Acquiring users in a cost-efficient way is critical for
building a successful app business and apart from time, skills and
money you need to have a well-thought strategy in place that will enable you to
iterate fast and learn from your mistakes.
In a previous post, we have constructed the mobile user
acquisition funnel and by measuring the conversions at each step we are
now ready to experiment with different optimizations and identify the ones that
yield the best results.
Many users will be dropping-out at every step of your funnel
and although on the surface this behavior appears to be random, you should try
to understand its key drivers and take actions to minimize the drop-off.
To put things in perspective, think about a relatively
expensive item you’ve purchased in the last 3 months. Then ask yourself the
following questions:
- Did
you purchase that item because it was fulfilling one of your needs?
- Was
the shop you bought it from trustful?
Chances are that you responded positively to both questions.
The same questions are, unsurprisingly, being asked by every potential user
before deciding whether to download your free app or not and you should center
your initial optimization efforts around them.
Funnel – Top
Getting more and more people at the top of your mobile user
acquisition funnel is definitely a good thing, provided that your funnel is not
leaky and you get a significant proportion of regular users at the other end.
A good strategy would be to first soft-launch so
that you make sure you have healthy conversions at each step and then ramp up
your efforts with a proper launch, to increase the number of people that will
find out your app exists.
Currently, performance-based mobile marketing (paid
or free with cross-promotion) is considered by many the biggest contributor to
the growth of a mobile user base and can be complemented with growth hacks,
traditional marketing and app store SEO that will eventually provide an
incremental value. For paid non-incentivized app installs, a strategy to
minimize costs is to buy inventory from a variety of mobile ad networks (since
CPI prices can increase substantially when a mobile ad network saturates) and
avoid peak hours or special events where inflated CPI prices are observed.
Some users will find out about your app through organic ways
such as browsing categories in the app store, through lists of featured apps or
by actively searching for it. Localization can be quite powerful and you should
consider launching in different countries and app stores. At the same time a
significant volume of organic downloads can be generated by achieving a high
rank position (to get perspective, for the #1 iTunes App Store rank you
need from 400,000 to 1,000,000 daily installs plus positive reviews) or getting
featured, however, as the app stores dynamics and rankings change all the time
you should plan your launch strategy assuming neither will happen.
If you want to amplify all the above marketing efforts and
decrease substantially the acquisition cost, make sure you bake some growth
hacks in your app i.e. an invitation system where your happy users can
effortlessly invite some of their friends while getting an extra value in
return. The virality factor (also known as the k-factor) is important
because if, for example, you manage to get 1 out of 10 users to convince a
friend to try your app (k-factor = 0.1), this means that for every 1000 users
you acquire through whatever acquisition channel, another 100 users will be
acquired at no extra cost.
Finally, referrals coming from influential
bloggers, app review sites or even press releases will lower substantially the
trust barrier you have to overcome and depending on the size of their audience,
it could have a significant impact on growing your user base.
Funnel – Middle
If things go well from your efforts at the top of the
funnel, some potential users will have already visited your app store page.
Your primary goal now is to convince them that your app is
the best to fulfill their particular need and aim to quickly build trust.
At your disposal is every piece of information that can be
tweaked and you should experiment with different variations in order to
optimize conversions:
- Copy:
You need a catchy title that communicates clearly the need your app is
addressing. Think hard about the layout of your app description, the
actual words and how to nail the “above the fold” text. Ridiculously
good-looking screenshots are a strong indicator of credibility and can
build trust.
- Social
Proof: The volume and quality of your ratings and reviews, have an
important role when building trust. Make sure that you swiftly address
significant complaints and be prepared to fight the classic
“chicken-and-egg” situation at the very beginning.
- Price:
Different business models, will affect conversion rates differently
throughout the entire acquisition funnel. Know your strengths and the
weaknesses of the competition, and position your app business accordingly.
- Meta:
The actual size of your app, the frequency of updates, its maturity
content and the number of permissions it requires, will affect the
conversions albeit at a lessened extend.
Funnel – Bottom
The download has finished in a timely manner and if he
didn’t forget to open the app, you got yourself a new user.
Designing a flawless new user experience (NUX) is
critical in the “all-or-nothing” battle that takes place the first time a new
user opens your app. Deep-linking to a custom landing page within the
app, easy on-boarding and giving them a reason to come back again should
accompany your product design skills that are now being tested.
He decides to close the app and if he opens it again a few
times more, give yourself a pat on the back – you got a regular user!
Optimization
It’s important to develop a process of constant
experimentation, as some optimizations might work better than others over time
and as your user base grows.
A useful tool for optimization is the concept of user
lifetime value (LTV), where you estimate the maximum revenue you will ever
get from an average user, and this is then used as the maximum threshold on how
much you are willing to spend for acquiring a user.
Once your funnel conversions are healthy, you should aim to
identify a handful traffic sources that bring high-LTV users at a low
acquisition cost, and double-down your resources on them.
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