The Buzinga PodcastEp 8: 4 Ways To Double Your App’s Profits

• Hey guys, Logan Merrick here and you’re listening to episode 8 of The Buzinga Podcast:

• The number 1 resource for startups building and growing their business in the tech space.

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In this episode…

• Why cash flow is the secret weapon to winning investors’ hearts

• How to double your app profits by pulling on 1 of 4 levers:

1. downloads2. conversions3. Frequency of purchase4. Profit margins

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4 ways to double your app profits

Doubling any 1 of these 4 levers will double your profits:

1. Downloads2. Conversions3. Frequency of purchase4. Profit margins

Don’t try and double all 4 at once.

Pick 1 or 2 and watch the spill over happen!

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1. How to double your downloads

1. Focus on broad reach acquisition strategies that are highly targeted to your ideal app user.

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1. How to double your downloads

2. Know your target user back to front:

• Where they hang out online• What blogs and publications they follow• Who they are influenced by• What offers they respond to

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3. Use low cost lead magnet strategies, such as:

• Getting publicity• Building up your social following and email list• Creating valuable content and distributing it to the right people• Referral/incentive schemes to get people through the door

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1. How to double your downloads

4. Optimise your app for easy discovery on the app store.

See also: The Marketer’s Guide To Ranking #1 On The App Store

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1. How to double your downloads

2. How to double app conversions

• Getting people into your app is the easy part – now you’ve got to wine and dine them!

• Convert app downloads into app $$$

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2. How to double app conversions

• According to Apptentive’s research, only 40% of customers continue to use an app they download just 30 days ago.

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2. How to double app conversions

The good news:

Localytics’ research suggests that if you can encourage 3 app sessions in the first 3 days, only 29% of your users will churn.

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2. How to double app conversions

How can you encourage 3 app sessions in the first 3 days?

1. Nail your onboarding process

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2. How to double app conversions

How can you encourage 3 app sessions in the first 3 days?

2. Don’t skimp over UX and UI design.

• UX and UI are the first things a user notices once they’re in your app.

• If people can’t understand how to use your app in the first session, they WON’T be back.

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2. How to double app conversions

How can you encourage 3 app sessions in the first 3 days?

3. Use viral techniques, push notifications and special offers

• These tactics are at the intersection of marketing and product design

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3. How to double frequency of purchase

• What qualifies as an app purchase?

• This will depend on your monetisation model.

Examples of an app purchase:

• a click on an ad• A physical product that was bought at checkout• Someone who upgraded to a premium account

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3. How to double frequency of purchase

Tactics to increase frequency of purchase:

1. Make your purchase funnel shorter.

Optimise every screen to push more people to complete the last step in the desired action.

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3. How to double frequency of purchase

Tactics to increase frequency of purchase:

2. Optimise the timing and format of your ads to prompt purchase

• (app analytics and user behaviour will give you great insights on this)

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3. How to double frequency of purchase

Tactics to increase frequency of purchase:

3. Nurture your customers with timely, relevant content

• limited-time discounts, in-app credits, exclusive videos and articles

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4. How to double profit margins

To improve profit margins you can focus on

1) Reducing cost per action

2) Increasing customer lifetime value

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2 metrics you need to focus on

4. How to double profit margins

1. Cost per action (CPA)

• Definition: How much it costs to convert an app user into a paying customer.

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2 metrics you need to focus on

4. How to double profit margins

1. Cost per action (CPA)

• Here’s how you calculate it:

Total costs associated with converting users to make a purchase divided by total number of purchases, within a specific time period.

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2 metrics you need to focus on

4. How to double profit margins

2. Customer lifetime value (CLTV)

• Definition: The value a customer contributes to your business over their lifetime using your app.

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2 metrics you need to focus on

4. How to double profit margins

2. Customer lifetime value (CLTV)

CLTV isn’t as easy to calculate – it will depend on your app’s goals as well as a few other factors.

Check out the shownotes for some resources to help you calculate your CLTV.

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2 metrics you need to focus on

4. How to double profit margins

So....

How do you improve profit margins?Either by:

1. Reducing cost per action

or

1. Increase Customer liftime value

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2 metrics you need to focus on

4. How to double profit margins

1. How to reduce CPA:

Track and analyse your marketing efforts to prune your spending on acquiring and converting customers to purchase.

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How to reduce CPA

4. How to double profit margins

Setting up analytics for your marketing campaigns can show you:

•Where are new acquisitions coming from? Which channels?

•What is the return on investment for each campaign over all channels?

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How to reduce CPA

4. How to double profit margins

Bonus tip:

A/B test your campaigns and optimise accordingly.

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How to reduce CPA

4. How to double profit margins

2. How to increase CLTV:

Simply, get more value out of your existing app users!

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How to increase CLTV

4. How to double profit margins

• Increase their engagement within your app.

See also: 10 Addictive App Re-Engagement Strategies

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How to increase CLTV

4. How to double profit margins

•Offer different levels of purchase options to cater to every app user.

This may not be relevant to every app but there are 3 options for getting more $ value out of customers…

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How to increase CLTV

4. How to double profit margins

1. Upselling by prompting them to purchase a more expensive, premium product after they have indicated interest in your main product.

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How to increase CLTV

4. How to double profit margins

2. Downselling by offering a slightly cheaper, introductory product to users who you have identified as reluctant to convert.

For example, a one month discounted trial before committing to the yearly subscription.

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How to increase CLTV

4. How to double profit margins

3. Cross selling by looking at what users have purchased (or ads they’ve converted) and prompting them to purchase related or complementary products that they might find valuable.

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How to increase CLTV

The wrap up

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•Most startups will need to raise investment at some point in their lifetime.

•Show investors you’re a healthy horse, not a unicorn, by either:

1. Increasing downloads2. Increasing conversions3. Increasing frequency of purchase4. Increasing profit margins

And watch the money come in!

Further resources

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• Hope this has been engaging!

• If you want to learn more about how to impress investors then check out our blog, I’ve included 4 relevant blogs in the show notes:

1. What You Need To Get Done Before Pitching Your App To Investors

2. Template: 3-5 Year Financial Forecasting For App Startups

3. The Information Memorandum You Need To Hand Investors After Your Pitch

4. The App Developer’s Complete Investment Kit

The Buzinga PodcastEp 8: 4 ways to double your app’s profits

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• How you can listen to this podcast:

1. On iTunes – please subscribe!2. Through your favourite podcast app on your

smartphone3. Listen on our blog at buzinga.com.au/buzz with

shownotes for each episode.4. Watch with accompanying slides on Youtube – please

subscribe to our channel!5. Just read the slides on Slideshare

Thanks for listening!

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• See you on the next episode!