In this blog, we'll cover the most important KPIs that app marketers need to track to measure app performance.
Your mobile app, like any other marketing campaign, must be constantly monitored to ensure that it is consistently serving your brand. How can you tell if a campaign is successful if objective key performance indicators (KPIs) are not tracked? You may believe that you have a well-designed mobile app. However, without data to back it up, you can only rely on intuition.
To ensure that your marketing campaigns are having the desired effect, you must track a variety of metrics, including acquisitions, activations, engagements, uninstalls, reachability, and so on. Beyond the main content, consider these other mobile-specific KPIs that can help your mobile app succeed even faster.
User retention measures how many users return to your app after the initial download. This KPI includes metrics such as retention rate, churn rate, and lifetime value (LTV). Retention is crucial because it costs more to acquire new users than to retain existing ones.
Use this simple formula to calculate your retention rate: (users who log in at least once per day) / (total installations in a given time frame).
By tracking user retention, you can identify areas of your app that may be causing users to churn and make improvements to retain more users. For example, if users churn after a certain point in the onboarding process, you may need to simplify the process or provide more guidance to new users.
Churn refers to users who stop using your mobile app. Certain users completely uninstall the app, while others simply do not log in. Regardless, this rate is an important indicator of app success - as well as any changes that may be required.
Churn rate is also directly related to your company's bottom line. The higher your acquisition costs, the higher your churn rate. In-app event tracking can assist in determining when churn begins, providing valuable insights into your user roadmap.
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Every customer is valuable, but how do you determine how valuable they are? Customer lifetime value tells you how much each customer contributes to your bottom line over the course of their mobile app usage, including in-app purchases, in-app advertising, and subscriptions.
CLV can assist you in determining whether you are spending too much (or too little) on advertising. For example, perhaps the cost of recruiting each user is simply not offset by app services and purchases. It can also help you better segment and personalize your marketing approaches in order to increase ROI by catering to customers with higher CLV.
CLV (or CLTV) can be calculated using the following formula: (average purchase size) x (number of purchases) x (transaction period). Alternatively, you can use our online CLTV.
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Active users are those who use your app regularly. This KPI includes metrics such as daily, weekly, or monthly active users (DAU, WAU, MAU). Active users are essential because they are more likely to convert to paying users and drive revenue for your app.
Define your own Daily Active User (DAU) or Monthly Active User (MAU) metrics, as they will differ from one business to the next. Once you've decided how your organization classifies these different types of active users, you can experiment with different data ranges and frequencies.
Overall, DAU and MAU can help you forecast your profitability and business. If you have an increasing number of active, loyal users who interact and log in at multiple touchpoints throughout the day, it means your company is on the right track.
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We believe, however, that MAU is an overrated metric that is not a reliable indicator of growth or success. Better alternatives include CLTV (discussed further below), monthly retention rates, and key conversion rates.
Engagement measures how much time users spend in the app, how often they use it, and how deeply they interact with it. It includes metrics such as session length, frequency, and depth of engagement.
To improve engagement, app marketers need to focus on providing personalized content and recommendations, improving app performance and speed, and providing incentives for users to engage with the app.
You want to know how frequently users sign in, but you also want to know how long they stay in each visit. Use the following formula to calculate average session length: (user total session length) / (number of launches in session).
Many marketers will go a step further, segmenting based on demographic data such as device type, among other user factors.
A short session length could indicate a problem, as well as a high drop rate. If you have a high number of users logging in but they don't stay long enough to be useful to your business, this may indicate a problem with the user experience. Use these insights to improve app products and services in the future, resulting in higher ROI.
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Revenue measures the amount of money generated by the app. It includes metrics such as average revenue per user (ARPU), conversion rate, and total revenue.
To improve revenue, app marketers need to focus on creating a monetization strategy that aligns with the app's value proposition, optimizing the in-app purchase flow, and leveraging targeted advertising and sponsorships.
Tracking the average revenue generated per user in your mobile app can help you make better marketing and pricing decisions. To calculate ARPU, divide total revenue over a specific time period by the number of active users during that time period.
Tracking your mobile app conversion rate is just as important as tracking your website conversion rate. How else will you know the precise advantage of this option? It is entirely up to you how you track conversion—some may prefer to track installations, while others may prefer purchases, for example. But the point is to thoroughly understand how customers use and interact with your mobile app.
Overall, your company's conversion rate will be determined by your business model's individual conversion goals—there is no "perfect" number. However, this metric can provide important UX insights as well as pinpoint conversion points in the sales life cycle. Monitor conversion rates to gain access to more touchpoints along the customer journey.
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To achieve your desired sales goals, you must first know where to begin. Mobile apps allow you to reach a completely new audience, but you must evaluate the data you collect in the same way that you would with any other channel. Tracking the key performance indicators (KPIs) listed here will provide you with a comprehensive and granular understanding of the role your mobile app plays in your overall strategy.
However, assembling relevant behavioral analytics for application optimization takes time and frequently necessitates the use of multiple systems - resources that many start-up application developers lack. This is where ASO World enters the picture. ASO World has an analytics solution that can boost your business and personalized services that effectively drive app growth, including customizable metric tracking, A/B testing, comprehensive reporting, and more.
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