Measuring the ROI of Your Mobile Apps

MobileApp3 Marketing Blog ROI

Several months back we wrote about the skyrocketing cost of acquiring loyal mobile app users (CPLU). As of June 2015, it costs an estimated $3.21 to acquire a loyal app user – a user who opens the app at least three times. That figure is 44 percent higher than it was at the same time in 2014. The rapid increase in this cost underscores just how difficult and how important it is to carefully track ROI in relation to mobile marketing. Below are four more metrics you should focus on:

Average Revenue Per User (APRU)

This metric is fairly self-explanatory. In essence, it measures how much money each one of your app users pays to your company over the lifetime of the app. In some cases this figure is quite high and in other cases quite low, making it hard to say for certain what benchmark represents a positive APRU. On average, however, most apps generate about $.04 per user per month or $.48 per year. Measure your own APRU, then compare the figure to your CPLU to determine if your apps are making any money.

User Engagement

Engagement and CPLU are closely related. Engagement is not a single formula or figure but rather the costs that you incur in order to encourage users to use an app for longer and more frequently. As a result, engagement applies differently to just about every app. Engagement can be measured by looking at factors like the amount of time a user spends with an app open, the level of conversion rates, and the number of opt-ins/opt-outs. Research suggests that the average app engages about 39 percent of users as measured by users who open the app 11+ times within a month. If you’re above that figure you’re doing something right.

Love Ratio

Love ratio identifies how many of your users are true app evangelists. It’s measured by first delivering users a simple one-question survey. They are asked “Do you love this app?” and have the option to answer “yes” or “no” or to dismiss the prompt. Ideally, a majority of your users will respond yes. This metric is helpful because it reveals important information about your user experience and serves as a helpful counterpart to your app store rating. Relatively few users rate you in the app store, and most have extreme opinions. The love ratio, by contrast, polls a much larger swath of your user base.

User Retention

Like engagement, the way you measure user retention will be different for every app. Start by setting benchmarks for retention. Have you succeeded if a user opens your app once a month, or does it need to be weekly usage to be valid? Then, think of retention in terms of CPLU. With the cost of acquiring a customer rising so quickly, would it make more sense to focus on retaining the users you have rather than courting new ones? This metric helps you decide.

Do you currently have the necessary marketing staff in place to track and analyze these metrics? If not, find the data-driven marketing professionals you require by partnering with Artemis Consultants.

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