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Getting mobile apps right is tougher than you think
Measuring the success of a mobile app is more complicated than it appears and demands ongoing attention, reports Andrew Hennigan
Most travel businesses today have some sort of mobile app, whether it is their core business, a source of additional revenue or simply to support their existing bricks and mortar business. Measuring the success of an app is more complicated than simply counting the number of downloads or watching the user activity on the IOS App Store and Google Play say the experts.
“Building a profitable app requires upfront investments in team, technology, product and analytics,” says Anders Lykke at Priori Data, a mobile app intelligence company.
The basic premise is that the average cost of acquiring a customer must be less than the lifetime value of a user. When a user stops returning to an app this has a big effect on the lifetime value and can also increase acquisition cost because app uninstalls affect app store search ranking, making it harder for users to find the app.
European rail operator Thalys is one of the travel businesses monitoring mobile app metrics.
“We are looking at Active Devices for iTunes apps and Active Users for Android apps, which gives us an idea of how many people are really using the app and we can relate these indicators to the downloads,” says Digital Performance Manager Elisabetta Gera. “
She makes two important points:
You only get active device data for users who opt in – people willing to share data with developers – so it is better to look at percentages rather than the actual numbers
It is also worth looking at app ratings, a subjective evaluation by users and the sales revenue generated by the app itself. These are all metrics that tell us how the users value the app and use it, says Gera.
Many travel companies are in the same position as Thalys, having multiple channels for booking so it is important to understand how different channels perform and why. This is the case for the flat rate taxi-booking platform Cabforce.
“In addition to the standard e-commerce metrics we find it useful to follow how often and how much the app is used once it has been installed,” says Tomi Kankaanpää, CTO at Cabforce. “The more frequently the user launches the app – whether it is for booking or just checking coverage or prices – the more value we see the app delivers for the user.”
Combining usage data with data from passenger profiles allows Cabforce to detect different kinds of user and service usage patterns and evaluate how our apps perform for them,” says Kankaanpää.
“Extending the scope of analytics to other booking channels allows us to detect usage patterns and how customers value the app compared to other channels. I would recommend mobile app authors to not only analyse the app itself, but in the context of the overall service and customer journey.
But exactly which metrics each company should use depends on their goals, especially for the not-for-profit support apps that don’t generate sales directly.
Converting business goals
“In cases like this I would look at overall business goals,” says Ryan Matzner, director at the app developer Fueled in New York. He cites this example: “An airline might want to decrease call centre calls, so can we build in features into the app that reduce call centre costs? Or maybe the brand just wants users to engage more so it is about measuring attention. Basically this means converting business goals from the sales and marketing team into KPIs based on how people interact with the app.”
While some companies manage their apps effectively there are still always opportunities to learn and mistakes to avoid, both during development and later.
Looking at the ratio between acquired and organic users is a helpful indicator as it helps to understand the level of user satisfactio
Anders Lykke Priori Data
The majority of companies underestimate what it takes to build a successful app. Lykke has this advice: “As a rule of thumb 70% of the budget allocation should be for what happens after the app has been developed – maintenance, distribution and so on.”
Some also underestimate the importance of the development part. Says Matzner: “The biggest mistake companies make is that they build an app without considering which metrics need to be tracked. You have to build that stuff in during the original development.”
Ultimately what counts is to convince the user to download the app and to keep using it. With more than 100,000 travel apps available for download the competition can be intense. One challenge is that user acquisition costs are on the rise, so Lykke argues that it is absolutely vital to build a product that users recommend to others. “Looking at the ratio between acquired and organic users is a helpful indicator as it helps to understand the level of user satisfaction.”