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Loyalty & Retention

App Developer Conversations: How App Developers can combat rising CPI and acquisition costs

Robi Ganguly  //  August 31, 2012  //  8 min read

In this week’s App Developer Conversations with Ian Sefferman of MobileDevHQ and Ryan Morel of PlacePlay we discussed rising CPI costs and the competitive environment that seems to be crowding out smaller app development shops every day. We wanted to further examine the points that Jon Jordan brought up in his post earlier this week, “User acquisition is a waste of money, and will eventually kill the mobile games industry”.

We covered the topic across three segments. In this segment we really dug in about how app developers can combat the rising CPI costs. We settled on a few key tactics:

  • Ensuring that you’re on top of your discovery strategy. You can be smarter about how customers find you via app store search
  • Developing relationships with your app customers – when people know and trust you, they stick around for longer, helping your ARPU equation
  • Being scrappy about developing your relationships with bloggers

Watch to find out more and be sure to see the other two segments from this week:

We hope you enjoy this series – please let us know in the comments about future topics you might want to hear about and if you have anything to add to the discussion!

The Transcript
Robi: Welcome back to App Developer Conversations. I’m here with Ian
Sefferman of MobileDevHQ, and Ryan Morel of PlacePlay. I am Robi Ganguly of
Apptentive. In part one we were discussing app installs, the cost and how
they’re rising, that sort of thing. We’re going to talk a little bit this
time, about how you as an app developer can combat this rise and see for
you guys what you’re going to do to be competitive. I’d like to start off
by asking Ian about what you see from the discovery perspective because it
seems like a lot of installs are really about forcing discovery and making
sure that awareness is out there. What can an app developer do on their
own?

Ian:We’re actually seeing, especially with smaller game publishers, that
search is actually a really important driver for them. Obviously, we’re
super invested in search. Thinking about search and social and sharing,
earned media, all the organic channels seems like a really easy way for
developers who are spending a lot right now, to lower their overall cost to
acquire customers. I think for the indie developers, they can really think
about how, if they’re getting priced out of the equation, if they focus all
of their resources over to the organic side, they’ll have a lot of success.
We’re seeing publishers receive up to, on a small publisher, up to 5,000
downloads a day in search on one app, which is real volume. I think that’s
really important to think about as well.

Robi: What about you, Ryan?

Ryan: Yes. We all kind of talk a little bit about this ourselves. In search
and engaging consumers and our engaging features. I think the key beyond
just the organic traffic is really paying attention to the retention of
your users in-app. There’s a bunch of different ways you can do that, and a
bunch of ways you can think about it. In the old days it was, “We’ve got a
user. Great. Fantastic. Let’s go get another one.” Now it really needs to
be about, “We’ve got a user. Let’s move them all the way through the life
cycle, so we can extract as much revenue from them as we can; and/or
extract as many recommendations to friends, etc.” So, I think it’s created
this really interesting opportunity for people to pay better attention to
how their users are engaging on an ongoing basis and probably creates
opportunities for people to get closer to their users and really work to
keep them. What do you think?

Robi:Yeah. The way we approach the world at Apptentive, because we’re
helping developers talk to their customers and develop relationships, is
very much that retention is a big deal. Most people are overlooking it but
there are simple things you can do to talk to your customers and understand
what they want and what they need, and how to actually be something they
think about on a daily basis as opposed to using once and forgetting about
it. Just taking the time to interact, actually ask them questions, talk to
them, figure out who really loves you and making the leap from having
people love you, but leaping then to having those people who love you
actually go talk about you. It tends to pay off really significantly.

When you have lots more people talking about you positively in the app
store, when your ratings and reviews are phenomenal, and if somebody
discovers you through search or they discover you just because they’re
tapping through some of the other navigation systems in the app stores,
they’re much more likely to download you. It’s not because you’ve written
necessarily the best description, but because people are saying, “Wow. This
was totally worth my time and I love using this app.” Just taking that time
to really make sure that whatever base customers you have are evangelizing
you, and that they’re activated so that they’re retained for a long period
of time and they’re bringing other people in. That can really be a way to
build a healthy franchise, I think.

Ian: What’s great is that these things are totally a virtuous cycle.
Putting resources towards search and your app store presence and things
like that, will drive users. Focusing on the retention of users and getting
better ratings puts you higher in searches because they factor in search,
which will drive more users, which will drive more ratings. It’s a total
virtuous cycle. It’s fantastic stuff.

Robi: The best companies at this, whether it’s in mobile app development or
just out in the real world, are companies like Starbucks and Nordstroms,
seeing increasing amounts of profit coming from the fact that they have
this relationship with people. It’s valuable everywhere, I think.

Ian: Yeah.

Robi: What else can we do as independent app developers to be aggressive?
Have you seen guerrilla tactics in the PR sense? People making
relationships with journalists, or are people doing a big splash around the
launch of an app that got attention? But, was it a $200,000 CPI campaign?

Ian: We’ve spent quite a bit of time talking about this on our blog with
some of the developers we work with. I think it’s hard to make a really big
splash in PR and see long-term, sustained success from that. We see a jump
and then it goes down, just because there’s so much out there. My
recommendation to developers is always try to engage your consumers. Not
only in app, that can be through some of the stuff you’re doing, but also
outside the app.

Driving people to like you on Facebook and doing an actual good job
communicating with them through that channel, doing a good job driving
people to like you on Twitter, enticing them to share your contact with
their friends, etc. We all know that friend recommendations make a really
big deal. They’re substantially more likely to take some action based on a
friend’s recommendation than a random person’s. I really think this will
push developers to the mindset of “Hey, we need to be really smart about
engaging our consumers across various channels and getting them to share
with their friends.”

Ryan: I think I’m slightly more pro-PR than you are. I think in general,
I’m just more into thinking about being creative through content marketing
and things like that. A really great example recently this week, was Adam
Tratt at Haiku Deck. Haiku Deck is sort of new age, new style, Power Point,
made for your iPad, a super slick, simple app. He has been from on the
ball, going out and taking all sorts of random sets of things. So, taking
very high-profile bloggers, distilling their thoughts into a slide deck and
then shipping that to bloggers. He did the Red Sox this morning, taking the
best players in Red Sox history, shipping off a slide and promoting that to
Red Sox blogs and Red Sox fans on Twitter and things like that. That type
of stuff is really interesting. Showcasing your product and why it’s useful
from a content marketing perspective. It allowed them to be really
successful. I know they were, over the weekend, number one in productivity
iPod apps, beating out Dropbox and Evernote. I think they’re sitting at
number two or three right now. It’s a really great engagement there. It
allowed them to have an awesome launch.

Robi: I’ve written about it on our blog before, but I think there’s
actually a lot of value to developing relationships with bloggers and
journalists who cover the type of apps that you’re making. I think there
are two reasons for that. One is that those relationships will certainly
serve you over time, just knowing those people and being closer to them.
You can be helpful and they can be helpful. The second thing is that these
big companies that you are competing against, that are creating the CPI
problem, part of their strategy is to outspend everybody. They’re not
necessarily focused on out thinking and out hustling you. I think that as a
small development shop or even an independent developer on your own, you
have that opportunity to really dig in and do the work of talking to these
people on a regular basis.

The advantage you really have is that the story about what you’re doing and
why you’re doing it is way more interesting to journalists and bloggers
than why EA is spending $300,000 on some new app or something. The story
that you have as an independent developer is inherently going to be
something more approachable and palatable for a journalist.

Ian: I didn’t mean to just come off like I think PR is worthless. Although,
for some people, I think it is, especially if you don’t know what you’re
doing. Adam Tratt happens to know what he’s doing. I think you brought up a
key word there, story. It’s telling a story across a variety of different
channels in a variety of different ways. PR is useless if you just put
together a slide deck and send it out, with no follow up and no hustle. If
you create a story around your app, your team, your brand, what you’re
trying to accomplish and you sell that to PR and bloggers, you sell that to
your consumers, you sell that via social media on an ongoing basis, now
you’ve built something totally different than just a PR plan, so to speak.
I think there’s still tons of opportunity and you don’t need to go out and
spend all this money. Clearly, lots of new people aren’t. It does mean,
like you said, you have to hustle more.

Robi: Anything else to add on that?

Ryan: No. I think hustle is the key word there. It’s not easy stuff to do.
You’ve got to work at it consistently and be willing to put in the time and
resources. I think there are large opportunities.

Robi: I think to sum up this conversation, there are two things. One is
that you have to know and engage your customers and understand their
methods of discovery and really get in their heads to make yourself appear
in the places they’re looking for you. I think, also, you have to realize
you’re not going to have the financial advantage but you can have a hustle
advantage. “Go hustle” is what I’m hearing for sure. In our next piece,
stay tuned to hear about what we think this has as a long-term effect on
business.

Ryan: The long-term business leads us to a point where people get much
better about when they’re selling their users, how they’re engaging them,
where they’re inquiring them from. Because although there’s a bunch of
really great tools to understand…

About Robi Ganguly

Robi Ganguly is the Co-founder and CEO at Apptentive. He is passionate about giving customers a voice via mobile. Follow Robi on Twitter @rganguly.
View all posts by Robi Ganguly >

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