Key performance indicators (KPIs), as their name implies, are crucial for determining how well your mobile user acquisition strategy is working.
The following are the most important KPIs to incorporate as part of your app user acquisition strategy. By tracking these metrics for mobile apps, you will be able to better understand what your target users respond best to, something that is crucial for increasing user engagement of your app marketing efforts.
- Retention rate
The first key metric for mobile apps is the retention rate. Advertisers can understand their app's marketing performance over time by looking at its rate of retention, i.e the percentage of users who still use the app a certain number of days after install. This metric for mobile apps can be calculated by:
dividing the number of users active on a certain day after the app install by the total number of users who have installed the app in the time period considered.
An effective retention rate is a crucial sign of users' satisfaction with their experience of an app, and the effectiveness of this app marketing effort. Long-term users of your app are ‘high-quality users' as we like to call them, as they are more likely to give higher engagements and generate more revenue from your app marketing .
The average revenue per user is an indicator that measures the revenue generated per user or unit. ARPU is a clear indication of how profitable an app is, and at the same time it is an evaluation and optimization tool for app marketing. Hence you can see why this is a safely guarded mobile app metric by all. It is calculated by:
The total revenue, divided by the total number of subscribers.
If you want to get the most accurate ARPU measure, it should be estimated for a given time frame, since the number of units can change daily.
Lifetime value (LTV) is a core metric to follow for any app user acquisition strategy. It is important to bring in new users, but what you do with these users is the fundamental element, you want them to stay forever right? Lifetime value can easily calculate the lifetime of a user and the revenue your app marketing efforts will generate from them during this lifetime.
LTV (Lifetime Value) is often confused with ARPU, but they measure different things: LTV is a measure of the entire value generated by a single user during their relationship with your company, while ARPU measures the average revenue per user in a given time frame.
Customer acquisition cost is a mobile app metric that is closely linked with ARPU, as advertisers try to compare ARPU with CAC in order to understand if and how much they're earning from the app install campaign. When money generated from users (ARPU) is greater than money spent to acquire those users (CAC), then advertisers are making a profit. Advertisers aim at an ARPU higher than the CAC. The fundamental purpose of CAC is the calculation of:
The full cost of earning a new customer over a defined period. If your CAC is smaller than your Average Revenue Per Paying User (ARPPU) over the long-term, then you make money.
From a business point of view, the lower, the better. If your CAC is low, then your app marketing efforts are profitable. If you want to increase the number of paying users, a CAC calculation is helpful. If the expansion of an app's user base is your goal, your CPI is a metric more suited for you.
- Daily/Monthly active users
As the names suggest, tracking your daily or monthly active users just means seeing the number of active users within either of these given time frames. Used on its own, Daily Active Users is not that valuable to track performance for app marketing efforts. To ensure you’re getting the full picture of user engagement you need to use it alongside Monthly Active Users.
You can determine whether your user numbers are trending positively or negatively by monitoring your MAUs. Knowing this, you can better understand how much time to devote to mobile user acquisition strategy and retention methods.
Comparing the two in a DAU/MAU ratio, also called stickiness, is the proportion of monthly active users that engage with your app in a single day. A DAU/MAU ratio of 50% would mean that your users engage with your app, on average, 15 out of 30 days.
It is easy to see why tracking your return on investment is fundamental during any mobile app marketing strategy. However the real question is, which KPI do I track to see the best representation of this? Well we believe ROAS is the best mobile app metric.
Return on Ad Spend (ROAS) measures how much revenue is generated from a specific ad or campaign; it allows you to calculate the revenues generated from each dollar spent on app marketing efforts and to calculate the performance of digital advertising spend.
Return on Ad Spend (ROAS) calculates how much revenue was generated for each dollar spent on a specific ad or campaign (ROAS = Revenue of Ad/ Ad Spend).
When it comes to app campaign optimization and the necessity to track numerous campaigns, channels, and ad platforms in order to determine which ones are the most successful and, consequently, which ones should continue to receive budget allocation, ROAS is most helpful in mobile marketing. You may raise your ROAS by optimizing your app install efforts.
So far all of these mobile user acquisition metrics have been universal in their application across all app verticals. However, based on your app vertical, some KPIs most important to watch will differ. Whatever the vertical, mobile gaming, fintech or shopping apps, or others, there will be specific KPIs for these separate categories that you will depend on the particular app marketing efforts within that vertical. But don’t worry, we’ve got you covered: take a look at our series of KPI articles:
Follow each to be sure to apply the best mobile user acquisition strategy for your app marketing efforts