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When ordering the development of applications inexpensively , you should immediately think about evaluating the effectiveness. For some, it is measured by the number of downloads, for others, the number of users is important. Some are betting on increasing brand awareness. For the rest, conversion and sales performance using the application are more important.
There are quite a few metrics to evaluate application performance. What? An overview of metrics prepared by Smart Fintech experts will help you deal with this.
Mobile app performance metrics related to users
User acquisition is one of the key tasks pursued by developers and customers of mobile applications. Naturally, when evaluating performance, you should focus on user-related metrics. And there are many. Let’s look at a few of the main ones.
Number of installations
Many attach great importance to this indicator. Yes, knowing the number of installs is useful. But this metric does not give a complete picture of success. After all, users immediately after installation can delete the application, or install it “for show” and not use it. The number of installs should be considered as a kind of basis that is necessary for calculating other indicators.
Daily Active Users (DAU)
DAU (Daily Active Users) – users interacting with the application daily (daily active). Agree, if a person regularly uses the program, spending his time on it, then we can talk about the benefits, product quality, etc. For business applications, this metric is usually considered as a measure of the success of a software product.
No formulas are required to calculate DAU – this is the number of UNIQUE users per day. Uniqueness is determined by ID or login. You can get this figure using analytics systems (for example, Google Analytics or AppMetrica).
Where DAU is, there is WAU and MAU
WAU and MAU show the number of weekly and monthly active users, respectively. By manipulating these three indicators, you can extract useful information for your business. For example, by dividing DAU by MAU, you can calculate the engagement rate for the week (it is also called “stickiness” or loyalty). This is an important indicator. The larger it is, the higher the involvement and regularity of using the application.
DAU, WAU and MAU are important indicators when attracting partners and investors. A lot of people look at them first.
PCU and ACU for efficient decision making
PCU (Peak Concurrent User) – the largest number of users (“peak”) who are in the application at the same time. As a rule, peaks fall on the same periods of time. ACU (Average Concurrent User) shows the average number of users online.
Such information will be useful, for example, when managing ads in the application. These metrics help you manage your impressions by focusing on the hours of most activity.
LTV, CPA and RPU
LTV (lifetime value or lifetime value). The mobile application performance metric shows how much you can earn from an average user for the entire time that he is a client. It is calculated by multiplying the average cost per conversion, the average number of conversions during the period while the client used the application, and the average period of conversion actions.
The metric is very popular and common among mobile app owners. It is advisable to use it in conjunction with another effective indicator – CPA. CPA (cost per acquisition or cost per user acquisition) shows the effectiveness of advertising campaigns and user acquisition campaigns.
The greater the difference between LTV and CPA (in favor of LTV), the more effective the application is, and the more the business earns per user.
Another popular metric that helps solve the problem of how to measure the effectiveness of an application is ARPU (Average Revenue Per User). This is the average revenue received from one user. Calculated as earnings from the application for a certain period, divided by the number of installations (users) for this period. ARPU is also called current LTV.
IMPORTANT. LTV and ARPU are still average metrics. It should be taken into account that according to statistics, half of the revenue from the application (depending on the specifics) is brought by only 0.15% of users. And if you just rely on these indicators, the data may be far from ideal, they turn out to be “smeared”. Therefore, if you operate on LTV and ARPU, when analyzing them, pay attention to download and uninstall rates, user session length, traffic, and other indicators. Those. analysis must be comprehensive.
ARPPU is used to understand how much income one paying user brings on average. It is calculated by analogy with ARPU: earnings from the application for a certain period are divided by the number of PAYING users.
Financial (monetization) metrics of the mobile application
Some of the performance indicators discussed above are also about money. But still they are more “about users”. Financial performance metrics for mobile applications are the most important group of indicators in terms of profit forecasting.
Conversion
With regard to mobile applications, it may make sense to consider 2 types of conversions.
The first is the conversion from view to install (install rate). It is calculated as the ratio of the number of users who downloaded the application from the store to the number of those who viewed it but did not install it.
Transaction conversion. It is calculated as the percentage of application launches (sessions) that ended with a target action (buying a product, ordering a service, registering in a promoted service, and so on).
Pay Share
The growth of this indicator by at least 1% is considered a good achievement. This metric shows the percentage of users who made a payment in a certain period of time, out of the total number of users. A drop in Paying Share may be a signal that there are too many paid options in the application, and owners should think about reducing their number, or holding some kind of promotion, discount campaign, etc.
ROI
ROI (Return on Investment) is a mobile application performance metric that shows the degree of return on investments (investments). If the ROI is less than or equal to 100%, things are bad: the investment did not pay off, or it paid off (at 100%), but there is no profit.
Calculated according to the formula:
ROI = ((Income – Cost) / Investment Amount) x 100%.
This indicator is recommended to be calculated regularly, getting ROI 7, 14, 30, 60, 90, etc. (data for 7, 14, 30, 60, 90 days, respectively).
If you plan to attract investors, ROI will be asked first.
Revenue
Revenue is considered as a separate metric, as well as a comprehensive report consisting of several. In the first case, this indicator refers to the net income received from the application, minus commissions and other payments in favor of stores and other sites through which the program is distributed.
The popular AppMetrica service and some of its analogues have a Revenue report group. It allows you to analyze total revenue, qualified revenue, number of purchases: total and per user, ARPU.
How to calculate the effectiveness of mobile applications: manually or automatically?
Almost no one considers the metrics discussed above manually. The functionality for this is in specialized tools. Among them are AppMetrica, Google Analytics, Flurry, AppAnnie, AppsFlyer. Smart Fintech specialists will help you with the selection and implementation of tools for analytics and evaluating the effectiveness of your software product. We will make sure that the development of an application, the price of which we have is very attractive, does not end at the stage of transfer to the customer. The company is ready to take on the support and development of the project throughout its entire life cycle.
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