Chapter 1: App Success Factors

There is a difference between successful and unsuccessful mobile app campaigns when it comes to market analysis and analytics. Those who win, do research in the market and set a well structured measurement plan before they even think of tools and resources. Those who lose do not. If you are not the one to join a group of failures here is some advice on the app success factors.

Market analysis

With more and more devices appearing on the market and rising appeal to mobile interaction among customers, the temperature in mobile app industry increases.

The connection is clear: the more devices where apps can be distributed and monetized, the greater demand for the products and the more competitors will enter the market.

At the same time one can clearly observe the multitude of competitors offering similar products. When this is combined with the fact that many of them aim to meet the same needs, the result is zero-sum competition which drives down profitability.

However mobile app industry is very segmented. It means that rivalry can increase profitability in case each competitor will aim at a particular customer offering different mixtures of features and brand identities. Fortunately, breadth and diversity of apps, which attracts different social clusters, allow developers generate new values.

Doing research on the market make sure you are focused on offering a competitive advantage, which comes from innovation, content and form of monetization.

1. Channels of distribution comparison

The 2 leading companies, with which mobile app production makes most sense, Apple and Google have established their own platforms in different ways with unique programming languages, inherent development-supporting tools, distinctive evaluation procedures, etc. It all contributes to the dilemma “which is the right platform to start with.” However all you need to do is to see what works well for both and compare. It might be worth surfing the world net for the top app range on other markets and dip the ideas from there.

Do not take aim to cover several channels from the beginning. When you get the idea of how your app interacts with users on one market, proceed to another one. But make sure your business initiative is supported by relevant data.

2. Product research

The goal of this step is to examine and assess existing products. After you line the product extension potential and find the key strengths points that make the apps valid and the weaknesses that you should avoid, you have an opportunity to succeed and minimize the threat of being crushed by the competitors by offering better solutions in design, idea and functionality. If you have generated a unique idea and found the segment that is waiting for its realization make sure no one else has already done the same thing. If they have, don’t get discouraged, even the most commonplace apps still have a potential to acquire a dignified competitor.

3. Usability SWOT analysis

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Strengths, Weaknesses, Opportunities and Threats are 4 main factors when it comes to usability. Customer satisfaction drives benefits to your app mobile campaign and contributes to the growth of loyalty to your product and as a result to your brand if you use an app as addition to it. Active users who engage with your app are those who do valuable actions and increase profitability.

Market demands are constantly growing and customer expectations generally rise over time as advances in technology in many categories boost the consumer consciousness of what to expect. SWOT qualitative research in existing products helps to understand trends and new opportunities in this industry and predict user behavior with you app. These observations will show you action pathways that will lead to the end point of a customer loyalty growth.

4. Monetization models comparison

The pricing strategy is focused on finding monetization model and optimum price-feature configurations depending on the application type and target audience opportunities. You should compare making money models applicable to your type of an app and check customers’ sensitivity to pricing.

Free apps are becoming a rule on the app market. Gartner the world’s leading information technology research and advisory company, did extensive worldwide research in total mobile app downloads in App Store, which figured a significant growth of free app download and it will grow to 93 percent of downloads by 2016. In-app purchase according to the research is rising as a monetization tool and will be present in 30 percent of apps by 2016.

According to the report done by an analytic firm Distimo,which studied how the most successful apps monetize, in-app purchases make majority of revenues in app stores. In U.S 76% of all Apple App Store revenue in Feb 2013 was generated using in-app purchases. The figure was even higher in Asian markets including South Korea, China, Japan and Hong Kong, with over 90% of revenues coming from in app purchases.

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As an example to this, Evan Spiegel, a founder of Snapchat, the ephemeral messaging service that has grown extremely popular over the past year, said on Techcrunch “In-app transactions will come first,”. “We think we can build really cool stuff people want to pay for. The app is now a part of everyone’s day-to-day lives. That means that they will — I at least would — pay for a more unique experience.”

In-app purchase monetization model is good news for developers who put out a quality product but may not drive enough download numbers to make in-app purchase work well or don’t have an app that easily lends itself to in-app purchases. That’s why most monetizing campaigns need time and metric analysis until they will bring you any tangible results.

Another model worth considering is an app that can generate content and win from it. Internet radio service Pandora is a perfect example of a top grossing app which monetizes its users via a subscription model. 

 If you would like to rely on advertising model as a revenue generator draw your attention to native advertising and “smart advertisement”. According to the mobile advertising network Appnext, most ads typically fail to generate substantial revenue because of their placement within apps and the timing of their appearance.

 Business Objective

When you accumulated enough knowledge and beneficial details from market analysis and your mind is full of useful ideas and thoughts, time to give an answer to the question: Why does your campaign exist?

The answer requires clear understanding of your business initiative and multiple discussions with your team.

If your objective is going too far, you’ll never get anywhere. If it is too vague, nothing will get done. If it is too lame, it’ll inspire no one. Set an executable, understandable and manageable objective that delivers value to the company.

When you set a business objective make sure you know the right business strategy and tactics that will help you achieve your goal.

As an example, our app My Day had the following objective:

KPIs

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A key performance indicator (KPI) is a metric that helps you understand how you are doing against your objective.

The best approach to follow in mobile app industry is AARRR, which stands for:

Acquisition: various channels the users come from;

These metrics will give you quantitative data referring to best working channels in your acquisition campaign.

When you are thinking about advertising campaign for your app don’t forget about social media as tools to boost customers’ loyalty. According to the research published to Forbes, investment in social media in 2014 will become a necessity.

Activation: users enjoy 1st visit: “happy” experience;

Qualitative+quantitative data analysis will give you insights concerning user interface particularities and whether it satisfies the needs of your customers.

Retention: users come back, visit app multiple times;

These metrics are your brand quality indicators. Check out user behavior and the number of returning users to see what you’ve missed and what should be done to increase user engagement.

Referral: users like product enough to share with others;

Focus on user satisfaction and outcomes. If your product or the content it generates is that useful and attractive, it will provide its own advertising campaign through social media integration tools. Also think about the features you can build in which can be an incentive to share.

Revenue: users behavior brings you money.

Define an average revenue per user which will indicate the value of a separate individual to your app business. Identify the conversion paths, the sequences of interactions (i.e., clicks/referrals from channels) that led up to each conversion and transaction.

After the KPIs are found you should identify the targets.

Targets are numerical values you’ve pre-determined as indicators of success or failure. However, it is a rather hard task if you don’t have any experience. It is difficult to measure without having some sense of what good or bad performance looks like. Rely on successful examples.

Focus on the following segments:  identify the sources of acquisition, types of people desirable, their attributes, their behavior, business outcomes and what the customers might want to accomplish using your app.

Iterative development

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The product has been launched. Is the work over? Not yet, it’s just the beginning. Growth hacking implies iterative development.

The purpose of working iteratively is to process data, assess metrics and introduce changes accordingly at the stage that follows initial app release. Analysis of every action of user interaction with your app in accordance to the KPIs will induce the need for some changes and optimization. By working iteratively, the project team goes through a cycle where they evaluate with each iteration, and determine what changes are needed to produce a satisfactory end product.

Every change that you introduce should derive from metrics analysis. Sometimes your updates may include a variety of options and it is hard to predict which option can bring valuable outcomes.

Every iteration implies perfection oriented testing and experimenting that will bring benefits only if pay attention to relevant data.

So do pay attention to metrics, make well-grounded solutions and don’t ignore testing. If you have launched an app for Android platform, as a tool to try out the changes Google Play provides stage rollouts functionality, which is a great way for experimenting with app updates on users directly.

Make sure you follow the metrics and iterate continuously.