7 Key Mobile App KPIs to Track for Improved ROI

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Key Mobile KPIs for Revenue

You have created an awesome app after months of development and have launched it. Now starts the work towards making sure that it brings in ROI. Knowing the best app KPIs (key performance indicators) to track will help your business to define its success and whether progress is being made toward the ultimate goals.

Here is the list of the seven most crucial mobile app KPIs that you must track, apart from any specific metrics unique to your product or service.

1.  General Mobile App KPIs 

The global percentage for uninstall rate for apps is 28%. In other words, 3 out of 10 users who have downloaded your app will delete it within 30 days. If it is higher than this, then you need to take corrective actions.

There are insights that you can get from uninstalls. For instance, if the number of uninstalls increases after an update or change in the mobile features, then you should monitor if the uninstalls happened from a previously stable mobile base. If yes, then dig into why the new features have had a negative impact.

These are the general KPI measurements to track

  • Mobile downloads
  • Mobile installs (a user might download your app but not install it)
  • Uninstalls

Engagement Metrics 

App engagement metrics tells us how users interact with your app. The better they are, the better your users like your app. Since engagement metrics have a direct connection with revenue, these KPIs are a must to track.

Also read: Top 5 Tips to Reduce the Hidden Costs of Developing an App

2. Churn Rate 

The customer churn rate KPI gives an insight into how many of your users leave your app after using it a few times. You need to keep this low. If the customer churn rate is high then look into additional metrics to rule out app issues. One important performance metric is your app crash metrics that could cause users to abandon your app. You might also need to see if enough  new information is being added to retain users, as well as the  level of personalization that will make your app “sticky”.

Use this formula to calculate your app customer churn rate

Churn rate = Lost Customers ÷ Total Customers at The start of a Specific Period x 100

To explain it further, let us say the app had 1000 customers at the start of 3 months and lost 100 customers in that period. Then the churn rate is 10%

While different industry have a different average churn rate, anything below 8% is a good average to maintain. For instance, Netflix churn rate is a very low 2.4%.

3. User Growth Rate

This is an important engagement metric to track since the purpose of an app is to grow from strength to strength. The user growth rate should have an upward curve through time. As part of engagement tracking, find if there is any correlation between surges in user growth ratewith a specific event such as offers, marketing activity etc. If growth is slow and steady then that might be also good, if that is your marketing strategy..

To calculate user growth rate, use this formula:

((Present – Past) / (Past)) X 10

4. Sessions 

The Average Session Length is a part of engagement metrics that simply defines the time invested by the user on the platform in every session. There are times when users open the app unintentionally, such an engagement is really worthless. Therefore engagement tracking should focus on average session length i.e.  the total amount of time a user is spending on the platform.

Similarly, Session Interval should also be monitored. It is the amount of time between two consecutive app visits by a user. This is another indicator of how sticky your app is. Apps that are highly engaging will have short session intervals. For instance Facebook has an average session length of 4.82 minutes and on average users visit Facebook 8 times each day.

Also Read: A Realistic Mobile App Development Timeline

Revenue Metrics

Apps need to be profitable and while it might take time to get a return on investment, there must be a clear indication that the business aspect of the app is being met. These are the important performance metrics to track for financial KPIs

5. Average Revenue Per User (ARPU)

The revenue model might differ from industry to industry, it could be in-app purchases, subscriptions, ad impressions etc.

Whatever be the revenue format, ARPU can be calculated by dividing the total revenue for a specific period (a month, quarter, year) by the total number of users for that same period.

For instance if you generated $1000 last month and have a user base of 100 then your ARPU performance metric would be $10.

6. Customer Lifetime Value (CLV) 

Customer lifetime value provides a picture of the business’s financial and long-term stability by analyzing the consumer’s loyalty to the brand. More importantly, this KPI measurement takes into account the value of their purchases on the app. This is where CLV differs from retention rate as the latter only looks at the time the customer has been with the app.

Let’s also not confuse CLV with customer churn rate as churn rate is all about how many leave your app. CLV as a KPI also reveals whether the app provides real value to the right consumers or not.

Customer Lifetime Value = (Customer Value x Average Customer Lifespan)

Customer value = Average Purchase Value x Average Number of Purchases

Average purchase value = Total Revenue ÷ Number of Orders

7. Customer Acquisition Cost (CAC) 

The plain truth is that almost all customer facing apps will need to spend on marketing to acquire new users. While calculating revenue generated by the app, it is vital to also take into account the outlay. This is why this KPI measurement  is also known as Marketing Acquisition Cost.Marketing costs cover PPC advertising, display ads, social media ads, influencer marketing and any other method where money is exchanged for conversions or brand reach.

There are 2 reasons why this metric is important. Companies need to know the MAC so that they can optimize it and increase the profit margin. Investors evaluate how much money can be made from customers and what must be spent to make it. The difference helps to assess how valuable the startup company growth will be.

CAC = Total Marketing Cost (TMC) / Total New Purchases (TNP)

Here are a few customer acquisition costs by industry: Travel $7, Retail $10, Marketing Agency $141, Financial companies $175 and Technology (Hardware) $182 (source DemandJump)

Final Thoughts 

While there are numerous other performance metrics  that can be tracked as your app matures, these 7 KPI measurements are most important to start with. To keep a track of all this data, you will also need to integrate analytics into your mobile app at the time of development.

To get started on building your app idea or updating your existing app, talk to our app specialists