Top Mobile App KPIs
When we first start a project, we spend a lot of time with our clients narrowing in on a lean app feature set that will make an app MVP successful. But what does success really look like? It’s just as important to define the app KPIs (key performance indicators) as it is the feature set during the product definition process — and to understand how exactly you’ll measure those success metrics.
The primary app KPIs you define depend on your business goals for the app and whether you are trying to reach users (get app installs), keep users (get app launches and usage), or create customers (get paying users).
Be forewarned, if you are caught on the hamster wheel chasing app downloads, step off for a moment and reconsider how your time and money are being invested. Downloads on their own don’t make for a sustainable mobile strategy that will drive your business. Engagement metrics like depth of visit, permissions granted, and session interval will paint a fuller picture of how your app is performing. That said, the lifecycle of an app customer starts with a download.
Top app KPIs for reaching users
The businesses we work with range in stages of development, from passionate startups with bold ideas to established household brand names, spanning a cross section of industries. Regardless of vertical, when working with clients aiming to build a user base, we start with these basic user acquisition KPIs:
While downloads is a KPI for virtually any app, it’s arguably one of the least important to long-term success. Still, it’s probably the first thing you’ll be looking at when you launch your app — and the easiest to measure.
How to measure it: Log into your app store account to see how many users have downloaded your app.
Active users is a much more important metric than downloads to show sustainable success for an app. This is typically defined as the number of users who open the app or perform some action over a period of time (e.g. a week or a month).
How to measure it: Defining the “active” part of active users evokes a lot of debate in the tech community, because the amount of usage that constitutes “active” largely depends on the nature of the app. For example, with a social media app, you would likely want to see users sharing content through the app every day (or at least weekly), whereas with a health insurance app, you might consider a single monthly login “active.” This is such an important metric that we’re working on a future blog post dedicated entirely to the topic. Subscribe to our blog to learn more.
Organic user growth rate
Businesses also should look at the organic growth of app installs — that is, the number of new downloads that don’t come directly from marketing campaigns. If the percentage of new organic users grows over time, it’s a good indication that the app has a strong viral coefficient, meaning the existing user base is sharing and recruiting new users.
How to measure it: Subtract the number of new users that came directly from marketing campaigns from the total number of new users and that will get you the number of organic new users. Divide that number by the total installed base to get the organic user growth rate.
Top app KPIs for keeping users
While continually striving to improve acquisition metrics, an equally important factor that drives the growth of an app’s user base is engagement. The more users (or active users) that are engaged, the more users you keep, and fewer new customers you need to acquire to meet growth targets. And if your viral coefficient (described above) is high, keeping users engaged will help you recruit more users. The specific app KPIs to track engagement will depend on the nature of the business, and how your mobile app maps to your business goals.
Answering this simple question will help you choose those app KPIs: What do we want the users to do? The actions we would want users to take in a retail app are different than those in a social or productivity app. With this in mind, here are a few examples of pertinent app success metrics for clients across different industries with varied business goals.
For retail apps, the ultimate business goal is typically to drive commerce through the app. So, app KPIs may include:
- # items added to shopping cart
- shopping cart abandonment rates
- # items added to a wish list
- # product likes
But for social apps, the aim is often about sharing content and growing the number of connections. Important app KPIs may include:
- # content uploads
- # likes
- # messages sent
- # friends added
- # shares on platform
- # shares on external sites/networks
Meanwhile, for enterprise apps like a sales enablement tool, where the aim is to help the sales team be more productive, you might want to track:
- # of products shown in a given time period
- # time spent viewing sales materials
- # leads captured into the company CRM
However, putting industry-specific metrics aside, a few general retention and engagement KPIs can be applied to virtually any app to help measure if the app’s core features are strong enough to truly captivate users. These include:
Session time helps quantify a user’s connection with an app. Have they accidentally opened it, or did they spend six minutes performing key tasks? Measuring only session count will leave out this important detail, but taking the average amount of time that users spend in a single session paints a fuller picture.
How to measure it: The average length of time a user spends in an app within a single session.
Recognizing the typical time lapse between sessions shows you how frequently users feel the need to use an app, and allows you to optimize alerts or campaigns to bring users back into the app.
How to measure it: Measure the average amount of time that lapses between two distinct sessions for a single user.
In its simplest form, churn helps us understand product abandonment. Calculations range from rudimentary (below) to incredibly complex. Churn is a crucial app KPI when you consider growth targets because any lost customers must be replaced by acquiring new users to hit those growth targets.
How to measure it: Take the total number of customers at the beginning of a given time period divided by the number of uninstalls in that same time period.
Depth of visit
Analyzing the depth of a user’s visit can tell us if users are generally hooked on a single feature, or if they regularly explore myriad screens within an app. This metric is especially useful in determining where to invest (or possibly not invest) in future versions of the app to maximize business objectives.
How to measure it: Find the number of screens viewed in a single session.
The number of permissions a user grants tells us a lot about how engaged they are with the app’s various features. Do users find enough value in your app to enable location services (access to their GPS location)? How about access to their contacts, calendars, picture library, or the camera? What about agreeing to receive push notifications? An app that has “earned” these permissions from users will have a greater degree of engagement and retention.
How to measure it: Find the quantity and type of permissions that users grant to your app.
Top app KPIs for creating (paying) customers
Time to talk monetization — finally, the stuff that’ll keep your lights on! If users are willing to download the app and find enough value to keep using it, the next step is to measure factors that affect your bottom line. While these app KPIs will vary by application, the following are industry-agnostic and apply to most of our clients that ultimately aim to generate revenue with their apps.
Paid conversion rate
Of all your users, what proportion are paying for your product/service? The conversion rate from free to paying users will be a crucial app KPI if your goal is to drive revenue with your app — especially if you have a freemium business model.
How to measure it: Take your total number of app users and divide it by the number of users who are paying customers.
Average revenue per user (ARPU)
ARPU helps us comprehend the total sales across all users, not just paying customers. ARPPU (Average Revenue Per Paying User) limits the denominator to only paying customers. Note that this is a snapshot over a given time period — usually a month or a year. For a more forward-looking figure, see below for LTV.
How to measure it: It’s the total revenue generated by the app divided by the total number of users, in a given time period.
Lifetime value (LTV)
LTV is the average total revenue a customer will generate during their lifetime of using the app. It’s an important number for marketers, who use it to determine how much they can/should be spending to acquire new customers (see CAC below).
How to measure it: Depending upon the business model, calculating LTV can be complex, especially if you have several types of revenue. Simplified, LTV is the sum of all different revenue sources over a period of time divided by the number of customers and multiplied by the estimated (or calculated) lifetime of a customer. For example, if your average customer pays you $10 in revenue per month and is a customer for two years (24 months), your customer LTV is $240.
Customer acquisition cost (CAC)
CAC measures the amount it costs to acquire a new customer, and it is especially important when running a marketing campaign. Eventually, measuring CAC against LTV will help you determine which customers to pursue in the long run, and how to spend most efficiently to bring them in.
How to measure it: Take the total acquisition costs (marketing, advertising, sales) divided by the number of total new (paying) customers, in a given time period.
Next time: App measurement tools
Now that we’ve offered up a list of the app KPIs we think are most important, the next step is to provide an overview of the best app analytics tools to measure these KPIs.