6 chapters to understand your app users, better than your mom understands you.

App industry has completely revolutionised the way we live. From tracking sleep to recording expenses, from sms to video calling, games, education, information search, ecommerce … we have an app for everything. Google Play and Apple App store are two major players, accounting for over 98% (81+17) of total app downloads.

Our aim with this study was to analyse two things, first : the growth hacks and creative marketing processes that separates the men (top selling, multi million revenue generating apps) from the boys (remaining which don’t generate money, rather consume investment) and second : to analyse app innovations across categories. This second section includes case studies contrasting different apps in same categories and a correlation between marketing and innovativeness of an app.

The above analysis will help us figure out parameters needed to build a successful app and hope that our study will serve as a white paper for startups and individual app developers.

With the dawn of smartphone industry since 2008, the number of mobile applications in various stores has skyrocketed. Indie games like Flappy Birds became famous in just 28 days, so much so that the developer had to remove the app from the play store and iphones with this game installed are listed for sale at $1000 — $10000 on eBay. An iPad has over 80 bids. At its peak, Don Nguyen, the Vietnamese developer claimed a daily revenue of over $50000. But the cases of broke developers, unable to make a living are not rare. 51% of the apps don’t generate enough revenue to break even and 68% developers earned on $5000 with their most successful app. A study by app-promo.com found that only 11% of the apps have more than 500000 downloads and the top earners spend as much as 14% of total burn on marketing.

We were curious to find out why some apps stand out and others fail. In this project we have outlined the process of an app launch and sustenance. Right from the launch to first customer to the ‘aha moment’, each step is crucial to push users down the conversion funnel. Using our extensive survey, we found consumer behaviour on each step of the funnel. We analysed this data and drew conclusions. We also figured out ways to remove friction while moving down the funnel.

This study is divided into 5 small chapters.

Chapter 1 — What’s your ride ? An analysis of devices and ways users use to reach apps.

Chapter 2 — What are your favorite destinations ? Time spent by individuals on apps.

Chapter 3 — How did you discover those destinations ? App marketing channels.

Chapter4 — What do you look for in a new spot? User-App interface i.e. the app store : visual triggers that make a user download an app.

Chapter 5 — What makes you go back to that spot ? Triggers that retain a user.

Chapter 6 — Bonus — What should you, as an app developer, do to retain your users.

Chapter 1 — What’s Your Ride ?

Smartphones are now a necessity and sales are continuously growing. Because the quality and the experience of the app depends on the phone that it runs on, it important to consider this factor.

As we can see from the adjacent figure, penetration of smart- phones increasing globally. This creates room for new players to step in and acquire a large user base, which is newly exposed to the market.

In our survey, we asked respondents about the make of smartphones they use.

Samsung was the clear winner here, with 19% of total share (as per the survey data)

and was followed by Apple 11% and Xiaomi 8%. This means that the Android market is thriving as only 11% on the respondents are on iOs platform and remaining 89 % use Android. These facts are a little contradicting to average developer earnings on different platforms. Despite of a small share, Apple continues to provide more earnings to its developers. As much as 70% of the earnings come from iOs store compared to it’s 11% market share.

Another interesting observation is gender based brand preference, depicted in the following table :

Women tend to be biased towards using Samsung whereas men use the top three brands almost equally. This observation holds true from our experience as well, as we have not seen many women using Xiaomi phones. Perhaps Xiaomi doesn’t position itself as an easy to use and beautiful smartphone for women.

The following chart shows all brands and their usage. Micromax, an Indian player, also has a significant market share. Also Motorola, a brand which was almost dead has made a good comeback with it’s MotoG and MotoX.

App industry can be said to have started when Apple launched its first iPhone in 2008 along with the iOs App Store. And according to our results, it has boomed in past 3 years as almost 87% of the respondents bought their phone in past three years as much as 47 % bought it less than an year ago. This means that almost 50 % of the users are on new hardware which gives developers an opportunity to use sophisticated features like Acceleration tracking, GPS and high quality cameras with insignificant reduction in market size.

The following figure shows the age of phones as concluded by our survey.

The results are clear, smartphone industry is growing and with it grows the app industry. Apps are an instrument to perpetually monitise a device i.e. not only to act profitably for a company by buying the phone, you continue to drive commerce by participating in apps.

In this connected world, most apps allow users to share content across various social media websites. Not only this, apps also require a server to provide real time updates and information that might be relevant to us. For example push notifications about unread emails, friend requests on facebook, retweet count on twitter and so on. Apps also require to sync the functionality across various devices and websites. To achieve this a centralized server is required and an app needs to be in constant contact with this server. This opens ways to mobile internet, our next key metric.

An app developer should know how a user gets online so he can optimise network connection in order to reduce cost, both in terms of data usage and price. Our analysis found that most people do not use cellular data (3G). This leaves scope for cellular companies to target customers who prefer wifi only. Also this is a sign of comparatively costly wifi service and price sensitive consumers. Mode of getting online (depicted in the following Figure) shows similar trends for both men and women across the entire data set.

This analysis held true during the time of this study and for the demographics of the sample set. This one metric, we are sure, will vary greatly across globe.

Chapter 2 — What are your favorite destinations ?

In this chapter, we study how often a person reaches out to download new apps, the overall time she spends on her smartphone and what category of apps she uses the most (hence the title, “favorite destinations”).

Knowing how often a person visits the app store on her phone gives us an idea about the average curiosity of users.

From our data, we found that 19% of the people visit the app store everyday and 43.6% visit it 2–3 time a week.

8.3% of women participants said that they visit the app store everyday compared to 25% males with equivalent frequency. However, the next most frequent spot was grabbed by female respondents with 50% visiting the app store 2–3 times a week compared to 40% males in the same category.

We also found that as far as time spent on using apps is concerned, a uniform distribution was obtained with almost equal users in 1 hour, 2 hours, 4 hours and 5+ hours time frame. There is nothing much that can be concluded from the time being spent using apps by a user on her phone. However, this is an important feature to compare usage over time.

Apart from the app store visits and time spent on apps, another important factor is the type of app being used the most. A question in the survey asked what categories of apps 0ne uses. We found that communication apps took the number 1 spot, with 96% of respondents using apps like Whatsapp, FB Messenger etc. Email constituted 70.5% usage followed by entertainment and social media apps like Pinterest, Facebook etc. Some other noteworthy categories are Utilities and TODO lists (50%), trade and e-commerce (35%) and photo editing/ storage apps like instagram (38 %).

Pokemon Go wasn’t released at the time of this study. Had it been, then AR games would also have been visible in the top three categories.

Chapter 3 — How did you discover those destinations ?

What does an app agency do after developing an app ? They acquire users. These days small groups of individuals, often called startups, acquire users even before their apps are ready, but let’s concentrate on the traditional way. This chapter sums up the core ideas of how an app reaches a user.

When participants of the study were asked how do they get to know about an app (before they download it), here’s what they told us :

“Word of mouth”

“Word of mouth is more than marketing, it’s a way of doing business that will fundamentally change your company forever.”

As much as 65% of the participants had downloaded an app because a friend told them about it.

The second most active channel is social media, i.e. facebook and twitter profiles of the companies.

This channel accounts for 52% acquisitions. 38% users downloaded the app because they had a problem, i.e. organic search. This clearly indicates that if you have a problem solving app, you need to work hard to make it discoverable via the internet, social media and app stores. This in itself, SEO and ASO is a new, booming industry. It was interesting to see that online ads stood on the the next, i.e. 4 position, accounting for 24% reach.

But due to the nature of social media sites and the monetization strategies they follow, especially facebook, it’s almost impossible to acquire users on social media without paid advertising. Hence, it’d be safe to group social media and paid online advertising together and reorder the top channels as :

1. Word of mouth
2. Online ads / Social Media ads
3. Organic

Other channels are TV ads, print ads and offline campaigns (seminars, webinars etc.). Apart from this, we realized, after talking to one of our respondents, that featured listing is also an important channel. Featured Listing is when the app store lists an app on the front page, usually on the basis of its popularity and downloads, but this is possible only for mature apps which have taken the above mentioned steps properly. But still, this is an important channel.

Apart from this we found that about 4% of participants illegally download apps which is a good sign of security of intellectual property. App Stores have worked hard to prevent illegal downloads which helps the developers to deliver and get paid for quality content.

Chapter 4 — What do you look for in a new spot ?

Now a user has been affected by the marketing channel and has found the app’s page on the store. This is the time when conversion happens, the most crucial point. Information about what is happening inside user’s head at this point is most valuable to any marketer trying to drive download conversions. In this chapter, we study about the pointers that make a user download or skip an app, once they have reached the app’s page.

Again, like most other analysis, this category too had three clear winners.

On an average, a person gave importance of 4.16 out of 5 to the ratings an app had. This fact is also related to the conclusion that word of mouth is the best channel for marketing.

In this case, ratings signify word of mouth score. Higher the score is, higher the chances that you close your sale. Indian consumers are price sensitive and this is evident from our scores as well. Price of the app took the second place with an average score of 3.96. This might change for audience in other (international) demographics but our data shows that this holds true for Indian audience.

The third spot was taken by what we presumed to be an unimportant contender. App Description — score 3.65.

That means a lot of users read the description a developer puts up on the page. This is a good point to educate consumers and trigger conversions.

A participant pointed out another factor that we missed out, i.e. the app developer. If an app comes from a reputed agency like Disney or Pixar, there are more chances of a conversion.

Chapter 5 — What makes you go back to that spot ?

Okay, so now your lead converted and downloaded the app, what next ? Will she convert into a paying customer ? What should you do to retain her ? 80 % of the users open and evaluate the app immediately after downloading. And this time the male power user concept (Chapter 2), didn’t work very well. 87% females opened and evaluated the app immediately whereas only 78% males fell in this category. Another interesting observation was that 91 % users opened and evaluated a newly downloaded app on the same day before going to bed.

Evaluations are fine but how long do they take to delete the app ? Zero seconds. 76% of the respondents said that they delete the app immediately in case of poor user interface and only 20% keep it for another 2 days to verify the functionality. This trend is almost identical for both men and women across all ages.

If your app passes the above test your acquisition work is done. Congratulations, but one thing which is harder than acquisition is retention. How to make users come back to your app ?

Most platforms (iOs and Android mainly) have evolved with custom techniques for installed apps to notify users. These techniques are important to maintain integrity of the platform and ensure that the app makers don’t spam users. The main strategy, common across both platforms is push notifications.

A push notification is a small message, much like a text message that notifies user about happenings related to the app. For example, a flight booking app might notify you about the time of departure or delay of a flight you booked, so you can plan accordingly or an ecommerce app notifies you about sales and discounts.

This method, as per our research is the most effective method to drive in engagement. 70% of our respondents agreed that they open an app after receiving a relevant push notification. They key term here is “relevant”. This is a powerful weapon and might hurt you if not used properly.

As much a well timed notification makes a user open the app, a poor timed notification might as well make her delete the app, so this tool should be used with great caution and only when absolutely necessary.

Chapter 6 — Bonus — What should you, as an app developer, do to retain your users

App development is for sure a tricky field which requires interdisciplinary insights and capabilities. Much like art. But the basic rules are same. Here is a list of 9 things that will help you make your next app better.

1. Make your app great : So much so that you get addicted to it. Find a problem and solve it better than everyone else.
2. Start small : With rise in number of smartphones, it’s almost impossible to target all platforms. So fill your plate with only as much as you can eat. You can expand later if you succeed in a smaller segment.
3. Know your customers : If you build something that solves a problem, users might come, but you need to know which problem to solve. So research intensively before you start working on your next app.
4. The app stores are unfair and users are harsh. They don’t care about the efforts you put into your app, if it’s not good enough, they’ll kick you out and ask their friends to do the same.
5. Online ads work best when attached to social media context.
6. Word of mouth is the best form of marketing. To pioneer this, see point 1.
7. Search engine optimization is the second most important thing to increase conversions.
8. People care about the ratings of your app. Play ethical and don’t inflate your ratings. Take negative comments and reviews enthusiastically, if possible, thank the reviewer for pointing out a fault in your app and fix it.
9. Push notifications drive engagement, but use with caution.
10. BONUS BONUS : “If you are not embarrassed by the first version of your product, you’ve launched too late. “ Reid Hoffman

This was a learning experience for us all. Although parts of this study are location specific, but broadly applies to the entire industry.

Are you an entrepreneur ? did any of this held false for you ? Please let us know.