Home - Marketing - Evaluate Mobile App Profitability: How Much Money Can You Earn With an App?

Evaluate Mobile App Profitability: How Much Money Can You Earn With an App?

Posted on October 23, 2017 in Marketing

How Much Money Can You Earn With an App

The development of a mobile application never stops, even after its publication on the stores. It must be constantly improved to retain users. To do this, it is essential to analyze their behavior. As Flurry shows, the retention rate of mobile apps varies by category:

Each application will have its specific KPIs, there are still some important measures for all mobile applications:

1. Active users

Encouraging a mobile user to download an application is easy. Retaining it will cost you more effort. To find out if users are returning to your app, check the number of active monthly users (MAU) and the number of active daily users (DAU).

It is normal for users to abandon the application after a certain period of use. Some will probably get tired of it, others will not need it anymore … That’s why it’s important to invest in mobile marketing to promote your app. Do not forget to regularly check the rate of new users. If it decreases, it is a sign that you need to improve or step up your marketing strategy.

2. Using the application

Do you know which screen of your application makes you lose the most customers? Knowing the flow of navigation within the application is the key to understanding the needs of its users. Check especially on which screens they stay the longest. If it is a game application, it may mean that the difficulty level is too high. For example, you can use heat maps to track the paths of visitors to your application.

3. The time of a session

How long does an average user stay in your application? Users who leave the application immediately after its first launch probably did not find what they were looking for. If it’s only one case, you do not have anything to worry about. However, if many users have the same behavior, the way you communicate around your app can probably be improved. Make sure there is no gap between the application and what you are saying.

4. Retention of mobile users

20% of mobile apps are used only once. Are you sure your app is not part of it? It is possible to measure the percentage of users returning after their first visit. You can also check how often they connect. This will allow you, for example, to set up a loyalty program to reward the most committed users.

5. Customer acquisition cost (CAC)

The cost of customer acquisition is an important piece of information that will allow you to determine how much you can invest in advertising. ACC is the sum of all costs invested in obtaining new clients divided by the number of new clients over the same period.

6. Average revenue per user (ARPU)

Attracting new users is good. Attracting new users who spend is better, because it makes profitable mobile applications. To calculate the ARPU, divide the total amount of your revenue (obtained with in-app purchases, advertising, subscriptions) by the number of active users over a period of time.

7. Customer value (CLV)

The value of customer life is nothing more than the expected profits over the “lifetime” of a customer. It is obtained by multiplying the ARPU by the average “lifetime” of a client (the length of time the person uses the application). This variable will serve you, for example, to identify how much you will be able to invest in the acquisition of new users.