The market for phone and tablet apps is very competitive, with about 400,000 iPhone/iPad apps and 200,000 Android apps. The good news is that customers seem very willing to give new apps a try—it took only two weeks for 8th grader Robert Nay’s Bubble Ball to unseat Angry Birds. The bad news is that 26% of the time customers never give the app a second try. So make that first impression count and look beyond download statistics to understand real customer engagement.
Localytics studied the thousands of Android, iPhone, iPad, BlackBerry and Windows Phone 7 apps using its real-time app analytics service. For all new customers of an app in 2010, Localytics looked for the first time each customer used the app and whether or not there was any follow-on usage through January 26, 2011. All one-time uses of apps were grouped into the quarter they occurred and calculated as a percentage of all new customers in the same quarter.
The resulting analysis shows that for customers using an app for the first time between January and March, about 22% of them never open the app again. In the second and third quarters, the rate of one-time usage is flat at 26%. One-time usage grows to over 28% in the fourth quarter, but some of those customers may still use the app again in early 2011.
Not Necessarily Bad News
On the other hand, having 74% of new customers go on to use your app at least once more is pretty encouraging. More good news is that the number of US smartphone users grew from 42.7 million in November 2009 to 61.5 million in November 2010. But at the same time, the number of apps also increased dramatically.
Therefore, in order to build a profitable business in this hyper-competitive market, publishers need to understand who their loyal users are and how to continue growing a loyal user base.
Measure Engagement Not Just Downloads
Tracking downloads is often a first step to gauging an app’s success, but download stats often provide an incomplete and inflated view. High download numbers always feel great, but if those customers never open the app or abandon it after just a few uses, those high download numbers are really part of a high churn rate.
Localytics provides engagement reports to help publishers identify their returning users and understand the frequency and length of their usage. As an example, the following Loyalty report shows the number of first-time app uses and all repeat usage. Those users representing columns toward the right of the table are the most loyal users.
Combined with usage reports and custom event tracking, app publishers learn to optimize their app to improve user retention. Knowing what dedicated customers look like also helps app publishers better target advertising and marketing campaigns—and measure their success.