Which KPI’s Are Important For Your App Marketing Strategy?

Which KPI's Are Important For Your App Marketing Strategy?

When deciding on your app marketing KPI’s, there is no one size fits all approach. It depends on the category of your app as well as the customer journey. For instance, a gaming app will have different user behaviour than a shopping app. It’s also important to note that there is a difference between metrics and KPI’s (Key Performance Indicators) – the latter are specific goals that you want to measure and work towards, forming part of your overall marketing strategy. If you’re not sure where to start, we’ve put together a helpful overview of some general app marketing KPI’s to help you get the ball rolling.

Awareness & Acquisition KPI’s

  • Cost Per Acquisition (CPA) – this is how much you have paid for each user to install your app. This will provide a view of where you are spending your budget efficiently. This is typically worked out by dividing the amount you have spent on user acquisition activity by the number of new installs or customers.
  • Return On Investment (ROI) – this KPI is essentially measuring any gains/losses off the back of the spend you have invested. For instance, if you spend £1,000 on an Apple Search Ads campaign and this generates £3,000 in revenue from converting customers, your ROI will be 3. Therefore for every £1,000 spent you earned £3,000. It’s an important KPI for paid marketing as it ensures that you are spending money on the activity that is generating the highest value.
  • Conversion Rate (CVR) – this is a universally used metric which measures activity beyond installs. This specifically looks at when a user engages with an action within your app. For most apps, this involves a user making a purchase. You can measure this by looking at how many users visit your app and dividing this by the number of users who complete an action i.e. make a purchase. You can also look at click-to-conversion rate to establish which of your marketing campaigns or creatives are driving the most in-app conversions.

Retention Marketing KPI’s

  • Retention Rate (RR) – the measurement of RR really depends on the overall purpose of your app. This could be based on visits, subscription renewals or purchases. One best practice approach is to look at the 7 Day Retention Rate (7DRR). This measures the % of people who come back to your app on a specific day. For instance, if 100 people download your app today, and in 7 days you see 30 of those people open the app again, your 7DRR will be 30%. Therefore you retained 30% of those new installs. This KPI works best alongside other metrics, but overall it provides a view of how sticky your app is. It will help you understand if you need to implement additional strategies to increase 7DRR. This could include a push notification nursery journey or changes to your onboarding experience.
  • Lifetime Value (LTV) – this is definitely one of the most impactful app marketing strategy KPI’s for you to measure. Particularly in terms of the long-term growth of your app. This measures the value that a new user will bring to your app over the long-term, and will help you forecast how much you should be spending to bring in new users. For instance, if you are running a campaign where CPA is £20 and the LTV of a user is only £15, you will be making a loss. You would, therefore, need to adjust your marketing campaign so that your CPA is no higher than your LTV. So, how to work out LTV? The calculation behind this is a little more complicated. Tapdaq has broken this down into looking at the predicted average revenue per user against how likely they are to churn (more info here).
  • Churn Rate – this measures the percentage of people who stop using your app after a certain period of time. This is useful to measure where within the customer journey users are dropping off. You can then address these gaps via app marketing strategies or product enhancements.