Five metrics that make or break mobile apps

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FIVE METRICS THAT MAKE OR BREAK MOBILE APPS


APPS ARE TAKING OVER THE WORLD Ever since their advent in 2007, new generation smart phones

Starbucks gets 14% of its in-store U.S. payments from its mobile

and apps that run on them have become an indispensable part

app, and 25% of Starbucks' loyalty program transactions are made

of life for a quarter of the world’s population. Mobile apps are

via the mobile app.

becoming the de facto gateway for users to consume Internet services. App publishers are working hard to create apps that have high retention. Localytics studied the average number of times an app was used. Between 2011 and 2014, the percentage

Developing effective apps that provide best user experience and have high retention is both a science and an art

of apps used 11 or more times comprises nearly 40% of all apps up from 26% four years ago. Apps that have been runaway

Creating successful apps that have high retention is both a science

success are those that engage users, and provide a great user

and an art. An analysis of successful app adoption and retention

experience. Starbucks is an example of a successful mobile app

reveals that they are created from a clear strategy and rooted in user

that has a high retention. This is a result of a deep understanding

behavior research. App publishers usually measure a few key

of user behavior and leveraging this understanding to provide an

metrics that provide vital information on app adoption and retention

unbeatable user experience. Starbucks’ mobile strategy is to

to tweak their apps so that they provide the best user experience,

increase engagement with their customers who throng its cafĂŠs.

and become sticky.

Five Metrics that Make or Break Mobile Apps

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THE ART AND SCIENCE OF USER BEHAVIOR RESEARCH The app provides the opportunity for the publisher to literally be

app is not context aware of the transactions of the user in the web

in the hands of users all day long. When the closeness of interac-

application.

tion is this intimate, the app must enhance user experience and loyalty. Most app strategies focus on achieving the largest

Apart from strategy, it is important to research user behavior.

possible engaged users who use the app on a regular basis over

Insights from user behavior research along with strategic goals are

an extended time period. This signifies user stickiness that is

critical inputs while designing and developing the app. For example,

often a result of high perceived value and great user experience.

it is critical that users start on the right note when they first open the

The measure of user engagement is often specific to the

app. User research is used to identify how much the user wants to be

Internet services industry vertical. For example, a mcommerce

taught on using the app, and how much the user wants to self-dis-

app measures engagement by number of users who purchase,

cover. Analytics is used to determine user segments with specific

average purchase size, and the point at which people abandon

initial user preferences based on demographic data, and this

their shopping cart. Two aspects that are increasingly a

information is used to customize the app for a user.

must-have in mobile apps are cross-platform compatibility and seamless access anywhere anytime. Once the app is developed and introduced in the market, it is imporApp publishers realize that they need to develop mobile apps to

tant to measure and monitor a few key metrics. These metrics

reach a wider base of users across platforms, and those who

provide insights on how well the app is performing, and form the

switch platforms and devices. The users demand and expect all

basis for mid-course corrections. UX researchers at Google have

the apps that are available to them in one platform are also

developed a strategic framework to define and choose appropriate

available in other platforms. Not only that, users demand the

metrics categories that reflect the quality of user experience. This is

same overall user experience is maintained across different

known by the acronym HEART.

platforms. App publishers are increasingly adopting cross-plat-

Happiness: Measure of user attitudes. E.g. user experience

form development technologies to ensure their apps are

related metrics

developed on code bases and technology that allow the app to

Engagement: Level of user involvement. E.g. frequency of use

be distributed and deployed across multiple mobile platforms

Adoption: Active users of the app. E.g. value metrics like

and devices.

visitation rate Retention: The rate at which existing users are returning. E.g.

Users today have multiple screens. This means that they are

number of active users

constantly on the app from a mobile phone or tablet. Or they can

Task success: This includes traditional behavioral metrics of

be on the web portal on a computer. For example, a user of an

user experience. E.g. session length related to time required

ecommerce service can start adding an item to the shopping

for completing a task

cart while accessing the portal on a computer at work in the morning. The user can modify the shopping cart by adding

This framework is applicable in multiple use contexts including

another product by using the mobile app during lunch. Finally,

mobile apps. The Google UX team has used the HEART framework to

the user can access the app from a tablet post dinner to check

a wide range of projects within Google, and found it useful in different

out, and make the payment. The user expects the app in the

use contexts. We believe that the HEART categorization is apt for

smart phone, in the tablet and the web portal all seamlessly

mobile apps since it provides a collectively exhaustive set of catego-

work in tandem to provide a seamless anytime anywhere experi-

ry list that serves an important design guideline for app developers.

ence. User experience with the mobile app drops if the mobile

Five Metrics that Make or Break Mobile Apps

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FIVE CORE METRICS THAT ALWAYS MATTER A plethora of metrics that aligns with the HEART framework can be measured. While many of them are nice to measure, we believe there are few that are a must have to get a good grip of adoption and retention.

Value The most important metric is value. Often, this metric gets

Internet services industry domain. For example, it is visitation rate

dubbed as “old marketing” and is not given the importance it

and value of purchases in a mcommerce app or number of ads

should. The value metric is comparative. In contexts where the

streamed in a news app. According to Compete, during April –

app is the only channel for the customer of Internet services, the

September 2013, Amazon had an average of 7.16 visits/month on

value of different segments of users is analyzed. Where the app

mobile vs. 3.39 visits/month on desktop . This provides a context to

is one of many channels, the value of customers from the mobile

Amazon’s strategy to introduce the Fire mobile phone preinstalled

channel is compared to value of customers from other channels.

with the Firefly app to retain mobile users, and make them stickier.

It is useful to identify the segments of users who provide the highest value to the publisher. Measuring value depends on the

Five Metrics that Make or Break Mobile Apps

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Retention Rate and Frequency of Use A direct measure of retention is the percentage of users using the app say thirty days or ninety days after installing the app. This is a good measure to judge if the user finds the app engaging and also whether the app is used frequently on a continuous basis. A related metric is frequency of use per week that is the number of times the user uses the app in a week. Flurry analyzed a large universe of apps for retention rate at thirty days and frequency of use per week. The summary of their findings provides interesting insights:

Retention rate over 30 days

Frequency of use per week

Examples of app categories

Impact on retention

>35%

>5

Communication and News

Deliver enduring value over time

<35%

>5

Deliver value in bursts

<35%

<5

Streaming Music, Dating and Social Games Personalization (e.g. screens)

>35%

<5

Airline, hotel or rental car-booking

Used infrequently but deliver very high value

Once-and-done

Across all categories of apps, the average retention rate over 30 days is 54%, over 60 days is 43%, and over 90 days is 35%. The average frequency of use per week across all categories is 3.7

Session Length

A more engaged user likely to have a high retention rate is one who spends more time with the app. This is the first level of measurement for user experience and stickiness. While a long session length is a good measure of user engagement in most Internet services contexts, it may not be so in a few. For example, a long session length for a taxi finding app will mean that the app is not effective in quickly finding the user a taxi. Many mobile app sessions last less than one minute, a few sessions last longer than ten minutes, and the average session length comes is just over five minutes.

Five Metrics that Make or Break Mobile Apps

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User Experience One of the criticisms of the session length metric is that users

Other measures require a detailed feedback from users on aspects

may be spending time on the app not doing what they want to

like usability of the app, endurability of experience and novelty of

do but figuring out how to do it. The time spent trying to figure

experience. Some app developers use in-app feedback especially to

out how to do something does not lead to a good user experi-

report about crashes, bugs and UI. The most important aspect of

ence or retention. Publishers analyze the reviews that users

measuring user experience is to take action – redesign or reengi-

provide on the app stores to understand user sentiment. A quick

neer the app to improve user experience.

measure of user experience is the ratings score on app stores.

Active Users Active users are how many unique users use the app on a daily

the highest ratio of daily active users to monthly active users of

or monthly basis. Daily active users are important since they

72%. This is a measure of the high level of stickiness of users.

are of the core group of users that the app publishers need to

Communication apps have a ratio of about 50%, and other apps a

engage and retain. An interesting example is Whatspp. It has

ratio between 10% and 20%.

The focus of these metrics is on adoption and retention. They help the app publisher to fine-tune strategy to provide value to users, and also derive value from them.

THREE USER RETENTION GOALS THAT ALSO MATTER App developers need to focus on three important retention

Stickiness: Gamification is a good strategy to engage users to

goals - user retention, existing user retention and stickiness.

make them sticky to the app, and increase usage. This should be based on a deep and contextual understanding of user

New user retention: App developers need to ensure that the

behavior insights. These insights should translate into design

app is engaging and impactful in a super short time frame of

elements in the app that targets the user’s intrinsic

the first sixty seconds of first use to retain the new user.

motivation.

Achieving high new user retention should be a specific focus of ethnographic user research and app strategy.

Connecting user behavior insights to the strategic business goals, and tracking key metrics ensure that the app is what both the user

Existing user retention: Fatigue with the app prevents exiting

and the publisher want. User behavior research is essential to

users from returning to the app. The app developer should

unravel counter-intuitive user behavior nuggets. These insights

leverage smart analytics and user research to determine what

along with a focused app strategy including gamification are essen-

new to showcase and how to showcase it to the user. While

tial to increase customer engagement with the app, and motivate

gamification is gaining popularity as a strategy to engage more

them to consume more of the services provided by the app. This

with existing users, another effective way to engage is through

leads to higher adoption and retention of apps.

targeted in-app messaging.

User behavior research is essential to improve app adoption and retention

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EMERGING TRENDS IN ANALYTICS AND USER BEHAVIOR Insights from Ethnographic User Research Ethnographic user research helps discover hidden use cases

users want to know about the latest styles introduced from the app

and usage patterns that often provide deep user insights. It

while the users may equally value information on nearest store.

helps identifying user needs that are not satisfied by the mobile

This insight is provided by ethnographic user research where the

app, and is used to assess the market for features that are not

researcher notes that the user searches for the fashion brand in the

yet in the mobile app. These insights are increasingly used to

map app since the app does not provide that feature.

develop or modify the mobile apps that have high adoption and retention. For example, a fashion brand may believe that the

Gamification Gamification is the use of game like rewarding for completing a

Gamification provides insights and data to sales teams that help

task or friendly competition to trigger the users’ intrinsic

identify and focus on important behavioral traits. Gamification lets

motivation. User motivation to use apps with gamification

every member of the sales team identify and use the key behavioral

aspects comes from friendly competition that positively

traits. Once the members experience the reward and recognition,

motivates humans. Gamification usually does this in the form

adoption of the desired traits increases. This improves the overall

of leaderboards. If the user has a competitive spirit, gamifica-

performance of sales teams. The focus of gamification in the near

tion in the form of leaderboards in apps can create a great user

future will move away from the implementation of low hanging

experience for users, and aid app retention. Another domain

fruits like leaderboards and badges, and focus on behavioral design

where gamification is making inroads is in customer relation-

aspects like co-opetition.

ship management (CRM). According to a salesforce.com study, most gamification initiatives in CRM are successful.

User Analytics in Mobile Enterprise Application Platform (MEAP) by

future. We expect leading MEAPs to provide integrated user analyt-

established companies often leverage a MEAP. A good example

ics, and also integrate with a broad ecosystem of third party mobile

is the context of extending the customer portal as a mobile app

app analytics providers. The MEAPs are likely to include an analyt-

in B2C contexts like banking, telecom services or any subscrip-

ics dashboard for collecting user feedback and analyzing usability

tion based services. The existing links in the web portal to the

metrics. We expect MEAPs to offer libraries of metrics that can be

back-end systems like customer accounts, service provision-

collected from the apps’ usage. While it is a wish list now, MEAPs in

ing, billing, etc. need to be replicated in the mobile app. MEAPs

the future must leverage analytics to suggest modifications or

are efficient development environment to convert existing

modify the app to increase user adoption and retention.

Mobile

application

development

and

maintenance

enterprise web applications into mobile apps. Most MEAPs do not collect metrics on adoption on retention or provide integrated user analytics. This is likely to change in the near

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ARICENT’S EXPERIENCE Aricent’s mobile enablement services include mobile app development, testing, advanced visualization, enterprise mobility enablement, location-based services, app deployment on cloud, and UX design for the Internet of Things. As part of its mobile enablement

-

services, Aricent advises clients to choose appropriate third party analytics solutions and metrics to measure, and integrates these solutions with the mobile app.

REFERENCES 1. http://www.emarketer.com/Article/Smartphone-Users-World wide-Will-Total-175-Billion-2014/ 1010536 2. http://info.localytics.com/blog/app-retention-improves 3. http://www.paymentssource.com/news/starbucks-mobile-app-now-used-in-14-percent-of-uspayments-3017341-1.html 4, https://blog.compete.com/2013/12/18/mobile-vs-desktop-traffic-top-retailers/ 5. http://www.flurry.com/bid/90743/App-Engagement-The-Matrix-Reloaded#.VA7QJU3lo2w 6. http://sequoiacapital.tumblr.com/post/77211282835/ four-numbers-that-explain-why-facebook -acquired


Aricent is the world’s #1 pure-play product engineering services firm. The company has 20-plus years experience co-creating ambitious products with the leading networking, telecom, software, semiconductor, Internet and industrial companies. The firm's 10,000-plus engineers focus exclusively on software-powered innovation for the connected world. frog, the global leader in innovation and design, based in San Francisco is part of Aricent. The company’s key investors are KKR & Co. and Sequoia Capital. info@aricent.com

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