The App Marketers’ Guide to Cutting Costs by Increasing Retention

For many mobile marketers, the golden measurement of an app’s success is downloads—or more specifically, installs.

But is increasing customer acquisition truly the best objective for today’s mobile marketer? Perhaps not. It’s time for app marketers to set their sights on increasing retention to cut costs, drive revenue, and build better relationships with their customers.

To help you make the best decisions for your brand, we created a brand new guide packed with new data, trends, and tips: The App Marketers’ Guide to Cutting Costs by Increasing Retention.

Best of all? The guide is free for anyone to download!

What will this guide teach me?

The App Marketer’s Guide to Cutting Costs by Increasing Retention is packed with new data and information on why installs are artificial indicators of app audience, how to use customer retention to cut costs, how retention provides trust signals for new customers, and tips for boosting mobile app retention.

Widely accepted best practices around mobile app marketing are beginning to emerge, but app marketers are still racing to lead the pack in their industry verticals when it comes to mobile app customer acquisition and retention. After analyzing thousands of leading mobile apps, we’ve found two key trends around installs that might leave app marketers questioning their current marketing strategies.

Here’s a quick peek into the information around both trends, but be sure to download the guide for a deeper dive:

1. Installs are getting more expensive.

With over 1.4 million apps in both the Apple App Store and Google Play Store, it’s getting harder to vie for the attention of the customer.

Many marketers attempt to circumvent the app stores’ search ranking algorithm by acquiring customers using app install ads. The downside of app install ads is that the cost of acquiring a loyal mobile customer (defined here as someone who opens your mobile app at least three times) has risen significantly in the last year. According to Fiksu’s Cost Per Loyal User (CPLU) Index, the average CPLU increased 39% from May 2014 to May 2015. Specifically, the base CPLU rose from $1.78 to $2.47 during that time.

With app install spending expected to grow by 80% this year according to eMarketer, the cost of acquiring a customer may even outweigh the lifetime value of that customer—rendering your ad campaign economically impractical.

Unless you have a good understanding of both customer acquisition costs (CPI) and average revenue per user (ARPU), you may be in for a big surprise with your ad spend return.

2. Installs are an artificial indicator of your app’s audience.

Your app may see thousands of new installs every day, but how do installs translate to your audience? How many of these will become active, engaged, and profitable customers of your app?

On average, only 25-40% of new customers will re-launch an app after the first week. This number diminishes as time goes on, ultimately falling to 4% one year out. Of these retained customers, only a small proportion will continue on to be active and engaged users of your app.

In other words, downloads and installs say little about the true health of your app. According to our research, only 40% of customers continue to use an app they downloaded a month ago—and this number plummets to 4% over the course of the first year in the customer journey.

For deeper insights into boosting retention in order to cut acquisition costs and provide a better experience for customers, download your free copy of The App Marketers’ Guide to Cutting Costs by Increasing Retention now. Enjoy, and happy retention building!