5 Key App Metrics You Should Track
All strategies are allowed when it comes to maximizing revenues from your commercial or business application and statistical analysis is one of the best approaches in this respect. After the app is launched, developers and business owners can take advantage of abundance of insightful metrics that can be collected using some of the current analytic tools. However, such a variety of options can be difficult to sift through and arrive at meaningful conclusions if the data is not observed in relation to primary purpose of the app, so extra attention should be paid to indicators that follow economic parameters. Here is a short list of metrics crucial for every business app, since they tell you exactly how well are you connecting with your target group and how much income you can expect from your application:
User Acquisition Cost
Often overlooked in the perpetual race for clicks is the price companies pay to gain each additional user, which is why user acquisition cost is a metric that can have such a profound effect on the entire marketing strategy. This issue is not specific for the mobile sphere, but in this case all the marketing expenses can be easily tracked and stored for later analysis without external help thanks to a number of great tracking tools available for this purpose. When you know how much each new contact costs you, you can plan accordingly and make sure your marketing budget is balanced with your expectations. For those willing to go an extra mile, there are numerous ways to keep user acquisition costs at a reasonable level without compromising visibility.
It is crucial to understand the big picture when trying to assess the effectiveness of your app in the market, so it makes sense to use customer lifetime value (LTV) as a key pointer to estimate your success/failure rate. Basically, this metric indicates total amount of money an average user will spend on that app, allowing for long-term perspective regarding sales and better understanding which apps resonate with the customers. While immediate sales are important in order to secure adequate cash flow from your app, LTV is a much better indicator of the expected return on investment that can provide you with tips relating to most profitable app types.
Retention rate is another relevant metric that most of the leading analysts include on the shortlist of must-track indicators, since it measures how many users will keep using the app after the novelty factor wears off. Longevity is a major goal for each app developer, which means achieving high retention rate after a 90-day period (average value is around 65%) should be a priority over any short-term gains. Apps that score well on this metric stand a solid chance to become mainstays in the market and return significant profits, but this may be easier said than done. Customers are faced with nearly unlimited choice and only the best designed apps can hope to win their long-term loyalty.
According to industry data, average user spends about one minute whenever he runs a mobile application, providing a benchmark you can compare your results with. Greater session length means your customers have more time to utilize advanced features or make in-app purchases, so this metric has a strong positive correlation with monetization of the app. That’s why it is a good practice to include elements that allow for intense customer interaction, making your app more user-friendly and facilitating relationship building with the customer base. When people are comfortable with an app, average session length tends to go up – as well as the total revenue the app brings home.
Average Revenue Per User
Keeping track of average revenue per user (ARPU) is the key to interpreting the monetization patterns for your app. It is important to understand whether the registered increase in revenue is exclusively the result of the growing number of users or the existing users are still contributing to revenue build-up through various purchases. This metric clearly distinguishes between two different sources of growth and provides the app owner with a sound base for financial projections for the future. Ideally, ARPU should remain steady or increase even while total number of users is on the rise – this is a sure sign that application has a robust revenue model.