App Marketing Metrics for Pirates: Growth Hacking the Purchase Funnel

Alex Andrade-Walz
Jan 19, 2017 · 11 min read
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Source: giphy.com

From acquiring downloads to inspiring loyalty, app marketing is one big game of getting as many customers as possible into and through your funnel.

Pioneered by entrepreneur and angel investor Dave McClure, the Startup Metrics for Pirates form the foundation of how tech companies visualize the marketing funnel.

Taking the first letter of each metric, AARRR, gives the iconic metric its namesake and serves as a powerful mnemonic for recalling the five metrics involved: and .

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cquisition, ctivation, etention, eferral, and evenue: The Five App Marketing Metrics for Pirates

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Aptly named for the diminishing number of customers in each metric tier, this funnel illustrates your marketing’s ability to convert customers and reveals any bottlenecks in the customer journey where conversion is disproportionately low.

In this post, .

Enjoy!

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Acquisition

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The first ‘A’ in AARRR is . In the world of mobile app marketing, this metric is often divided into Awareness (the set of activities that drive people to discover your app) and Acquisition (the set of activities that motivate people to download your app).

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Source: Imgur

App acquisition metrics

Traditionally when we think acquisition, we think immediately of , literally representing the number of people who have acquired your app, and , representing the number of people who have not only downloaded but installed your app.

While the two metrics are often used interchangeably, the latter requires a double conversion and often sits at a mere 30–60% of the total download volume to account for customers who download your app but forget, or decide not, to download it.

While the awareness side of the picture can be challenging to measure, there are a few meaningful metrics to consider:

App acquisition drivers

When it comes to driving downloads and brand awareness, app publishers have four primary tools:

  • , the process of increasing the visibility of your app store product page by boosting your app’s rank and search relevancy through the strategic use of keywords and product page details. Responsible for driving 68% of all app downloads, ASO is an essential part of any organic acquisition campaign and comes down to a 10-step process.
  • , an assurance of quality left by current or former customers on your app store product page. Positive ratings and reviews serve as social proof for your app, such that product page conversion rates can be directly tied to star ratings, with 96% of customers reporting a willingness to consider a 4-star app but only 50% willing to consider a 3-star app.
  • , the process of acquiring customers through app install ads. Check out this great post for a high-level breakdown of common mobile ad formats.
  • , the process of driving customers from the web or physical world to your app. This broad metric includes social media, public relations, and content marketing, each of which we’ve covered in our Guide to App Marketing Channels in 2016.
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Activation

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Once a customer has downloaded your app, the next step is to win their usage. The tier introduces a new conversion hurdle: Getting customers to try your app.

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Source: Tumblr

App activation metrics

The most common way to measure activation is through . If your app requires customers to register before they can use your app, tracking the sheer amount of registrations as a proportion to downloads is an indicator of how well your app motivates activation.

If your app does not require registration, other common metrics include:

  • , how much time customers spend in your app, where a longer session means greater activation.
  • , how many different pages (screens) of your app a customer launches in a single session. Again, a greater screens per session indicates greater activation.
  • , measuring how many customers continue to use your app 24 hours after installation. This metric lies between the Activation and Retention tiers and calculates the percentage of customers who enjoyed their first session of your app enough to use it again.

App activation drivers

You can grow the above metrics, and Activation by proxy, by removing the barriers to registration with:

  • , your ability to introduce customers to your app and its mechanics. Effective on-boarding makes customers feel welcome and reduces the learning curve associated with navigating your app, thereby improving the customer experience and hooking the customer from their first session.
  • , the simplification of the registration process to remove any barriers to entry in the minds of your customers. One-step registration does away with complication sign-up forms and asks, instead, for only the bare essentials — often an email address or Facebook log-in.
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Retention

The third tier of the mobile customer purchase funnel, refers to your ability to keep customers coming back and to inspire their loyalty.

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Source: Disney

App retention metrics

Retention is typically measured one of three ways:

  • , measuring the percentage of customers who continue to use your app n days after installation. Retention is usually monitored on a monthly basis, with a 40% industry average for 30-day retention.
  • , calculating the number of customers who actively use your app. When tracked over time, MAUs speak to your ability to convert and inspire loyalty, such that an increased ratio of MAUs to Total Downloads means greater retention.
  • , the number of times the average active customer launches your app in a given timeframe (typically one week). A greater session frequency means greater engagement and conversion.

App retention drivers

Retention marketers have four primary tools:

  • , the process of messaging and engaging customers before the customer has any need to seek customer service. Proactive communication allows publishers to spark a conversation with their customers and discover potential issues that typically go unvocalized. As a result, those who are proactively interacted with in-app are four times likelier to continue to use your app three months later.
  • , gamified or rewards-based systems that incentive retention by rewarding customers (with in-app achievements, virtual currency, premium features, or discounts) for regularly using your app.
  • , short messages that can be sent to anyone who has your app installed. Once delivered, push notifications wake up the recipient’s device and display regardless of whether or not they are currently in your app, making them a great way to keep your app top-of-mind with customers (that is, if they are well-timed and intelligently targeted).
  • , paid advertisements targeted only to those who both have installed your app and not recently opened it. Just like a smart push notification, re-engagement ads can draw customers back to your app to boost retention.
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Referral

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In the previous two tiers of the mobile customer purchase funnel, consumers like your app enough to give it their continued use. To make it to this next tier, , customers have to not only like your app, but love it — enough to rave about it to their friends and family.

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Source: Pinterest

App referral metrics

Measuring referrals is traditionally a little more challenging than our other metrics, but there are a few good tools and alternatives:

  • , recommendations to download your app made by customers. Beyond the two one-to-many referral types below, referral metrics can be challenging to track. However, third-party attribution tools like Branch Metrics and Alau exist to make the work a little easier.
  • , an assessment of customer satisfaction posted directly to your app store product page. As we saw in the first tier, positive ratings and reviews serve as referrals and social proof to anyone considering downloading your app to the extent that an increase of just one star in your average rating, from 3 to 4, can almost double your visits-to-downloads conversion rate.
  • , measuring how often your app is mentioned online or over a social network, which can be tracked with a social listening tool.

App referral drivers

Driving referrals comes down to collaboration between marketing and product to build share-ability into the app itself.

Four such builds are:

  • , in-app messages encouraging customers to leave an app store rating or review. Well-timed and intelligently targeted prompts increase both review quantity and sentiment.
  • , built-in share buttons or email referral links that make sharing quick and effortless.
  • , another way to remove the barriers to sharing by asking permission to connect your app with customers’ contact list or social network contacts. Once integrated, customers can go through their contact lists within your app and mass-share your content.
  • , a system designed to reward customers for referring friends. Often associated with gamification, incentivized sharing may offer customers in-app currency or premium features in exchange for a share.
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Revenue

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The final frontier of the purchase funnel and the end goal of many app marketing campaigns, growing profitable customers requires perfecting each of the above tiers — growing engagement, building loyalty, and earning Customer Love.

True to its position in the funnel, is our narrowest tier, with only 2.2% of people likely to convert to paying customers if given a freemium option.

App revenue can take many forms, depending on the chosen business model. In paid apps or apps with a subscription or freemium model, revenue takes the form of a direct transaction.

z[]\In free apps with an ad-based model, there is no transaction between you and the customer, and growing revenue becomes a matter of growing ad impressions through growing app usages and loyalty.

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App revenue metrics

Beyond the straightforward , there are several meaningful ways to categorize and analyze your app’s profitability:

  • , a measure of total app revenue over a designated time period averaged over monthly active users (MAUs) for that time period.
  • , a predictive measure of the revenue a customer will generate over their entire relationship with your app. Download our free guide for tips on growing and measuring this often-enigmatic metric.
  • , app revenue generated from purchases of a paid app.
  • , app revenue generated from monthly fees for subscription-based apps.
  • , app revenue generated from transactions (of either physical or virtual goods) made within the app.
  • , app revenue generated by advertisements shown in your app.

App revenue drivers

We’ve found the most success driving revenue with these four strategies:

  • , the set of activities that drive awareness for a particular product, service, or feature.
  • , purchasable premium features and virtual goods that enhance, or add to, the app experience.
  • , the use of consumer insights to personalize a customer’s experience and promote only those products or services relevant to the customer’s wants or needs.
  • , the process of continuous improvement on your app to regularly roll out new, rich content updates. Fresh content keeps customers coming back, driving both sales and ad revenue.

X Marks the Spot

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Together, these five growth metrics provide us with a map to app success:

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Visualizing your marketing activities in such a way as this purchase funnel allows you to keep an eye on your most important conversions, map marketing activities to objectives, and identify any bottlenecks where conversion is abnormally low from one tier to the next. And, if you do come across any such bottlenecks, we’ve curated a list of tier-specific resources to help widen the funnel at each stage:

I hope this post, and the above resources, help you find success and optimize your app marketing.

As always, I’d love to hear your thoughts and answer any questions in the comments section below!

Originally published at Apptentive.

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