Based on the app marketing and business advice on http://bit.ly/13euwvE - Go to the website for more strategies and tactics to grow your app business.
Sensational title aside, this post is inspired by how a game studio in silicon valley learned to measure all their marketing activities and increase their revenues just by focusing on one little thing at a time.
Last week I did some consulting for a game app development studio based here in Silicon Valley. This studio was creating some really kickass apps in the games category. The quality of their apps was really good, their team was excellent, and they were really passionate about what they were doing.
BUT this game studio was just not making enough money.
The reason was that they were not ready to start marketing their app or trying to increase downloads. All this while they had been focusing on Vanity Metrics and had burnt through a huge amount of their cash reserves while marketing their app.
Vanity Metrics and How They Waste Your Marketing Dollars
One of my biggest learnings very early on in my app business was the importance on focusing on the metrics which matter. Just like the 95% of the app developers out there, I started off focusing on the biggest vanity metric out there – DOWNLOADS.
I just wanted to get as many downloads as possible for our app. I wanted to come up with cool new marketing strategies and ideas to get more and more users to download the app. I liked to brag about the couple of thousands of downloads I was able to get with this cool new campaign I had just launched.
This went on for about 6 months before we realized what was wrong.
We had spent a huge portion of our marketing budget, and we did get a LOOOT of downloads, but we were failing in our app business.
Downloads are Easy, App Business is Hard
We realized that although we had a huge number of downloads, we didn’t really understand what was going on with our users, once they downloaded our apps. We saw that some of our campaigns brought in users who bought quite a few of our IAPs but another campaign brought in users who didn’t seem to use the app at all.
We were basically clueless as to what was going on inside the app. We had figured out how to get large amounts of downloads for our target audience.
We learned that Downloads are easy (if you don’t believe me, just download this free guide to learn about a strategy to get a couple of thousand downloads a day – http://eepurl.com/1xx-r)
We reached out to one of our mentors and that’s when we realized what we were doing wrong. We basically did not know about the whole concept of Average Revenue Per User, nor did we really think about retention, engagement or Lifetime Value.
All we had been thinking about was DOWNLOADS.
Pirate Metrics in General
We learned that the new approach which was being suggested to us was known as Pirate Metrics. This had been popularized by Dave McClure, the founder of 500 Startups.
Don’t Market Your App If You Don’t Know This – Pirate Metrics for Mobile Apps
1. Don’t Market Your
App If You Don’t
Know This – Pirate
Metrics for Mobile
Apps
Puneet Yamparala, App Entrepreneurs Association
2. Before you start,
Get the FREE GUIDE
To
Getting 5,000+ Downloads
in 2 Days
Using Ninja Tactics
http://eepurl.com/1xx-r
Puneet Yamparala, App Entrepreneurs Association
3. Puneet Yamparala, App Entrepreneurs Association
Sensational title aside, this post is inspired by how a game
studio in silicon valley learned to measure all their
marketing activities and increase their revenues just by…
4. Puneet Yamparala, App Entrepreneurs Association
… focusing on one little thing at a time.
Last week I did some consulting for a game app
development studio based here in Silicon Valley.
5. Puneet Yamparala, App Entrepreneurs Association
The quality of their apps was really good, their team was
excellent, and they were really passionate about what
they were doing.
6. Puneet Yamparala, App Entrepreneurs Association
BUT this game studio was just not making enough money.
The reason was that they were not ready to start
marketing their app or trying to increase downloads.
7. Puneet Yamparala, App Entrepreneurs Association
All this while they had been focusing on Vanity
Metrics and had burnt through a huge amount of their
cash reserves while marketing their app.
8. Puneet Yamparala, App Entrepreneurs Association
Vanity Metrics and How They Waste Your
Marketing Dollars
9. Puneet Yamparala, App Entrepreneurs Association
One of my biggest learnings very early on in my app
business was the importance on focusing on the metrics
which matter. I started off focusing on …
10. Puneet Yamparala, App Entrepreneurs Association
the biggest vanity metric out there - DOWNLOADS.
I just wanted to get as many downloads as possible
for our app.
11. Puneet Yamparala, App Entrepreneurs Association
I wanted to come up with cool new marketing strategies
and ideas to get more and more users to download the
app.
12. Puneet Yamparala, App Entrepreneurs Association
I liked to brag about the couple of thousands of
downloads I was able to get with this cool new
campaign I had just launched.
13. Puneet Yamparala, App Entrepreneurs Association
This went on for about 6 months before we realized what
was wrong.
14. Puneet Yamparala, App Entrepreneurs Association
We had spent a huge portion of our marketing budget,
and we did get a LOOOT of downloads, but we were
failing in our app business.
15. Puneet Yamparala, App Entrepreneurs Association
Downloads are Easy, App Business is Hard
16. Puneet Yamparala, App Entrepreneurs Association
We realized that although we had a huge number of
downloads, we didn't really understand what was going
on with our users, once they downloaded our apps.
17. Puneet Yamparala, App Entrepreneurs Association
We were basically clueless as to what was going on inside
the app. We had figured out how to get large amounts of
downloads for our target audience.
18. Puneet Yamparala, App Entrepreneurs Association
We learned that Downloads are easy (if you don't believe
me, just download this free guide to learn about a
strategy to get a couple of thousand downloads a day -
http://eepurl.com/1xx-r)
19. Puneet Yamparala, App Entrepreneurs Association
We reached out to one of our mentors and that's when
we realized what we were doing wrong. We basically did
not know about the whole concept of …
20. Puneet Yamparala, App Entrepreneurs Association
… Average Revenue Per User, nor did we really think
about retention, engagement or Lifetime Value.
All we had been thinking about was DOWNLOADS.
22. Puneet Yamparala, App Entrepreneurs Association
We learned that the new approach which was being
suggested to us was known as Pirate Metrics. This had
been popularized by Dave McClure, the founder of 500
Startups.
23. Puneet Yamparala, App Entrepreneurs Association
Basically the summary of Pirate Metrics is that as a
business you need to focus on 5 Key Metrics:
1. Acquisition - how well do you acquire customers/users
2. Activation - how well do you get the new users to start
using your product
24. Puneet Yamparala, App Entrepreneurs Association
3. Retention - how well do you make the users come
back to your product
4. Referral - how well do users refer your product to
others
5. Revenue - how well do you monetize your users
25. Puneet Yamparala, App Entrepreneurs Association
In case you are wondering why these are called pirate
metrics, then just look at the first letter of each metric. If
you put them together, they form AARRR - which is …
26. Puneet Yamparala, App Entrepreneurs Association
… kind of like the cry of a pirate :)
Now let us try to modify these a bit so that these are
more relevant to mobile apps.
29. Puneet Yamparala, App Entrepreneurs Association
For mobile apps, this is what the Pirate metrics look like
and:
1. Acquisition - how well does your app's key idea
convert potential users, into users who download your
app
30. Puneet Yamparala, App Entrepreneurs Association
2. Activation + Engagement - how many of the people
who have downloaded the app, actually open the app
and how long do they use it
31. Puneet Yamparala, App Entrepreneurs Association
3. Retention - how long do they actively use your app,
after home many days do they stop using your app or
delete it
32. Puneet Yamparala, App Entrepreneurs Association
4. Referral - how many users recommend the app to
others or use in app invite functionality to invite their
friends
5. Revenue - how well does your app monetize
33. Puneet Yamparala, App Entrepreneurs Association
Also another important point to note is that, there is a
reason these metrics are arranged in this order.
You should work on fixing each metric in the order they
are arranged.
34. Puneet Yamparala, App Entrepreneurs Association
IMPORTANT - I am asking you to fix each metric, not scale
it. For example, you just need some minimum traffic to
figure out how well your app idea is going to do with …
35. Puneet Yamparala, App Entrepreneurs Association
… people in your target audience. DO NOT spend all your
money at this stage trying to acquire a hundred thousand
downloads. If the rest of your funnel is not optimized, …
36. Puneet Yamparala, App Entrepreneurs Association
… your users will just leak through your funnel and you
will be left with an app which has no active users.
37. Puneet Yamparala, App Entrepreneurs Association
So When Should You Start Marketing Your App
38. Puneet Yamparala, App Entrepreneurs Association
Coming back to original story, the advice which I gave to
the game studio was pretty simple. We looked at how
their apps were doing at each of these metrics and
39. Puneet Yamparala, App Entrepreneurs Association
identified some strategies to improve each metric.
Once each one of these metrics has been optimized you
are all set to scale your marketing.
40. Puneet Yamparala, App Entrepreneurs Association
If you would like to see some strategies for improving
each of these stages, download the free slide deck below:
41. Puneet Yamparala, App Entrepreneurs Association
Strategies for Improving Your Pirate Metrics
http://appentrepreneursassociation.com/wp-
content/uploads/2014/09/Pirate-Metrics-
Strategies.pptx
42. Puneet Yamparala, App Entrepreneurs Association
if you are reading this on some place other than
AppEntrepreneursAssociation.com, then just go to the
website and find this post.
43. For More App Business
Advice
App Entrepreneurs
Association
http://appentrepreneursassociation.co
m
Puneet Yamparala, App Entrepreneurs Association