COO Pinnatta www.pinnatta.com

Growth hacking Insights Mobile apps

Theodore MoulosGuest Speaker

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Growth Hacker Principles in mobile apps

✤ Principle No. 1: Grow and to do that you need to fight. Mobile app arena is a difficult one. Be ready

✤ Principle No. 2: Be a Quality Product and focus on promoting this single, user-pleasing product. Validate your product/market fit before starting

✤ Principle No. 3: Employ the Scientific Method and discover the truth. It begins with a question; relies on systematic observation and research to construct a reasonable hypothesis; invents tests and experiments to collect practical data relative to the hypothesis; and analyzes the collected data to draw a meaningful conclusion.

✤ Principle No. 4: Focus on Customers. Make stuff people want. ✤ Principle No. 5: Be Resilient. Almost by definition, growth hacking

requires small failures on the road to success. Remember, you will be experimenting with everything from the items you sell to how you promote those products. Not every hypothesis will be spot on.

Couple of advices to start …

✤ Easy as 1, 2, 3 - Apps without an intuitive design and interface are destined to fail. ✤ Avoid buggy technology - Only 16 percent of users said they would give an app more

than two attempts if it failed to work seamlessly the first time ✤ Gain Trust - Consumer concerns over privacy remain high, with 92 percent of users

worried about their privacy online. ✤ Checking out - 2 out of 3 of smartphone users have abandoned a transaction due to

obstacles during check out. ✤ Fishing for compliments It’s OK to ask users for ratings, but be cognizant of burnout.

Honest and consistent feedback needs to be earned. By providing valuable and meaningful content and experiences, you build a loyal user base willing to take the time to give ratings, performance feedback, or reviews. Consider ways to incentivize feedback.

How to give your app the best possible chance to not just survive but thrive.

You have an app? What to avoid….

Hard working and will spend time on my app

Three assumptions to avoid and that will save you a lot of time.

Smart enough to understand my app

Interested and keen to use my app

My users are:

Growth Model

Churn Resurrection (TOP DIFFICULT)

AcquisitionNew users

Monthly Active Users

(MAU)

Dormant Users (DU)

Churn

Activation

Mobile growth (basics)Paid Acquisition, Funnels, conversions and more…

Paid user acquisition (Two misconceptions)

✤ Misconception 1: Great products don’t require paid user acquisition because they’re viral by nature. When the cost per acquisition of a user is less than that user’s expected LTV buying users when a product is viral speeds up user base growth and delivers revenue

✤ Misconception 2: The money spent on paid user acquisition would always be put to better use funding additional product development. It represents an admission that the organisation believes it can extract more revenues from an improved product at some point in the future than it can from the current product today.

It’s a … funnel story…

Active Users: 300k (290k)

PAID: 40K ORGANIC: 60K

Downloads: 100k

Registrations:"90k

?% Not

even first

experience

50k250k

New users Returning users

?% churn

Senders: 200k

50k150k

?% Not sending What do they do?

?%?%

D1: 30% D7: 16% D30: 7%

?% Drop

offs

Pinnatta Sent: 320k

300k 20k

?/active

?/sender

Convert: ?k

Replies: 80k

60k 20k

Action to be takenQuestion to be answeredImportant Figure

Pinnatta"Users: 300K

Non-Pinnatta"Users: 20K

Acquisition

Retention /Usage

?/active

Basic Funnel (Growth Model)

Direct Through transactionsemail FB SMS email FB SMS

Consumable

Non-Consumable

Delivered

Landed (CTA)

Clicked

PlayedVisited Store

Conversion Funnel aka Invitations’ efficiency

Notification Channel

Reception Channel

Landed

Action AAction B

Downloaded

Analytics & MetricsObsession with metrics is the only way forward

134 Metrics

1DataAnalyst

1DataEngineer

18Dimensions

20% ofCapacity

5 Apps

Basic Metrics

✤ User engagement ✤ User retention & User churn ✤ User flow ✤ Conversion rates ✤ ARPU (average revenue per user) ✤ Customer lifetime value (CLTV) ✤ New users vs. Active users ✤ Number of downloads and uninstalls

Metrics and Metric Categories

✤ Acquisition: The category covers all the metrics used to acquire users. Here are the most critical ones: ✤ Downloads ✤ New users ✤ Active Users

✤ Engagement: This category covers metrics that will tell you what percentage of users stick with your app after downloading ✤ Retention (and churn rate) ✤ Drop off rates ✤ Session length

✤ Outcomes: Outcomes are the areas where users convert in your app. ✤ In-app purchases ✤ App purchases ✤ Goal conversions (sign ups, view a certain screen, etc.) ✤ App monetization

Metrics for metrics?

✤ Mobile apps are able to produce a treasure of data for app developers to see how they are performing. However, there is a crucial condition: the owner of the app needs to understand how to use this data to convert it to actionable information.

✤ For most developers, it isn’t necessary to measure all these metrics, every app is different and might have a different ideal set of performance metrics. However, it is important to keep tracking your app’s performance over time and compare new versions with old versions to see if your technical improvement efforts are paying off.

✤ Demographics, interests and intents inferred by machine learning algorithms can be used to acquire the right users: those that will increase your ARPU and decrease your CPI. This is what we call actionable information.

How to present numbers

✤ In a negative way! to demonstrate corrective actions! ✤ Multi-dimensional analysis

✤ Device: iphone, ipad, phone, table, phablet etc ✤ OS: iOS / Android ✤ Time Series: Daily, Weekly, Monthly, Quarterly, yearly ✤ Customer monetization: Free / Paid ✤ Customer segmantation: ages / genders / Countries ✤ Customer type: New, Returning ✤ Customer acquisition: Paid / Organic

✤ Comparing with last month and same period last year ✤ Growth to be presented as percentages not absolute numbers ✤ In a consistent way ✤ Separating behaviour of new users and returning users

The 4-5-4 Rule

A very simple but super important metric to measure app engagement is taking the 4-5-4 test. An app is most likely to be a monetary success if it passes the 4-5-4 test which follows that if a user can realistically be expected to use the app

A. at least 4 times a day, B. for at least 5 minutes (per use), and C. keeps it for at least 4 months.

Standard “correct” values

✤ Registrations ✤ 100 K + is a good start to raise $1M (but there is no

golden number!) ✤ Monthly Active users

✤ MAU/Reg = 20%+ is good, 50% is amazing ✤ Daily Active users

✤ DAU/MAU = 20%+ is good, 50% is amazing ✤ Days to acquire 10K, 100K or 1M users

✤ 7-day, 30-day, 6-month retention (hit engagement before acquisition if you have to make a choice)

If you must do metrics at this early stage to raise funds(and given your stage assuming you are not monetizing):

The ideal metrics?

✤ The only metrics relevant to an app developer are its own, within the context of its broader marketing and content development strategy.

✤ Broad industry benchmarks aren't helpful.

Rather than looking for metrics, check the user experience within your team or usability lab or focus group.

Metrics will just reflect the same.

Uninstalls (How to measure them)

✤ There are apps with more than 160% uninstall rate - every 10 times the app is installed, users uninstall it 16 times.

✤ Uninstallation can be tracked from push notification feedbacks, that is, if an application enables push and if it’s uninstalled, then you can count it.

This is by far the most important metric you need to analyze. If possible, try to track the referrers for your application. Under Android, campaign tracking is straightforward, however Apple doesn’t allow third parties to track referrals (but there are different methods for this such as IP matching).

Downloads

Downloads to registrations: > 50% is ok, >70% is amazing

User Retention

Retention simply tells how many users come back to open your app just because they embraced it. Just like repeating customers, retained users are one of the most critical metrics in application engagement. With retention metric you get an insight of percentage of users coming back to use your app again.

Churn Rate < 35% ok, <25 % is amazing

User Retention: Yes, But Which One?

✤ Full retention - which proportion of users come back every single day to the app until Day +N.

✤ Classic retention - which proportion of users come back to the app on Day+N.

✤ Rolling retention - which proportion of users come back to the app on Day+N or any day after that. (Used by Flurry)

✤ Return retention - which proportion of users come back to the app at least once within N days.

✤ Bracket-dependent return retention - In this case, we define brackets between typical retention marks such as Day 1/3/7/28/60 etc

Store Comments and Ratings

There are several online services providing this information by scraping application store web. Honest opinions from end user should be taken seriously by the product manager and considered as an improvement area. "Find the correct moment to ask for a review. Use an SDK to analyse the sentiments per action

Opens

Statistics show that one fourth (1 of 4 aka 25%) of all apps are opened only once. A small frustration, an issue with login, a typo in help screen will force user press home key, never returning back to that app again. Fun stops. Thanks to various tools, you can see how many times your app is launched, and take necessary precautions in case average number of opens is alarming.

Time Spent (Session Length)

This metric can easily be misleading, since time spent in a simple utility (e.g weather app), a casual game or a video streaming app can vary greatly. Therefore do not simply compare your “time spent” data with other apps, but rather benefit from custom events (e.g number of channels watched in a session) to correlate both data.

Conversions via invitations

✤ What should be my conversion rate?

✤ Depends on the type of your app, competitive landscape and the value provided by your app to the end user.

Anything above 15-20% would be considered a good conversion rate.

Tools / Applications

Tools / Applications

Viral LoopsLack of vitality is the symptom not the root cause

Virality

Successful viral products don’t have viral marketing bolted-on once the product has been released. Instead it’s designed into the product from the very beginning as part of the fundamental architecture of the experience. Use your obscurity period to fix this at last. "Virality is so important that you should start from it. "We have product X how do we virally spread it? -> We have viral loop X what’s the right product to put into it. Sounds like product / market fit right? Well yes… "To define the viral loop you can think of it as the steps a user goes through between entering the app to inviting the next set of new users

k-factor #1

✤ K-factor is the average number of additional users each user introduces to the app.

✤ This is very difficult to calculate for apps because mobile platforms drop almost all indicators of source prior to reaching the store.

✤ But I think estimating k-factor is important because virality increases the ROI of paid acquisition. Actually, having only paid acquisition is something you can’t afford

k-factor #2

✤ Virality is really the measure of the spread of information and not the adoption rate or new subscribers that you get for your product. Again, like views, that's a byproduct of being viral.

✤ k-factor measures adoption rate or conversion rate. It does not measure "virality" or how viral something is.

✤ K-factor is simply the number of invites multiplied by the number of new users. k-factor one (1) is amazing above that is extraordinary

Customer Life Time Value (CLTV)

✤ CLTV is a measure of a user’s value over time. You can choose to define user LTV in a number of ways, but it must be a quantifiable metric that correlates to specific actions within your app. In an app that generates user-driven revenue, user LTV will likely be defined in dollars as the amount of money a user has spent in your app over time. "

✤ If your app isn’t monetized through user-driven revenue, there are alternative ways to track user LTV eg. engagement, retention

Why checking CLTV is vital?

✤ Investors will check it also ✤ Need to compare it with cost of acquisition ✤ Need to build a viable business model

Virality and LTV

✤ Virality – specifically, k-factor – changes the dynamic of the relationship between LTV and CPI (average is 0,70-1,20) because virality represents cost-free growth, it reduces the effective price paid for each user in a marketing campaign. Taking the opposite approach – using k-factor to augment LTV – is inappropriate because LTV is specifically interpreted to describe the revenue contributions made by a single user. "

✤ Considering k-factor as an element which reduces a product’s CPI has the added benefit of preventing a line of thought from taking root wherein virality and paid user acquisition are considered mutually exclusive.

Satisfaction vs. virality

If you find yourself mostly thinking about balancing satisfaction versus virality,

you’re probably doing it wrong.

(Average purchase value) × (Number of repeat purchases) × (Average retention time)

How to calculate CLTV

There are three basic pieces of information you need to know to calculate CLV: 1. What is the average value of a purchase? 2. How many repeat purchases do you expect to make? 3. How long do you expect your customer to remain your

customer?

How to really calculate CLTV

The benefit of the equation above is that it’ll get you thinking about the right things, asking good questions about what your customers are worth, and what you should be willing to pay to acquire new customers. However, it also paints an incomplete picture, because it only addresses the revenue side of the equation and doesn’t take into account: ✤ The profitability of each sale (an often ignored factor) ✤ The likelihood of your customer continuing to be your customer (also

known as the retention rate) ✤ The discount rate or the expected rate of return on an investment (a

product of the “time value of money” and other risk factors, i.e. $10 earned today is worth more than $10 earned three years in the future)

✤ The relationship between Customer Lifetime Value and Customer Referral Value

TipsSmall tips to keep in mind

Sean Ellis' Tips for Accelerated Growth

✤ Be API-friendly: APIs allow different websites and platforms to "talk" to each other for example, Yelp uses MapQuest to give you directions to your local restaurant.

✤ Hitch Your Wagon to a Star: Many contemporary startups attains massive growth by being a part of a larger marketplace such as Facebook, Salesforce or Google Apps.

✤ Build in Conversion and Engagement Tools: Your app or company won't grow if it's not habit forming. So build in referral bonuses (like Dropbox) or similar

✤ Leverage Users: "Double-sided referrals" in which a current customer gives a reward to a new customer and receives one herself are a prime way of leveraging users to create growth.

✤ Create Spreadable Experiences: The car service Uber quickly gained traction in its major markets because it was a much easier way to get around than hailing or even calling a taxi.

✤ Obsessive Optimisation: Nothing that remains untested and unobserved can create massive growth, or so say the Growth Hackers. So if you'd like to become one, you'll need to know and love metrics. Pick one metric at a time and come up with ways of optimising it.

More features?

“Very few features touch non-users so working on features in the product won’t

help the funnel.”

Gustaf Alströmer from airbnb

Focus!

“Some things are just really hard to do, like reactivating dormant users or making your

product awesome by changing a button color. By contrast, some things are much

easier, so focus on those”Jean-Denis Greze from Dropbox

Enough said?Not exactly

More on the subject

✤ Paid Acquisitions ✤ How to decide where to spend your money ✤ How you measure them ✤ What should be the ROMI ✤ What is the average Cost of acquisition

✤ How to become rich via my app ✤ Monetization stategies & options

✤ Affiliated ads ✤ Affiliated gifts ✤ Freemium

✤ How to handle Customer Support

Typical CPA: 1.2 - 1.5 $

Yearly vs. Monthly plans: 30% vs. 70%

Extra ResourcesUnlimited out there…

Sitography, Bibliography

✤ http://www.slideshare.net/search/slideshow?searchfrom=header&q=500Distro

✤ http://mobiledevmemo.com/two-misconceptions-about-paid-user-acquisition/

✤ http://www.applift.com/wp-content/downloads/casestudies/Immortalis-case-study-A4-web.pdf

✤ http://www.applift.com/blog/user-retention.html ✤ http://www.swrve.com/resources ✤ http://www.shift8creative.com/posts/view/k-factor-is-not-

an-accurate-viral-measure

“Do you deserve more users?” –Theodore Moulos

COOwww.pinnatta.com

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GrowthRocks

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