When we think of success, we often tend to equate this with a certain dollar amount that, once earned, means we’ve “made it” but there’s a bit more in how to measure app success than just the revenue it’s generated. Though earnings from software are one way to measure the success of a digital business, it’s better to think in terms of specific objectives: how is your app meeting individual goals?
Getting the absolute most out of your app relies on several components working together. In a sense, they’re all related but each metric is like a fragment of the whole story. By understanding each value, you’ll be in a better position to make adjustments that will continually grow your app.
Why is it necessary to observe success from different angles?
Because there are so many different apps on the market with different models at different points in their lifecycle, what makes one app successful doesn’t always transpose for another. Not all apps earn income directly from transactions and even for those that do, every sale or conversion has a different value when stacked against a similar product.
For example, Netflix’s success (and other streaming platforms) is largely a function of how many paying users it has. They have to continually offer appealing content to keep paying users on board for the long term while keeping costs for the technological end as manageable as possible. On the other hand, something like a healthcare app demonstrates its value by engaging with as many patients as possible to reduce the amount of labor (and thus, costs) that would be otherwise required to accomplish tasks the product tackles.
Simply put, because every app is different, some metrics will be more important than others depending on the nature of the solution.
6 useful tips to measure app success
We’re assuming you have a solid app analytics system in place to understand user behavior. Though some metrics will matter more than others based on the kind of app, there’s one metric that matters to every app. So let’s start there!
1. Retention: measuring the number of downloads versus active users
The one metric all apps need to thrive is for users to keep, well, using! The one problem that kills the majority of apps that enter the market is abandonment. Whatever your app does, it needs to demonstrate enough value that it gets users to engage from time to time.
It’s especially important after launching your MVP to keep users engaged enough that they at least keep the app around. For apps that you’re monetizing, you might not convert many users out the door but as you scale and add features, increased spending should follow. In other cases, if you offer an app to supplement your business (such as in the healthcare example from earlier) you need as many customers to use it as possible.
Apps available to the general public can be assessed by how many people are observed using the app compared to the total number of downloads. Not to mention, any analytics package you find will have some form of retention tracking out of the box. If your app is supplementing your business, your number of downloads should strive to match your customer base, minding outlier and accidental installs. You’ll never see a hundred percent as some just won’t like your app and the fact some customers will account for several downloads – industry benchmarks vary so it’s best to base your understanding around how your app performs in the real world. Above all, your goal is to maintain or improve the number of active users.
2. Understanding trends in customer spending
How much money is each customer contributing? Or, by using your app, how much money is your business saving?
Your earnings (or reduction in expenditures) should be examined on both an individual basis and app-wide.
- What’s your most purchased offering and what is the highest earner?
- What do big spenders have in common?
- Does your average customer value rise or fall when you gain users?
The idea is that not every user will provide a direct benefit in the form of a transaction but instead provide currency in the form of “hype” which is crucial in an app’s early days. This can change substantially throughout the lifecycle of an app so this should routinely be evaluated against earning potential after each major release.
Often, an app has a maximum earning potential that presents itself after each new release – marketing for new features should lead to increased spending from both the existing user base and a portion of new users you manage to attract. Eventually, it somewhat levels off and may steadily drop over time, especially for subscription-based apps. Keep this in mind to best measure app success when offering a similar pricing structure.
A good example of this is Spotify which (ignoring the family and Hulu packages) can essentially max out at $10 a month per user. Best case scenario, every new user becomes a paying member so the ratio of spending per customer remains consistent unless you have a substantial number of existing users either upgrading to premium service or downgrading to the freemium version.
Customer spending over time factors into a couple of other important metrics like LTV (Lifetime Customer Value) and CAC (Customer Acquisition Cost.) Throughout your app’s lifecycle, the LTV [Average Revenue Per User (ARPU) / Revenue] acts as an absolute in revealing how much the average customer spends after subtracting the CAC (total marketing and sales costs / number of customers gained.) Each of these figures tends to jump with every big change so you’ll want to look for steady increases for these values once the dust settles.
From here, your focus should be on investing in high-LTV customer’s needs, even if it’s at the expense of those on the lower end of the spectrum.
3. General sentiment in feedback
To get a general idea of how your users feel about your app, sentiment analysis sheds light on the community’s general consensus. Positive feedback is extremely helpful in helping with morale and it’s useful in understanding how certain changes might be received by the user community. Take care to understand what users love: when you go to modify such things – even for the better! – there can be (and usually is) some backlash, at least at first.
When a new release changes a beloved feature in some way, take special care to highlight changes and walk users through anything from a layout change to a functionality enhancement.
Understanding negative feedback is a good way to quickly identify and resolve common user pain points. Certain matters can’t be helped such as when users complain about an immediate need for a feature in development but in other scenarios, users can voice frustrations like having to hunt for certain information or features. Resolving these matters as quickly as possible through a good prioritization process diminishes annoyances and helps keep attitudes towards your product amiable.
4. Watch and interpret your MAU (Monthly Active Users)
One thing about retention is that it can shift for various reasons so you’ll need to find other ways to look at the data and measure app success. By observing behavior on a month-to-month basis and measuring your MAU, you can form a better understanding of your overall business health.
While some businesses aren’t affected by the seasons, this can be a substantial factor for certain models. For example, an eCommerce app will likely see more activity around the holidays during the end of the calendar year. Healthcare apps are often the same as some patients have a certain amount of flex spending through insurance or another provider that needs to be used in a certain timeframe.
Growing an app isn’t a linear process so it’s best to also look at and analyze performance for each month for more insight into the big picture. Also, make sure to assess all the metadata you can like the demographic and location. The specifics here can reveal whether you’re hitting your target demographic or just randomly being picked by people on the other side of the world.
5. Use promo codes and measure the results
One neat trick you can use to reveal a unique metric is to offer a promo code targeted at a specific customer niche or through a certain marketing channel and then measure how many people use it. This allows you to stir up action from active users, lurkers, and potential users alike to measure “who’s paying attention.” Any time you offer a deal, capture as much data about its potential reach, who uses it, and for what can give you a kind of indicator of what to expect whenever you “make noise” as well as how to best tailor future promotions for optimal impact.
6. Track mentions on social media and throughout the web
Whenever your name surfaces in a conversation on the web, it’s helpful to know to see how it’s used. There are few different ways you can do this, such as with Google Keyword Planner from Google Ads, which is free to use. By using this tool to search for your business name, products, services, or some related derivate from any of the above, you can see both a range for the volume of searches as well as other related, long-tail keywords. In the case of the latter, these will often be low-competition phrases that are ideal for website content.
Also, make sure to keep track of wherever you’re mentioned on social media from direct mentions to any relevant hashtags. Aside from participating in conversations, you can draw certain inferences and connect dots you might not otherwise see. You will likely find a sizable chunk of your users share other interests which could be an opportunity for cross-marketing endeavors. So long as you’re being discussed in a positive light, each mention should be tallied as part of an effort to comprehensively measure app success.
We’ll help you interpret your performance so you can make the most of every step
Through big-picture analysis of the market and focused testing, our solutions-oriented teams of designers and engineers develop prototypes that fit the mosaic of digital marketplaces. Many times, an app needs to be analyzed from several different angles to get the big picture into frame. Not only will we build your app, but we’ll also help you utilize tools that help you understand everything about how your app is performing to make the best possible decisions for your future. Here at Blue Label Labs, we are are experts at collecting and analyzing data to form successful strategies for lifelong growth.
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