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Mobile User Acquisition – A Basic Pathway

Acquiring users in a cost-efficient way is critical for building a successful app business and apart from time, skills and money you need to have a well-thought strategy in place that will enable you to iterate fast and learn from your mistakes.

In a previous post, we have constructed the mobile user acquisition funnel and by measuring the conversions at each step we are now ready to experiment with different optimizations and identify the ones that yield the best results.

 

Many users will be dropping-out at every step of your funnel and although on the surface this behavior appears to be random, you should try to understand its key drivers and take actions to minimize the drop-off.

To put things in perspective, think about a relatively expensive item you’ve purchased in the last 3 months. Then ask yourself the following questions:

  1. Did you purchase that item because it was fulfilling one of your needs?
  2. Was the shop you bought it from trustful?

Chances are that you responded positively to both questions. The same questions are, unsurprisingly, being asked by every potential user before deciding whether to download your free app or not and you should center your initial optimization efforts around them.

Funnel – Top

Getting more and more people at the top of your mobile user acquisition funnel is definitely a good thing, provided that your funnel is not leaky and you get a significant proportion of regular users at the other end.

A good strategy would be to first soft-launch so that you make sure you have healthy conversions at each step and then ramp up your efforts with a proper launch, to increase the number of people that will find out your app exists.

 

Currently, performance-based mobile marketing (paid or free with cross-promotion) is considered by many the biggest contributor to the growth of a mobile user base and can be complemented with growth hacks, traditional marketing and app store SEO that will eventually provide an incremental value. For paid non-incentivized app installs, a strategy to minimize costs is to buy inventory from a variety of mobile ad networks (since CPI prices can increase substantially when a mobile ad network saturates) and avoid peak hours or special events where inflated CPI prices are observed.

Some users will find out about your app through organic ways such as browsing categories in the app store, through lists of featured apps or by actively searching for it. Localization can be quite powerful and you should consider launching in different countries and app stores. At the same time a significant volume of organic downloads can be generated by achieving a high rank position (to get perspective, for the #1 iTunes App Store rank you need from 400,000 to 1,000,000 daily installs plus positive reviews) or getting featured, however, as the app stores dynamics and rankings change all the time you should plan your launch strategy assuming neither will happen.

If you want to amplify all the above marketing efforts and decrease substantially the acquisition cost, make sure you bake some growth hacks in your app i.e. an invitation system where your happy users can effortlessly invite some of their friends while getting an extra value in return. The virality factor (also known as the k-factor) is important because if, for example, you manage to get 1 out of 10 users to convince a friend to try your app (k-factor = 0.1), this means that for every 1000 users you acquire through whatever acquisition channel, another 100 users will be acquired at no extra cost.

Finally, referrals coming from influential bloggers, app review sites or even press releases will lower substantially the trust barrier you have to overcome and depending on the size of their audience, it could have a significant impact on growing your user base.

Funnel – Middle

If things go well from your efforts at the top of the funnel, some potential users will have already visited your app store page.

Your primary goal now is to convince them that your app is the best to fulfill their particular need and aim to quickly build trust.

At your disposal is every piece of information that can be tweaked and you should experiment with different variations in order to optimize conversions:

  • Copy: You need a catchy title that communicates clearly the need your app is addressing. Think hard about the layout of your app description, the actual words and how to nail the “above the fold” text. Ridiculously good-looking screenshots are a strong indicator of credibility and can build trust.
  • Social Proof: The volume and quality of your ratings and reviews, have an important role when building trust. Make sure that you swiftly address significant complaints and be prepared to fight the classic “chicken-and-egg” situation at the very beginning.
  • Price: Different business models, will affect conversion rates differently throughout the entire acquisition funnel. Know your strengths and the weaknesses of the competition, and position your app business accordingly.
  • Meta: The actual size of your app, the frequency of updates, its maturity content and the number of permissions it requires, will affect the conversions albeit at a lessened extend.

Funnel – Bottom

The download has finished in a timely manner and if he didn’t forget to open the app, you got yourself a new user.

Designing a flawless new user experience (NUX) is critical in the “all-or-nothing” battle that takes place the first time a new user opens your app. Deep-linking to a custom landing page within the app, easy on-boarding and giving them a reason to come back again should accompany your product design skills that are now being tested.

He decides to close the app and if he opens it again a few times more, give yourself a pat on the back – you got a regular user!

Optimization

It’s important to develop a process of constant experimentation, as some optimizations might work better than others over time and as your user base grows.

A useful tool for optimization is the concept of user lifetime value (LTV), where you estimate the maximum revenue you will ever get from an average user, and this is then used as the maximum threshold on how much you are willing to spend for acquiring a user.

Once your funnel conversions are healthy, you should aim to identify a handful traffic sources that bring high-LTV users at a low acquisition cost, and double-down your resources on them.

 

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