In 2020, according to rough figures, there were more than 5 million mobile applications, and downloads were in the billions. Mostly people installed mobile games, video conferencing services and instant messengers. Of course, Covid-19 and quarantine measures played an important role in this choice. The transition to the format of remote work, forced vacations, adaptation to new realities – and now, people are actively downloading games, communicating in messengers, meeting in Zoom, ordering the delivery of food and all the necessary things in this difficult time.

Many companies have had to adapt and incorporate application development into their business strategy in order not to lose customers. The trend continues in 2021. What indicators do you need to pay attention to in order to understand whether a mobile application is effective or not?

How to measure the effectiveness of a mobile application – basic metrics and indicators

Number of downloads

This metric can be safely called the most popular. Marketers often track it and try to work towards increasing the number of installs. They do this not only to show off impressive numbers in case studies.

The number of downloads directly affects the ranking of an application in Google Apps and App Store – the higher it is in the search, the more likely it is that the target audience will notice it and decide to use it. At the same time, a large number of downloads shows that marketers have done a good job on marketing strategy, promotion and ASO, but sometimes speaks very little as an indicator of the effectiveness of a mobile application. This is because trends and people’s interests are fluid. So it’s great to remember that more is not always better, and high demand today does not guarantee stable growth tomorrow.

The download metric can be useful if you are launching a product for a loyal audience or want to increase it. For example, an app can make table reservations easier, and a loyalty program can bring in even more customers. Although there is always a chance that half of the audience will still come without prior reservation, simply because they are conservative and happy with the way things are working now.

It’s also a good idea to keep track of your downloads if you want to develop the world’s best product and then sell it profitably.

How to calculate: determine the number of potential users of the application, and then find the percentage of that number. This percentage will represent potential installations.

If you are using paid promotion channels, it is a good idea to calculate the average installation cost to estimate the costs of those channels.

To do this, divide the cost of promotion by the amount of users who have installed the application. Remember to compare the number of downloads to the number of deletions. If the application is often downloaded, but immediately removed, it is a reason to think if you are wasting your budget on advertising in certain channels.

How to increase:

• Think over your marketing strategy: publish news on social networks, post articles on specialized blogs and press releases on news platforms.
• Use an informative icon that looks good on different devices.
• Verify that screenshots of the application’s key screens provide basic information about its functions and tasks.
• Make sure the description is complete and has enough keywords.
• Post a quality video – many people decide to use a product after watching the video.
• Give the opportunity to use the application for free. This can be either a trial period or a cut-down functionality on a free plan.
• Share custom content. Positive feedback on your development is the best advertisement.

Retention rate

This metric shows the percentage of users who visited the application again after downloading. Literally, it is an indicator of how high-quality your traffic is and whether people have formed a habit of frequently using your product.

Considering that every fifth person after downloading the application opens it only once, it is better not to forget to work on increasing Retention.

If your product involves frequent use, this metric is indispensable. For example, you have developed a fitness app, and it is important for you that people run it every day and exercise according to the chosen schedule. If they don’t do this, then the habit of practicing every day will not form, just as the habit of opening your application every day will not form.

And, on the contrary, the Retention Rate is slightly less important, for example, for the delivery industry. Most likely, users will not order groceries from the store every day. In this case, this metric of the effectiveness of a mobile application does not need to be written off, it is just more expedient to calculate the Retention Rate for a week, two, three or a month.

Also, this metric will not give a lot to understand about the effectiveness of the mobile application for booking seats in a restaurant. A person can use it a couple of times a year when he wants to celebrate a birthday or wedding anniversary. The rest of the time it will not open the application. And it will not delete either, for example, because of the convenient bonus program. The retention rate in this case will be low, but it can be assumed that the application is conditionally effective.

How to calculate: There are several counting options. The classic formula is the sum of unique launches on a certain day after downloading, divided by the number of users who installed the application on the 1st, 2nd, 3rd, etc. day and multiply by 100%.

How to increase:

• Make sure that the application interface is clear and user-friendly. Analyze user behavior using heatmaps, for example, and continually improve UX and UI.
• Work on onboarding. If during the first use people do not understand how to place an order, choose an address or enter a card number, they are unlikely to want to figure it out for a long time. Design clues that will be useful to them at different stages.
• Use gamification. For example, award points at the end of the week for completing daily assignments.
• Remind about events via push notifications and emails. In doing so, try to take into account their interests, time of activity and reactions to alerts. Notifications should be associated with help and concern, not annoyance and intrusiveness.
• But the most obvious thing is to make a product that will solve the problems of your target audience. The decision is so good that people will want to visit the application more often – without reminders and different ways of motivating.

In-app purchases

This cost-benefit metric helps you assess how the development affects the company’s bottom line.

May be needed if you have released an application to support a product or service. For example, we added the ability to pay for an order through an application on a mobile device, in addition to paying to the courier or only on the website. In this case, an increase in orders may indicate its effectiveness. And, on the contrary, if the payment for services through your application has increased due to a decrease in the payment for services on your site, it is difficult to talk about the effectiveness of development. Because the income hasn’t really changed.

How to increase:

• In order for in-app purchases to bring tangible benefits, you need to attract new customers. And those who have not been your client before. Another way is to increase the number of purchases made by existing customers.
• Make the process of product selection and payment as easy as possible. For example, if possible, implement convenient filtering, automatic form filling and saving of entered data.
• Return users. You can motivate shopping with ads, email newsletters, and push notifications.
• Launch a loyalty program. The chance to get a discount or save on shipping is a good reason to order from you, not a competitor.
• Add additional blocks. For example, cards with personalized recommendations or popular products.

Net Promoter Score – NPS

Net Promoter Score – customer loyalty index. To find out, customers are asked the question “are you ready to recommend the company, for example, to friends or relatives”. The rating is put on a scale from 0 to 10. Analysis of the responses received allows you to find out how many people are satisfied with the application, how many are neutral, and how many are negatively disposed.

It’s great to take this into account, especially if you’ve done polls before – there will be a clear “before-after” picture.

The problem is that the development and implementation process can go on at the same time as loyalty programs are launched or prices increase. These processes may well influence the responses of people to a survey, but will not directly relate to the assessment of the application.

How to count: All answers fall into three categories:

1-6 – critics. Users who are unhappy with the app. May leave negative reviews and delete it.

7-8 – neutrals. Neutral – they will not give low ratings or negative reviews, but there is a possibility that they will go to competitors.

9-10 – promoters. Those who are happy with the app and most likely will recommend it.

After that, from the sum of ratings from 9 to 10 “promoters”, you need to subtract the ratings of “neutrals”, divide the resulting difference by the number of respondents and multiply by 100.

NPS can be improved by constantly analyzing customer information. In addition to the information that you can get from analytics systems, ask them to evaluate the convenience and functionality of the application. Ask questions about what other features they would like to see and draw conclusions to improve the product and the company.

Lifetime Value – LTV

Lifetime Value – the customer’s lifetime value makes it clear how much income he will bring for all the time that he uses the application. This metric shows how much one new customer costs for the company, and how much is his loss. It is generally accepted that the cost of attracting a user should be about 3-5 times lower than its value. That is, a situation when you spend 1000 rubles on attracting and get 1000 is a bad option.

Every business should focus on LTV. If you calculate revenue per user, you can use LTV with other metrics. This will help to draw accurate conclusions in assessing the effectiveness of a mobile application and determine the optimal budget for marketing and advertising.

There are several ways to calculate Lifetime Value… Marketers often use the formula: LTV = a * b * t

where a is the amount of income from the user, b is the cost of attracting him, t is the time of using the application.

How to increase this indicator:

• Run incentive promotions. For example, add bonuses or give discounts for purchases and actions performed.
• Don’t forget about UX. If a person constantly faces the same problem, they may simply stop using your product. Therefore, even after the user has interacted with the application several times, it is important to analyze whether he had any difficulties at some stage, whether there are interface elements that can be improved.
• Provide timely feedback. This measure will help to increase any performance metrics of a mobile application. Feedback from customers will help make the product better, and it will make it clear to users that you care about their wishes and reviews.

The choice of metrics by which it is better to assess the effectiveness of mobile applications depends on the scope and specifics of the business. The main thing is to define a group of indicators before the release and evaluate them according to the assumed KPIs. Use heatmaps to see how people behave in your app, place targeted action buttons on the most popular pages, and keep a close eye on the customer experience. The effectiveness of mobile development depends on it.

For nine years, AppCraft studio specialists have launched several of their own projects, dozens of client projects and have accumulated a lot of expertise, which they are happy to share. If you are thinking about creating mobile applications for android or iOS, write or call us – we will answer all your questions.