In a world where millions of mobile apps are being released every month, it is important to understand how you will make your mobile app stand out. It is essential that before you begin app development, you have investigated the idea, and understand what it will take to ensure that the app succeeds.
However, what is also important is knowing that your app does not succeed just because you have followed the right strategies. Several things may influence its failure. For instance, maybe the idea is not very good at all, lacks a firm problem solving standing, and it didn’t stand a chance in the market.
Experts suggest that before embarking on the journey of developing your mobile application, it is prudent to consider the key performance indicators (KPIs) and how they reflect on your idea.
An important question to ask yourself is if you can predict the KPI numbers and how the growth of your mobile app will reflect in considering those indicators.
In order to model your own KPIs you have to consider the following four steps:
1) Monetization Formula
This is one simple question: How will the mobile app make money?
Understanding how you will leverage the presence of users to generate revenue is necessary. If you want this to eventually grow into a business, you must consider this as an initial step to determining what your performance indicators will be.
There are several monetization formulas:
- Purchase app – Users purchase the mobile app before downloading. Every new user pays their due in advance. In this case, you literally sell your app. Most apps are sold for between $0.99-$2.99
- Show Ads – Users download the mobile app for free and proceed to monetize it by showing advertisements to the users. In this case, revenues are based off impressions: how many eyes get to see the ad. The revenue per impression is varying depending on the industry. However, in most cases, you will need hundreds of thousands to millions of downloads to generate enough revenue using this business model. If your app is likely to go viral, this will be easy to achieve.
- In-app purchases – In this case, users make purchases in the app while using it from time to time. This business model has been well leveraged by mobile gaming applications. For example, some mobile games make players buy extra lives if they lose too much and can’t wait to continue playing, or buy credits in order to afford a better car, better tennis rack, etc. Candy Crush makes its users buy new lives if their free lives are over and they can’t wait for 24-48 hours when free lives have refreshed to continue playing. Using this style, Candy Crush became one of the biggest companies in the world, making millions of dollars a month.
- Subscriptions – Users have to subscribe for a particular period of time that automatically renews. This has been utilized a lot by health and fitness apps which makes users pay for workout plans and virtual coaches to guide them through weight loss or weight gain programs. Users subscribe on a monthly/yearly basis to continue using the app.
2) Visualize the potential growth using data
Create a simple excel sheet and list all the parameters that you believe would be indicating growth for your company. For example, revenues collected spreading over a period of 12 months, costs per installation, viral users, the viral coefficient, user retention (considers the churn rates and how long people stay on your app after the first install and signup), monetization, advertising, marketing campaigns, profits, investor costs, etc.
Luckily, you don’t have to create your Excel file from scratch. We understand you might not be an Excel formulas guru so check out mKPI.calc or Klipfolio for ready-made digitization files of all the KPIs with descriptions that make it easy to understand.
As you continue to run your app, release the MVP, and get downloads, understanding and predicting the KPIs that relate to mobile apps is critical if you are to model your own custom KPIs for your mobile app in future.
To get the initial data required for this step, use your analytic services like Native analytics for app store or Google Play, Localytics, among others. These will help you understand download numbers as well as many other metrics. Proceed to predict these numbers for your app to see what they look like.
The most important reason for this stage is that once you have visualized that data, after launching your app you will realize one of two things. #1 The numbers you predicted for your app are actually reflecting the reality in the app stores, or #2 the numbers are off and you are headed south.
Most importantly, after this step, you will have realized the KPIs that are most likely true for your mobile app.
3) Tweaking your product, and readjusting KPIs
The positive side is that if the numbers are off, you can go back to your Excel sheet to check your predictions and then realise which KPIs are not performing as expected. You can then begin to do the necessary readjustments before spending a fortune of time and money on the idea. It is the same concept with Saas companies of releasing the MVP, then continuously tweaking it using collected data to ensure that everything eventually falls into place.
You can even go ahead and project the new numbers in the data to reflect what might happen if required changes are made. This is the stage where you learn how to strategise, and what strategy will be better used to hack your growth based off the early numbers. If your marketing strategy indicates more promise as a KPI than your advertising strategy, you might want to focus more on the former.
4) Getting your message in front of more people
One important metric that stands the test of time for mobile applications is public relations. It has always led to more attention to mobile apps. Even as you tweak your KPIs to figure out which one organically performs better than the other, do not forget that the more people see you in the news getting your story shared by the press, the more your download numbers skyrocket. Remember, no investor would like to put their hard-earned money in an app making $20,000 per year, the numbers need to be much better than that.
Pressfarm has worked with a lot of startups to know that mobile app downloads are boosted so much by press attention. It only takes appearing in one online publication to begin pushing the numbers further and Pressfarm’s PR team can help with that if you reach out to us today.