You developed your app, bravo! What really matters is how people will interact with it. Will they love it, hate it, use it, rate it? These are really important questions that will determine the success of your mobile app and guide you in building better iterations. The best way to answer these questions is by measuring and analyzing certain metrics to help formulate your strategy.
NEED JUST THE BASICS? CHECK OUT THE THREE ESSENTIAL MOBILE APP ANALYTICS NEWBIE DEVELOPERS SHOULD TRACK.
Here is a comprehensive list of mobile app metrics that actually count and tools you can use to measure performance:
1. Number of Installs
The number of installs in the first 48-72 hours of launch have a great impact on your mobile app’s life and rank in the longer run. It’s crucial to measure how many installs your app receives and from where so you know what to target. The number of installs you should achieve depends on the type of app and the app store you launched it on. But you can always figure out the best install rate for your app by analyzing your competition as well as calculating based on your monetary goals.
As you dig deeper into this data, you might realize that you’re getting all your installs from organic searches or from a specific location because of word of mouth, for example. In this case, these insights could help you formulate targeted campaigns or encourage you to use the same approach elsewhere.
App install ads are also very crucial. New data from BI Intelligence revealed that U.S. mobile app-install ad revenue will top $4.6 billion this year and grow to $6.8 billion by the end of 2019, increasing by a compound annual growth rate of 14% from 2014. Mobile app install ads accounted for about 30% of mobile ad revenue last year, according to Business Insider.
Thus, capitalize on mobile installs ads to grow your reach. Google offers app installs ads that allow you to specifically target users on their display networks, search networks, and YouTube by bidding on certain keywords.
2. User Acquisition
Acquisition refers to how many people installed and downloaded your app within a certain time frame. These users can come from a variety of sources, including organic search, in-app referrals, and paid campaigns. To calculate the cost of acquiring a customer (CAC), take the monetary value of your sales and marketing efforts over a given period of time and divide it by the number of users that you acquired in that period.
Tools like Kissmetrics provide you with reports to track the amount of money you’ve spent to get new users and information about how they are currently using your app. Just like any investment made, you need to calculate the return to contextualize the number of downloads made per campaign and also understand how these downloads converted into valuable long time users, explained below.
3. Life Time Value (LTV)
This metric is one of the most important to determine how much one of your app’s users is worth in their lifetime. It can also indicate the financial value of your app depending on how you calculate it. If your app is free, you can track metrics like number of views or shares as a substitute for revenue.
To calculate the customer life time value, Entrepreneur recommends:
(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer).
An easy example would be the lifetime value of a gym member who spends $20 every month for three years. The value of that customer would be:
$20 X 12 months X 3 years = $720 in total revenue (or $240 per year).
There are also online calculators that can help calculate the LTV of your app’s users.
4. Active Users
You want to know who uses your app, how they behave, and what their interests are. Tracking your active users will not only allow you to segment them based on specific trends, but you will be able to figure out who dropped from your conversion funnel, enhance engagement, and acquire leads that haven’t joined yet.
To calculate the number of monthly active users (MAU) you need to ensure your app’s success, you must have a pricing strategy. Here’s an example from Armando Pantoja, a web and mobile developer, of how to calculate MAU using the freemium (free app plus advertising) model:
“If you have 1000 users and you get a 2-3% conversation and your pricing is $19.99, you will be making roughly $600 per month, which would not be enough to cover hosting, data fees and support. Even at 25,000 highly engaged users you would struggle. The burden to get new users is high in this model and requires a substantial advertising budget.”
By tracking your users and soliciting their feedback, you can figure out which features need to be implemented in subsequent version, details of a specific marketing campaign, and the best ways to monetize your app. For instance, you might discover that many of your users care highly about customized services, a feature you decide to include in your app’s later iterations in a premium plan. You could then target free users to upsell the app’s new functions.
5. Recurring Revenue
A huge part of your app’s survival depends on how much money comes from your users. There are several ways to calculate revenue:
ARR (Annual Recurring Revenue) is the value of a yearly billing period averaged into a monthly amount. So if you acquire one user who subscribes to a $1,000 annual plan, you’d just divide by 12, adding $83.30 to your Monthly Recurring Revenue. You should remove one-time non recurring fees and analyze your ARR to help figure out how to up-sell or cross-sell to your users.
MRR (Monthly Recurring Revenue) is the metric by which you calculate the total monthly revenue incurred from your customers. According to Baremetrics: “Say you have Customer A paying $100/mo and Customer B paying $50/mo. Your MRR would be $150. An easier way to calculate it is to multiply the total number of paying customers by the average amount all of those customers are paying you each month (know as ARPU- Average revenue per user). So five customers paying you an average of $100/mo would mean an MRR of $500.”
You’ll find some people dropping their plans and some upgrading, and that’s when you should focus your efforts on determining which parts of your sales funnel fail and identify the areas with most potential to enhance your revenue.
6. App Retention
Retention is measured as the percentage of users who return to your app based on the date of their first visit. Also referred to as cohorts, retention tracking highlights your most engaged – and valuable – users, creating better targeting capabilities and allowing you to track in-app purchasing by level of engagement. Splitting retention rate based on device, segment, campaign, or by custom dimensions like purchase frequency allows you to experiment with marketing or personalization to test engagement and improve your app.
Here’s a simple formula to calculate your app’s retention rate, according to Inc.:
Retention Rate = ((CE-CN)/CS)) X 100
CE = number of customers at end of period
CN = number of new customers acquired during period
CS = number of customers at start of period
Whether the percentage you get from this formula is “good enough” depends on your own analysis of the app landscape, depending for instance on competitor values and industry averages. Obviously you should aim to have the highest retention rate to ensure the growth of the app.
Analyzing retention allows you to determine what’s working and what isn’t in your app over time as updates occur. If you release a new app version, one of the first things you should identify is whether or not your retention has changed. Building long-term retention is key to funneling primed users to conversions and purchases, as building a highly-engaged user base is the best way to boost LTV and app revenue.
7. App Store Ratings
The public metric of all metrics. You get to see exactly what people think of your app, and so can everyone else. The app stores are the best place to showcase your glowing user reviews . However, if you have poor ratings, you won’t stand a chance of going anywhere but down in the app store rankings. If you want to achieve Top 10 status, your users must absolutely love your app.
Check out The Secret Weapon to 80% Less Negative Reviews to learn more about how to drive five-star ratings of your app. Collect user feedback during the best testing phase to discover what needs fixing and how to optimize the UI and UX. Post-launch, use in-app support like Instabug to talk directly to your users and gather valuable feedback to refine your app.
8. Session Length
Session length is how long the user spends inside your app before becoming inactive or closing it — the time span dedicated to each session. This could potentially help you capture more revenue by allowing you to determine the ideal time to incentivize your users for a certain call to action (CTA). For instance, if the average time spent active on your app is 10 minutes and an ad appears after 15 minutes, then you need to iterate and place your CTA at the point of peak active users.
9. Session Interval
The session interval is how long it takes between the user’s first session and the following one. This indicates how often your users open and use your app and tells you if your app is used regularly or just downloaded and long forgotten. From these insights, you can then explore what it would take to boost user engagement. Maybe your app needs a user experience overhaul, or maybe you need to implement contextual in-app feedback to interact with and better understand your users and their needs.
10. Geo Metrics
Location data is key. Here at Instabug, we monitor the cities and countries where our users come from to better contextual their behavior. This data can help you determine where your most active users are and which locations have potential for location-based campaigns.
11. Devices and OS
Tracking this data allows you to figure out how and where the majority of your users consume your app. Are they using smart phones or tablets? What operating systems are they using? This information could help refine your app when it comes to things like UI and user support.
12. App Crashes
App crashes are inevitable, but they can do a lot of damage if they are recurring. The average crash rate is 1-2%, but this figure varies with things like usage frequency and app versions. You need to know what makes your app crash and how you can support your users when this happens. Otherwise, expect mass uninstalls.
What’s most useful about these metrics is that you get a clearer picture of who uses your app. The hands-on knowledge of how long and how frequently people use your app allows you to differentiate between regular, average, and non-users and formulate strategies to tackle each segment accordingly. The above metrics are also key when it comes to acquiring and retaining users as they allow you to understand how to leverage your business model, convert users, and quantify your progress.
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