Are mobile businesses finally waking up to lifetime value (LTV)? And are mobile marketers in particular beginning to prioritize existing users over acquisition?
Well, to cut a long story short, probably not. I’ve been in B2C marketing long enough to know that the ‘urge to acquisition’ will never truly go away. I’m beginning to suspect we’re just built that way. But nevertheless, there are certainly signs that organizations are taking more notice of lifetime value than ever before. We see it every day when talking to prospects and customers.
One reason for that is surely the ongoing rise of the mobile app. The app offers real retention, engagement and loyalty rewards, but it demands an ever-increasing focus on getting users onto the app and keeping them there. That brings the management of the mobile lifecycle to the fore. But this is a still evolving space. The book has, literally, yet to be written. To help get you started, here’s a few tips we’ve learned about maximizing LTV on mobile during our work with some of mobile’s most successful businesses.
1 Acquire The Right Users In The First Place
It sounds obvious, but it bears repeating: make every effort you possibly can to bring the right users into your mobile app. This is as true in mobile as it was and still is online – which is why most B2C organizations usually spend a lot of time and effort seeking to tie acquisition channels to real revenue and establish ROI on spend.
Make sure you have that data on mobile, and can tie revenues to specific acquisition channels. But also use common sense. Incentivized acquisition is usually less profitable than ‘organic’, even if it is a fact of life – so use it wisely and with caution. Think about each channel and consider how the audience matches your goals. If you’re in mobile games, for example, users from a hardcore games magazine are likely to be more profitable than those delivered from generic broadcast ads.
2 Don’t Look At Numbers, Change Them
Most mobile businesses will be aware of some of the pretty poor metrics associated with user retention. Somewhere in the region of 25% of users will leave and never return after a single session. Day 7 retention rates (measured as the number of new users active on the 7th day after install) vary across verticals but can drop as low as 10%.
If you are all about maximizing lifetime value, that’s not great, but what is far worse is treating these numbers as God-given: a ‘fact of life’. It’s time to change that attitude and understand that acquisition is not the only tool in the armory. Make sure you have the right mentality, start targeting key retention and engagement metrics and putting together a plan to move them in the right direction. Then you’re ready to really make a difference.
3 Obsess Over Onboarding
The first five minutes on mobile are everything. If those 25% of ‘one time only’ users can become 20%, you’ve made a material difference to your business. So work hard to deliver optimized, personalized onboarding experiences that answer the ‘big questions’ of the typical new user: What am I doing here? How do I use this app? And what is the full scope of the product?
Treat onboarding as a separate ‘special project’ within the app. Model the onboarding funnel, and measure how effectively each stage of the onboarding process is getting users to the next. Only then can you tackle the challenge with your eyes open. Once you’re ready, start testing alternative onboarding approaches and establishing – with real user data rather than ‘expert opinion’ – what is actually working for you.
4 Build An “Interaction Layer”
Consumers love mobile apps. That’s a shame, because mobile apps remain somewhat complex and slow to update. They require development and launch cycles, and there remains the issue of getting past a third-party ‘gate’ controlled by a third party. That’s not the end of the world when it comes to the core app experience (large websites require development cycles as well after all), but it’s something of a show-stopper when it comes to optimizing user experience on the fly. And optimizing experience is vital to keeping people in the app and ultimately driving your revenues.
Help is at hand. An ‘interaction layer’ enables the delivery of in-app content via interstitials, served dynamically rather than embedded within the app code. And we’re not simply talking about offers and ads – interstitials can feel like a seamless part of the app experience and thus be used to support onboarding, opt-ins, social sharing, feature discovery and yes – revenue.
Even better, it is possible to edit and test what could be considered ‘native’ app experiences, such as menu and screen layouts, and whether particular aspects of the app are shown at all. An interaction layer enables you to make this happen in the moment, test multiple options, and continue to optimize on the fly.
5 Don’t Forget Push – But Use It Wisely
Push notifications can be exceptionally powerful: in the right hands. In the wrong hands (and let’s be honest, the world of marketing doesn’t have a fantastic record in this area) they can be a weapon of mass irritation. So use push by all means, but use it wisely and well.
Start by optimizing opt-in. Users are less likely to opt-in ‘blind’ to push, so explain exactly why notifications can improve their experience, and try testing alternative timings around when to pop the question.
Once you have permission, send push that improves user experience. Send messages relevant to the segment of users you are targeting, at the optimal time for each individual, and personalized to make them super effective. And test both creative and timing. It’s easy to do, and it can have a significant effect on response rates, which in turn means more engagement, more revenue, and more customer LTV!
Lastly – make sure you don’t make the common mistake of seeing push as a way to ‘bring back’ lost users. It doesn’t usually work. Push should be an active engagement channel that keeps your service top of mind (without being intrusive) and keeps the user engaged with your product even when not in the app.
Bringing It All Together
Of course, these five tips are just the beginning. Working on mobile LTV is (unfortunately!) something of a never-ending undertaking. But that’s to be expected. Ultimately, what we’re talking about is delivering the best possible experiences to your users. Experiences that in turn drive engagement, retention and revenue.
Doing that requires an ongoing focus on understanding the user, listening to what we might call their ‘digital body language’, and acting on that information to deliver relevant, personal content and campaigns. It’s just good business – and always has been!