals? Make sure you pick the right goals – again reiterating that engagement and conversion, not installs, are the golden tickets. Mobile is the future, he said, and it deserves a serious investment.
With downloads counting for less and less, this leaves a dearth of best practices around measuring success. In order to promote app health, mobile marketers and product managers must understand what’s going on beneath the “app install surface” and become empowered to improve the metrics that really matter. At MobileBeat, Kahuna CEO Adam Marchick offered two ratios to fill the void. “The industry is crying out for best practices,” said Marchick. “The best way to assess the state of your mobile health is by using two ratios: engaged users to installs and engaged users to dormant users.” As Adam and Brian mentioned, users don’t just become engaged on mobile. To be successful, mobile marketers need to personalize and automate the mobile engagement journey.
“The Vitamin” – Engaged:Install Ratio
In order to understand the effectiveness of your new user onboarding, you must look at the ratio of engaged users to app installs. An engaged user is easily defined as someone who is regularly completing desirable actions within your app, such as making purchases, reading content, or interacting with friends.
Marchick cites onboarding as a significant hurdle, one that contributes to the chasm between installs and engaged users. “Spending on user acquisition without a user engagement strategy in place is like pouring money down the drain,” said Marchick. Engaged to install ratio is the best way to evaluate your new user onboarding success, and these are some of the best practices for designing your app’s onboarding experience. This ratio is an amazing measure of how effectively you communicate the value proposition of your application and convince users that your app is worth their time. When this ratio is high, you have reduced levels of user churn, and are thus not wasting user acquisition efforts and bleeding money on installs that won’t generate any real engagement or revenue.
“The Aspirin” – Engaged:Dormant Ratio
Once your users become engaged with your app, what happens? Do they stay hooked to your app, or does their interest wane? This can be easily measured by a ratio of engaged to dormant users. Dormant users were once top users of your app, but have since closed the app, drifted away, and forgotten your value. In order to understand how healthy your app is, you must know the engaged to dormant ratio. This metric indicates precisely what percentage of people were onboarded effectively but have since changed their mind.
This ratio gives you a very clear picture of how engaging your app is over time. Once a user is fully onboarded and joins the ranks of engaged users, how do they behave within the app long-term? Does your app continue to offer novel value to users, or does it lose its value after the user’s initial excitement? If this ratio is low, it’s time to treat the problem by focusing your marketing efforts on your dormant users. Promoting true app health means preventing your users from getting bored and dropping off, keeping them genuinely engaged over time.
Marketers Need to Practice Both Urgent & Preventative Care to Get their App in Top Shape
Holistic app health as defined by these important ratios can only be achieved with razor-sharp focus and continuous optimization. Mobile marketers need to be focused on the right goals in order to achieve success in the long term. These innovative ratios are a perfect snapshot of your app’s success, and are an invaluable part of a regular app health check-up that your mobile marketing team should be doing. Leaders in the mobile industry are challenging the importance of the “app installs” metric used in isolation; it’s time you do the same.