Analytics are information. And information is power. Therefore, analytics are power.
Many companies preach they are data-oriented and use analytics to inform business decisions, new features and app optimizations, often times, this is nothing more than a vanity buzzword.
As we all know, on occasion, requests from internal stakeholders take priority regardless of their strategic value for the user experience.
Sometimes, features are built to only appease a few users. In business, like in life, sometimes those who speak the loudest get their way.
One of the challenges companies will continue to face in 2016 is creating a business environment in which features and functionalities are prioritized successfully in a way that clearly links feature development to a clear return on investment.
At Y Media Labs, we always stress the importance of rigorous analytics and help our clients set up a data gathering framework that can be leveraged over time to track and monitor the performance of the mobile applications we build. We recognize the importance of a thorough end-to-end analytics process which is critical to the overall mobile app strategy for any company out there.
Below is a list of 10 data points that every company executive should look at in order to measure the success of their mobile applications. These data points will give you a clear picture of where your app is, and path the way for enhancements needed to take your app to the next level.
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1. Retention Rates
Most companies track downloads as the primary metric for the success of their mobile application. However, 95 percent of users will stop using the app within 90 days of downloading it. As such, what you really want to measure is not only the download rates but also the churn rate: the ratio of people downloading the app versus those currently using it on a daily/weekly/monthly/yearly basis. This bird’s-eye view will the opportunity to measure the overall health of the application and whether users like it or not.
2. User Lifetime Value (LTV)
Many companies look at daily/weekly/monthly/yearly revenue as an indication of future success. Which is, by the way, a totally legitimate strategy for measuring success. But an equally important metric is a user’s lifetime value.
LTV is measured by looking at the monetization of a user (the amount of money spent by a user on the app until they no longer engage with it), the retention rate (the rate people return to the app after downloading it) and the virality of app (how often users share your app through social media or through referral programs).
LTV is critical to understanding your mobile app users’ engagement over time and is a great predictor of future app retention rates and your projected ROI.
3. In-App Referrals
More and more companies offer in-app referral programs. And that’s a great thing. If you do right by your current customers, they will talk about you and your services. And the power of direct referrals where I, as a customer, tell my friends about your great app is substantially more meaningful than anything a company can do through various marketing efforts. Why?
Because as a person are more likely to trust someone you know over an online marketing effort. Encouraging and tracking app referrals are key to understanding your app’s success. Do people really enjoy doing business with you? Do they trust you enough that they’re willing to tell their friends and family about it?
4. App Performance Analytics
It doesn’t matter how intuitive your app is if it doesn’t perform well. If an app takes more than 3 seconds to load, your users will become very impatient. Performance issues erode the confidence your users have in your brand and their loyalty towards you.
So much so that 88 percent of consumers are less likely to return a site after a bad experience. As such, you need to closely monitor app crashes, app latency, app load and network errors and constantly work on performance improvements. The easiest way to let your customers down is by having a slow and buggy mobile app.
5. App Ratings and Review Analytics
We live in a world where ratings and reviews represent one of the most important factors in making a purchase decision. Eighty-eight percent of users look at reviews before engaging any business. In addition, as we all know, your app store ranking is directly impacted by how your current users rate your app.
From an app store rating perspective, there are two different metrics you need to constantly look at the overall ratings/reviews and the reviews for the current version of your app. Hopefully, you see the rating going up with each new version as you make improvements to the app based on the previous feedback you received from your users.
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6. AOV per User vs AOV per Paying User
Tracking the Average Order Value will help you determine the best strategy to maximize revenue per paying customers and to encourage non-paying users to transact on your application. Typically, there are two different AOV numbers you want to track. First, you have the overall AOV you divide all the revenue you get by the number of customers using your app.
Second, you divide the overall AOV by the number of users actually transacting through your app. You want to measure both AOVs for a simple reason. Strategically, you want to come up with features and functionalities that appeal to both groups of people but to a different end. In other words, you want to find ways to monetize users who have never ordered through your app (or haven’t done so recently) but you also want to come up with strategies that will increase the value of your current paying customers (make them buy more).
7. User Sessions
The number of user sessions is a basic metric that most mobile analytics groups report on. The formula is very basic: a single session is an uninterrupted period of time spent by a user from the moment they open the app until they close it. This metric is important primarily because it measures user engagement. Ideally, you want as many user sessions as possible.
There’s another user session metric we often recommend to our clients: how many sessions does it take, from the moment a user launches the app for the first time until they convert? This metric can tell you if there are issues in the app flow, or if the content is not good enough on a mobile flow, for a user to quickly convert.
8. First Time User Drop Off Points (And Retargeting)
Even when marketing does a good job and the user ends up downloading the app, it’s only half the battle. The “onboarding” of a customer is what takes time, finesse and constant deploy-measure-iterate sessions to get it right. There are various reasons why a user may leave before converting during their first session: App abandonment can happen because you tried to force the user to login/register too soon; It could be that there were too many on-screen interruptions or too many steps to complete a task, or the performance of the app may have been too bad.
Understanding what’s making people leave your app will help you define ways to a) lower the drop-off rate in the future and retarget those who have previously abandoned your app.
9. In-App Feedback
At Y Media Labs, we always tell our clients to allow for in-app feedback. The reality is that loyal customers, especially those who are heavy users of your app, will give you feedback. Some companies go so far as to provide rewards to the users who engage with them through their mobile channel. Some may even give out free merchandise to customers who report valid production bugs via the “Report a Problem feature”.
The point is simple. In-app feedback allows you to measure the loyalty of your app (I wouldn’t tell you about an issue unless I care about your app) but also to catch production issues that somehow were not caught during the testing phase.
10. Event and Funnel Tracking
Last but not least, every company should measure app events and funnel performance. An event is an interaction that a user has with content/functionality on a page. Event tracking is the best way to ensure a very specific task within your mobile app works as expected. An event refers to a specific interaction with a piece of functionality on the app.
A funnel refers to a set of interactions the user engages in, in sequential order, until a task is completed. By looking at how people react within a funnel and their exit rates, you can find ways to improve the funnel performance (and hopefully decrease those rates).
Mobile app analytics are key to the overall success of your company. Understanding and acting on what works and what doesn’t work with your app will result in higher user engagement and retention rates. In the field of software development, everyone goes 100 miles per hour.
I strongly suggest implementing the 10 in-app analytics key performance indicators listed above. By using them, you can make sure that you’re not racing 100 miles per hour on the bridge to nowhere.