Your well-executed user acquisition campaign has prompted users to download and install your app in droves. Now you need to find ways to keep those users coming back over and over again. In industry parlance, that’s called ‘user engagement.’
What does user engagement mean? On a basic level, it’s a measurement of how much people who have downloaded your app actually use it. But a real understanding of user engagement involves measuring how people use it, for how often and how long, to what depth, and when and why they use it. You only need to scratch the surface for the topic of mobile app engagement to become complex.
Moreover, app engagement means different things for different businesses. Your goal is to focus on the user engagement that supports your key business goals.
Airbnb focuses primarily on metrics like the number of accommodations booked, because that’s what brings in revenue. It’s less concerned how many times a user opens the app per day and for how long.
But for Snapchat, daily visits are important to its business model. Its goal is to capture attention and keep users coming back multiple times a day for long sessions in order to accumulate app advertising revenue.
Both Snapchat and Airbnb are highly successful companies with highly successful apps, but they focus on different metrics when it comes to engagement — and they’re just two examples. In the following lessons we’ll dig into more types of engagement and help you determine the right focus for your business.
Why App Engagement Matters
No matter what metrics and statistics matter most to you — daily visits, transactions, etc. — all of them require that a user be active after the initial app download.
In other words, without app downloads you can’t have engagement, but without engagement all of the downloads in the world won’t help you achieve your goals. That’s why, particularly in more mature mobile markets, app usage is an increasingly important measurement for determining the long-term success of an app.
Usage Is the New Currency
In 2016, the total amount of time spent in apps worldwide reached a staggering 900 billion hours (Android phone total time, excluding China).
There are regional differences in how users spend their time in apps, but in general, countries with more mature app markets are currently seeing the market expand beyond downloads and into heavy app usage and revenue growth.
Worldwide Total Time Spent in Apps
Emerging markets like India and Indonesia, on the other hand, are still seeing significant growth in app downloads. However, that will also likely shift as users begin to deepen their time in, and engagement with, their favorite apps.
All this means that apps are already a large part of daily life for millions of people. They’re not just downloading apps, they’re living inside them. As time passes, that trend will continue, and app engagement will grow, and grow, and grow.
Engagement Is Cost-Effective
Whether you’re focused on an Android app, iOS app, or both, acquiring new users is an essential part of the app lifecycle. But what happens if a ton of new users pour into your app (thanks to that aforementioned well-rounded user acquisition campaign) but barely use it? Or worse, abandon it completely?
While it’s easy to become transfixed by download numbers, you should be equally transfixed by usage metrics. Why? Because the cost of acquiring new users is significantly greater than the cost of keeping the ones you already have. Let’s do the math.
Spend Less Money, Get More Users
Recent studies and analysis from Chartboost and others show that the average cost to acquire a new iPhone app user is approximately $3, and that on average only 2% of those who download an app still use it after 90 days.
Following these numbers, a company could spend $30,000 to get 10,000 new users, but if at the end of the month it had 200 users remaining, then it spent $150 per engaged user.
Now imagine that the same company successfully focused on initiating and executing an engagement strategy. This results in 10% of their new users sticking around for a month after first downloading the app, compared to the previous 2%.
This means that at the end of the month the company would have 1,000 remaining users, resulting in a cost of $30 per loyal user, a $120 difference. More long-term users for less money and more revenue — that’s the value of engagement.
Ultimately, focusing on user acquisition and downloads without also focusing on user engagement is like pouring water into a bucket with a hole in it. So remember, it’s engagement, not just acquisition alone, that will determine the success of your app.
In the next lesson, we’ll review different types of users and engagement behaviors and help you determine the types of engagement you should focus on.