December 3, 2018
Four Ways to Boost Marketplace Transaction Volumes During the Holiday Season and Beyond
The overarching goal of any mobile messaging strategy is to drive consumers to make your brand an integral part of their everyday lives. As the most personal, intimate, and proximate device, mobile gives your business that opportunity. Only when consumers have made the decision to include your app in their day and rely on it regularly can you reach your business goals. Any evaluation of your mobile messaging success hinges on this key endeavor. To evaluate success, analyze whether your customers are becoming more invested in, reliant on, and enthusiastic about your app and the value that you provide.
Your mobile messaging strategy is a program of messages. No matter what level of engagement a user has shown or what actions and behaviors they’ve exhibited in the past, you are ready with relevant and contextual messages that encourage action and investment in your app. Together, these messages guide users to become more engaged with your app and more valuable customers in the long run.
To evaluate the success of your overall strategy, take an aggregate look at whether users who have received your mobile messages have higher retention rates, engagement rates, conversion rates, and lifetime values than those in a control group who did not receive the messages.
Retention Rate: An app’s retention rate is generally determined by the percentage of users who come back to the app after the initial open within a specific timeframe, usually 30, 60, and 90 days. As user acquisition costs increase, retention is key because it measures whether users are actually staying with your app. Retention at 30 days is different than at 90 days because the latter will reflect far more loyalty in users.
Engagement Rate: The engagement rate is generally determined by the percentage of users who visit your app within a day. It’s a measure of the percentage of users that are active in your app within a certain timeframe. Some apps, of course, will have higher overall engagement numbers simply because of the nature of the service that it provides (e.g. a social media app will see more daily engagement than a travel app meant to be used for booking trips). Often, engagement may also be measured by time spent in app and average number of visits per user.
Conversion Rate: The conversion rate measures the percentage of app users who complete a purchase or a key valuable action such as reading an article or sharing on social. What is regarded as a good conversion rate depends on the industry standard and the value of each conversion.
Lifetime Value (LTV): The LTV is a measure of the user’s total projected value over the course of his lifetime. The key question that LTV answers is “How much revenue will a customer generate over his lifetime and how many valuable users will he bring?” Different companies and industries will have different calculations for the lifetime value, but most of them will take into consideration the revenue generated from each user, key valuable actions that correlate with more value, as well as retention and amplification. For an e-commerce company, a simple LTV calculation might be the average order value * # orders * average retention time. For a media app, for example, it might be a different calculation that involves the number of minutes the user has spent in app, which correlates with the ad impressions he has seen.
These are the general metrics to examine when determining the success of your overall messaging strategy. In our next lesson, we’ll cover how to think about quantifying returns on investment in order to evaluate success. Stay tuned!