Nowadays, no one asks why a business needs its website or an official page on social networks. Against the background of the competition, are there any channels for receiving price leads? And if we talk about the service, everything becomes even more obvious: we need not only an information platform to inform the audience about new arrivals of goods and the launch of promotions but also feedback, an order board, and a payment instrument.
Today, everyone is releasing their applications – restaurants, clinics, fitness clubs, and dozens of different businesses. For instance, the application for flower delivery services presents all the functions of the online store in a more user-friendly way for the smartphone user:
- picturesque photos of flower bouquets;
- detailed descriptions of bouquet baskets in the product card;
- color selection of flowers and price calculation options;
- the ability to add lots to the cart and pay using a single-user interface.
Yes, it’s nice to have modern software and realize that you are keeping up with the times. But beyond that, any entrepreneur needs to see the benefits of the application in numbers.
Number of downloads
The first and most obvious metric is that it is usually tracked by companies. But, alas, this metric itself says almost nothing about the effectiveness of a mobile application. These figures are more about how your marketing department has worked on promoting the service that has appeared.
However, it is worthwhile to assess the situation realistically and set the “ideal number of downloads” in advance. The best option is to determine the percentage of the total number of customers who potentially need to download software and focus on it. In addition, it would be useful to consider the cost of an average download – we divide the cost of promotion by the number of people who installed the application.
This indicator will tell you more about the benefits of the application. Retention rate is a metric that speaks about the quality of traffic: it shows the percentage of users who returned to you after downloading. The Retention rate indicator drops over time because some people leave you, and your task is to make this drop slower.
How is RR calculated? The number of users who launched the application on the first (second, third, fourth, and so on) day after downloading should be divided by the total number of those who installed the application.
Number and share of transactions in the application
Finally, we got close to the main business metric – it directly assesses the impact of the application on the company’s revenue. However, everything is not so clear here.
When the growth of transactions in the application is good
The very appearance of the application gives an increase in purchases and customers.
This is often found in the e-commerce and food delivery markets. They were among the first to bet on the mobile service, and a very large part of the customers (from the delivery segment as a whole) switched there, simply because it is convenient to pay for the order there. As a result, the total number of orders increased.
When transaction growth is not an indicator of application success
- The new service simply “eats away” users from other channels
You have launched the application, and everything is fine – in the first month, the share of transactions through this channel has grown to 30%! But where did they come from?
And then you see that purchases through the site or Instagram for the same period fell by exactly the figure by which the number of transactions in the application increased. This means that absolutely nothing has changed for business.
- When the application is launched simultaneously with the start of the business
In this case, the growth of transactions may not indicate success in promoting the application, but, for example, a successful marketing campaign or an organic increase in new users.
The concept is quite abstract. Frederick Reicheld figured out how to display it in numbers, and introduced such a metric as NPS (Net Promoter Score). Customers are asked a simple question – are you ready to recommend the company to others? The answer is given on a scale from 0 to 10 points. According to the results of the survey, the number of supporters who are neutral about the company and negatively disposed of is determined.
Which criteria for evaluating the effectiveness of the application will suit you, and which ones will not, strongly depends on the specifics of your business. Alas, there is no universal measure of success.
Ideally, you should select several parameters, and then evaluate them in a complex and monitor the dynamics of each indicator.