What are the key metrics for mobile performance?
“We have one million downloads.”
“We were featured in the App Store!”
“Our average session length is over one minute.”
“Our average session length is over one minute.”
Launching and growing a mobile application is one of the
most exciting, stressful, and all-consuming experiences a company can
experience. For some, mobile is an extension of a company to a new platform –
like a bricks-and-mortar retailer expanding to web, and apps. For others, it is
the sole channel of interaction. Either way, expectations for mobile performance
are high. But how high? And how can you tell if you are successful or not?
For business-to-consumer (B2C) apps – including shopping,
gaming, and social media – just a handful of key performance indicators (KPIs)
can provide an actionable status report on the overall health of the business
and implications for the product itself.
Not just downloads – but active users. –
e.g., opening the app daily, weekly, or monthly – not just who just have it
downloaded on their phone or tablet.
Not just dollars per session – but ARPU. There
are “fish” and there are “whales” – what matters is “average revenue per user”
- looking at the amount of revenue divided by the number of active users, to
get at a normalized look at how revenue scales with the user base.
Not just number of sessions – but retention. Perhaps
one of the most important and most overlooked metrics is retention. Great that
people have downloaded your app – and opened it – but how many of them come
back the next day, week or month? This has massive implications for how long
the monetizable lifetime of a user is. Having a sense of retention is critical
to forecasting.
Not just revenue - but LTV. “Lifetime value”
assesses how much revenue each user drives over the course of their lifetime in
the app. This is the best proxy to scale up revenue as the user base increases.
Not just marketing spend – but CPA / CAC. “Cost
per acquisition” or “Customer acquisition cost” is more meaningful than an
overall absolute dollar amount, as it tells for every dollar spent to acquire
new users, how many new users were driven to the app.
The comparison of LTV to CAC highlights the profitability of
the app. These metrics will not always be perfect – but they are the ones that
startups need to understand, explain, and act upon.
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