Last Updated on 2024-10-11
Mobile users expect what a mobile app should have: accessibility and performance. Let’s round down the top mobile app KPIs that software companies should track.
In mobile application development, understanding user behavior, measuring app performance, and aligning strategies with market demands is fundamental for business success.
It is a good thing for tech companies that there are quantifiable metrics that they can leverage to ensure that their software products maintain optimum quality. Enter Mobile App Key Performance Indicators.
Mobile app KPIs serve as a compass that guides developers, marketers, and entrepreneurs through the complex mobile development landscape. These metrics offer insight into the success and shortcomings of a mobile app. These numbers would also be fundamental in tracking engagement, revenue generation, and overall app effectiveness. As a business, make sure you track the essential mobile app KPIs. Let’s go!
Top 9 Essential Mobile App KPIs to Ensure Success
Today, mobile apps shape our daily experiences, from simple chores to social media and work. This is why, mobile app companies need to know which aspects of app usage to measure and analyze. This makes it easy to separate the difference between obscurity and prominence.
Let’s explore the pivotal mobile app KPIs to decipher the patterns that define user interaction and app success. Here are the top 9 metrics to keep your eyes on.
1. User Acquisition Cost (UAC)
Also known as Cost Per Acquisition (CPA), UAC measures the cost incurred in acquiring each new user. This metric results from calculating the number of new users against the various acquisition efforts, such as advertising campaigns, social media promotions, or referral programs. For instance, you can compute the total amount spent on marketing campaigns and divide it by the number of new users acquired during a specific period. The User Acquisition Cost would help businesses assess the effectiveness of their marketing strategies.
2. Retention Rate
Similar to other contexts, the Retention Rate indicates the percentage of users who continue to use the app over a specific time frame, usually per month. If your mobile app has 10,000 users at the beginning of the defined timeframe and 7,500 of them are still active by the end of that duration, the retention rate is 75%. From this computation, you could conclude that a high retention rate suggests that users find value in the app. In that case, they are likely to remain engaged.
3. Active Users (Daily Active Users and Monthly Active Users)
As a mobile app KPI metric, Active Users represent the number of users who engage with the app consistently. This would depend on the frequency of when you measure the number of active users. DAU represents the users of your app on a daily. Meanwhile, MAU represents the number of users who engage within a month.
Tracking these metrics of different frequencies helps understand user engagement patterns over different time scales. For example, you could see if your mobile app has more active users during the weekend vs. on weekdays. Similarly, if your app has 500 DAU and 1,200 MAU, it indicates that users are active on different days. This means that your mobile app leads to a diverse user engagement pattern.
4. Churn Rate
The Churn Rate is the percentage of users who stop using the app within a specified time period. In simple terms, this is the exact opposite of the Retention Rate.
To compute, you divide the number of users who stopped using the app by the total number of users within a specific duration. For example, if 50 users out of 1,000 stop using the app in a month, the churn rate is 5%. A high churn rate indicates dissatisfaction or lack of interest among users. You should find ways to improve your product and ensure that it provides value to keep this metric low.
5. Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU), by its name, calculates the average revenue generated by each user. If your app generates $5,000 in revenue with 1,000 users, the ARPU is $5. This KPI would help businesses understand the app’s revenue potential on a per-user basis.
6. Conversion Rate
The Conversion Rate quantifies the percentage of users who complete a specific action, such as signing up or making a purchase. For example, if your mobile app has a paid feature and a user completes a purchase, that’s a conversion. If you compute each conversion against the total number of users, that’s how you narrow down the conversion rate. So for every 100 out of 1,000 users who make a purchase, the conversion rate is 10%. Aside from measuring revenue, this metric would also indicate the effectiveness of the app’s design and user experience.
7. App Load Time
App load time refers to the time it takes for the app to load and become operable after a user clicks or opens it. Faster load times contribute to a positive user experience and indicate a high-performance application. So if your app takes only a few seconds to load, it is considered fast and user-friendly.
8. Customer Lifetime Value (CLV)
The Customer Lifetime Value (CLV) estimates the total revenue a business expects to earn from a user throughout their entire engagement with the app. This metric would be especially important for monitoring apps with in-app purchases or conversions.
To measure this mobile app KPI, simply multiply the average amount a user spends in-app by the time period (usually in months) they’re using the app. For example, if a customer makes an average purchase of $50 monthly and continues to do so for 2 years, the CLV is $1,200. This metric would help the business understand the long-term value of customers.
9. App Crashes and Errors
The App Crashes and Errors can be captured on the developer’s side. This metric tracks the frequency and types of app crashes and errors experienced by users. Monitoring this metric is crucial to ensuring a stable and reliable user experience. The more times in a day that the app crashes, the more that it indicates potential issues that need immediate attention from the mobile developers.
Evaluating the insights on app crashes and errors makes it easy to track where the crash happened and the use case that produced the crash.
Track the Essential Mobile App KPIs
Businesses can make data-driven decisions by continuously tracking these mobile app KPIs, creating a seamless user experience, and reducing bounce rates. Through these efforts, businesses can optimize marketing strategies, improve monetization strategies, and retain user engagement.
Businesses tracking KPIs continuously can respond promptly to market trends and user preferences. With these insights, you gain a competitive edge and an increased market share.
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Matt Watson is a serial tech entrepreneur who has started four companies and had a nine-figure exit. He was the founder and CTO of VinSolutions, the #1 CRM software used in today’s automotive industry. He has over twenty years of experience working as a tech CTO and building cutting-edge SaaS solutions.
As the CEO of Full Scale, he has helped over 100 tech companies build their software services and development teams. Full Scale specializes in helping tech companies grow by augmenting their in-house teams with software development talent from the Philippines.
Matt hosts Startup Hustle, a top podcast about entrepreneurship with over 6 million downloads. He has a wealth of knowledge about startups and business from his personal experience and from interviewing hundreds of other entrepreneurs.
